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Sunday, October 30, 2016

Sunday, 10/30/16 update

Let's see - 3 way move off Wednesday's low into a high Thursday morning, followed by a three wave move down into a low early Friday morning, followed by a 5 wave impulse into a high late Friday morning, but that high is significantly lower than Thursday morning's high.  Looks like a running flat to me. Very bearish.


Saturday, October 22, 2016

Saturday, 10/22/16 update

The sideways chop in the ES/SPX that started last summer continues to manifest it's annoying self.  Hard to come up with a high confidence EW count, here's a best guess:


Saturday, October 15, 2016

Saturday, 10/15/16 update

The triangle "X" wave posited in last weekend's update played out pretty much as anticipated.  That wave terminated on Monday and a 5 wave impulse down ensued leading to a low on Thursday morning.  The bounce since that low put in three legs into a high Friday morning, adequate for a correction, so it may be that another leg down has commenced.  If all this is correct, then since the Monday triangle terminus we've seen either waves A & B of zig-zag "Y" or we've seen waves 1 & 2 of wave A of that zig-zag:

 
Backing out to a longer view the two most likely possibilities are that Primary W III of the bull market since the '09 lows topped this summer with Primary W IV in progress (1st chart below) or the ES/SPX is working out Major W5 of Primary W III (2nd chart below).  Couple of things to note: on the 1st alternate Primary W II was a simple zig-zag, so Primary W IV needs to be a flat, triangle or some type of complex corrective sequence as per the EW rule of alternation. On the 2nd alternate the count is invalidated if the market continues selling off and drops below the assumed start of Minor W1 at ES 1981.50.



Saturday, October 8, 2016

Saturday, 10/8/16 update

In early September the ES/SPX sold off hard and bottomed on Sep 12.  The ensuing rally was impulsive and strong and looked to be the start of a bullish run.   But except for another short bullish burst a week and a half later the pattern has been anything but impulsive - in either direction.  Just a slow sideways grind that is enough to make one scream.  So it's hard to see this situation resolving itself to the upside.   The problem from an EW standpoint is that the pattern is ambiguous enough to suggest a number of possible counts.  One of those is below, IMO it is the most likely solution but not by much: