S&P 500 ~ Elliott Wave Count 30 May 2010

The bears have returned. In May the SPX lost 100 points closing at 1089.

In spite of the recent drop of almost 15 % I can't say yet that the bear market has resumed. The next days/weeks should show whether we're indeed on the way to SPX 500 and lower.

The Elliott Wave count I posted during Friday still looks good:

The question is whether wave [ii] is completed (double Zigzag) or if there is one more Zigzag to come early next week to 1110-20 (triple Zigzag). If the SPX exceeds 1100 it's most likely a triple Zigzag, while on a drop below 1085 the double Zigzag count should be the right one with confirmation below 1066. I prefer the double Zigzag because I don't think that the market should exceed the hourly MA 76 (currently at 1103).

Medium term the market will either crash or rally... great... : ))

I think that the SPX finished wave [ii] or will finish it within the next few days. Wave [iii] should take the index down to 900ish within a few weeks. Important levels are 1066 and 1040 - a drop below the latter confirms wave [iii].

There is also the possibility that we finished an ABC from 1220 at 1040:

So, the market should rally from here. First condition for this count is a rally next week to 1110-20 without declining below 1066. This rally should be followed by a correction to 1070-90 and then a rally above 1174. Confirmation for this count we don't get until 1220 is exceeded (>1174 should be almost a confirmation though).

Long term both counts, the medium term bearish and bullish, will lead to a big crash. The next days and weeks should help to determine whether a Primary [B] or [2] finished at 1220 and Primary [C] or [3] to SPX below 500 is underway OR whether Primary [C] to 1600 will complete cycle wave d of an Expanding Triangle started in 2000 (see here to get the idea). Cycle wave e should follow then with the same target of SPX 500ish and lower.

Have a very nice week ; )

Intraday Update 28 May 2010

The ES hit 1106.75 today, that's pretty close to 1108ish which I had as a first target (1108.25: (a)=(c), 1105.5: 38 % retracement of 1217 to 1037, 1105.75: 50 % retracement of 1175 to 1037, so 1106.75 is actually right in the middle). From there we dropped a few handles and are now right below 1100.

Let's see if this was wave [ii] or if we get a retest of the iH&S neckline around 1090 and then another rally towards 1140.

If I had to count a completed wave [ii] for the SPX I'd do it like that:

S&P 500 ~ Elliott Wave Count 28 May 2010

After 1095 was finally breached the market went higher and closed up more than 3 % at 1103!

The rally from 1040 unfolds as a double zigzag in the SPX, thus corrective, in the ES though one can count motive waves from the low, so I have to watch how this will unfold in the next days:

Next target for the ES is 1108 and then 1140, the inverse H&S target.

Let's see if we get another 20 handle rally/sell off overnight.. : )

Intraday Update 27 May 2010

The SPX/ES is above 1090 but we haven't seen some sort of short covering rally yet.

If the resistance at ES 1094 is breached we should rally higher to 1108 where (a) equals (c). There is also the 50 % retracement of the move from 1175 to 1037.

A decline below 1080 would be quite bearish and wave [iii] would very likely be underway if we dropped below 1055.

Overnight Update 27 May 2010

Wow!

ES down 10 handles yesterday when I went to sleep and now up 20 handles.

I relabeled yesterday's high to wave (a) of [ii] and the sell off to 1056 to (b).

Targets for this (c) wave are 1088 ((c)=0.62*(a)), we are right there now, if we break through the 1090 area we should go up to 1108 ((a)=(c)) or even to 1141 ((a)=0.62(c) and ~ inverse H&S target)

S&P 500 ~ Elliott Wave Count 26 May 2010

The second wave may have already finished today. If we decline below the wave [i] low at 1040 the third wave should be underway. A possible target is 950 but may be that's too bullish and we'll go down to sub 900.

Alternatively, today's top was only wave (w) of [ii] and the current decline wave (x). So, we could see another rally to 1120.

The ES is down almost 10 handles AH though so I think it's more likely that [ii] topped and [iii] is underway.

SPX ~ Fractal 26 May 2010

I got actually just stopped out of my longs when I suddenly realized that today could be yesterday just upside down and that we should sell off into the close.

Gonna post an EW count later.

Intraday Update 26 2 May 2010

"Edit 2.30 pm: Take yesterday's chart turn it upside down = today"

!

: )

Intraday Update 26 May 2010

Just a short update so that you don't fall asleep since nothing is happening at the moment.

So far the ES hit 1089 (instead of 1093) and 1077 (instead of 1080) and acts according to my fractal.

Will we see a rally to 1102 into the close?

I think we need to stay above today's low at 1077 to get this EOD rally.

And even if we don't rally to 1102 the fractal looks still very good, doesn't it?

Edit 2.30 pm: Take yesterday's chart turn it upside down = today

ES ~ Fractal 26 May 2010

It's about time for a new fractal. The last fractals worked pretty well so I don't know why I haven't focused more on fractal.

I actually found two different fractals which look similar to the current situation but I'll post only one of them, the one that I think is more similar to today:

We should see a rally to 1093ish a pull back to 1080ish and then a rally to 1102-03. The most important number here is 1102-03. If we rallied just through it I'd discard this fractal.

At this 1102-03 level the ratio between many "subfractals" of the parent fractal equal the ratio of the child fractal. Additionally, there is also the trendline connecting the top of f2 and f4.

A sign whether this fractal will happen or not could be the EUR/USD. In the child fractal the EUR/USD topped at f8 and made a lower high at f10.

Many IFs and SHOULDs here.... : ) Well... let's see first whether we get a rally towards 1100 at all. ; )

Elliott Wave Count 25 May 2010

Who would have thought that we'll close up when the market was down 3 %?

The ES hit 1037 in the morning where it completed wave 5 (7 handles short of my target):

Either an ABC correction finished at ES 1037 or wave [i] of 3. If it is wave [i] then we should see a retracement at least to 1090 more likely though to 1105-1120.

I think that wave (a) of [ii] will end at 1090 and (b) around 1070. If that's the case there will be setting up a nice inverse H&S. The last three iH&S all failed though and led to a big sell-off so I'll be very skeptical if something like 1090-1070-1090 is setting up and wait to enter long positions until this 1090 level is clearly breached.

Intraday Update 2 25 May 2010

Either wave 5 bottomed at 1041 or this was only a first wave down and now wave 2 underway with a target of 1065-70. If 1070ish gets breached it's likely that we get a rally to at least 1090, the previous wave 4 high, preferred target range is 1105 to 1120.

Intraday Update 25 May 2010

Wave 5 finished? Don't know... The wave structure would look nicer if we got one more push lower to 1025-1030 though.

DAX ~ Elliott Wave Count 25 May 2010

The DAX needs one more low to complete a nice impulse:

ES ~ Pre-Market Update 25 May 2010

Earlier this morning the ES was down to 1037 almost reaching my target area of 1015-30.

It depends how one counts wave 1. It either has a length of 60 (preferred) or 50 points. Wave 5 has already reached a length of 50 points so it could be finished. But the more likely target imo is 1025ish (60 handles for wave 5) and 1015 where wave (A) equals (C).

ES ~ Elliott Wave Count 24 May 2010

The stock market is definitely manipulated!!! It's Monday and we're down 1 %!!!!!! They must investigate this case!

Well..., we closed down today after the last 31 of 37 Mondays were up days:

It seems as 1089 was indeed the top of wave 4 and wave 5 began with a target of 1015-1030. Selling should accelerate on a break of 1068/70.

Intraday Update 24 May 2010

A possible short term count:

Wave 4 may have unfolded in a double three, a zigzag and a flat. Alt count is that the diagonal was (a) of [y] and (c) is still to come later today/tomorrow.

Wave 5 should be underway if the ES drops below 1068.

USD/CHF ~ Elliott Wave Count 24 May 2010

It's been a long time since I've updated my Elliott Wave count for the USD/CHF. I posted my last count shortly after the USD/CHF started a new uptrend in mid December:

Currently the USD/CHF is trading just below 1.16 a rally of 15 % in less than half a year.

This is an updated count:

Wave (iv) may have finished and wave (v) is underway now. The first target is 1.17 and if that's breached the next more likely target imo is 1.20. This should complete wave [iii].

For the whole impulse that started end of last year my target is still 1.25-1.30 if it's a [C] wave what I think it is. Should it be a third wave though the target would be higher above 1.40.

Pre-Market update: The ES is currently down about 10 handles and has lost almost all of late Friday's ramp up. If the ES declines below 1068 wave 5 should be underway with a target of 1020-30.

Dow Jones ~ Elliott Wave Count 23 May 2010

I don't see any reason to change my count. The rally right after Friday's open to 10197 was a three wave move. I first thought that this had already completed wave 4 but the market didn't sell off from those levels and resumed its rally right before the close.

Primary count is that the rally from 9919 to 1097 completed wave [w], the correction down to 10031 as wave [x] and the late day rally as a part of wave [y] which should complete a double zigzag.



While second waves usually retrace 50 to 62 % of the first wave, fourth waves only retrace between 38 and 50 % of wave 3. At the 50 % retracement level wave [w] equals wave [y] so this is my preferred target for this wave 4. The Dow shouldn't rally above 10436, the wave 1 low, because an overlap between wave 1 and 4 isn't allowed.

Since almost every Monday was an up day and an inverse H&S was formed over the last days (best visible in the SPX) a rally is very likely tomorrow.


Target for wave 5 could be 9600. At that level (A) equals (C) and 5 is 1.62 times wave 1.

Edit: If we the Dow breaches 10031 and the ES 1068 wave 5 should be underway.

Intraday Update 2 21 May 2010

Edit 13:00 PM EDT: OT: If anyone wanna play pacman... you can do that here: http://www.google.com/ : D

The ES hit the 38 % retracement level of wave 3 a few minutes ago, so wave 4 may have finished.

If we decline below ES 1066 we should get wave 5 down to 1020-30. Should we continue to rally though and even rally above ES 1113 the wave from 1175 has likely finished.

Updated count:

Intraday Update 21 May 2010

Wave 3 almost reached my target and may have bottomed, we should see Wave 4 up to 1080 now.

Alternative count is that this is another 1-2 with a crash to come later today down to SPX 1000... : D First count is more likely imo though so we should see one more new low in the ES 1020 area after a rally to ~1080

Edit: 38% retracement is at 1090, so we may go even as high as that.


Edit 10:30 AM EDT: Wow what a rally. This was likely only wave (a) of [4] (@ES 1179). ES 1066 should have completed (b) of [4] and now (c) up to 1090?

Edit 12:15 PM EDT: ES almost hit 1090, wave (c) finished?

ES ~ Pre-Market Update 21 May 2010

The ES is currently down about 10 handles, just above the crash lows.

As opposed to the SPX chart in the ES I can see a third of a third. So, we only need a few fourth and fifth waves to complete this impulse.

I calculated a low for wave 3 at ES 1045ish and for wave 5 at 1020ish using the usual fibonacci relationships between the waves. Fifth waves are often a bit tricky to trade though, they can extend or truncate, so may be we won't get as low as 1020.

Elliott Wave Count 20 May 2010

Wheeeeeeeee!

What a day! Down 4%!

There you have the possible counts. I'm not sure whether today was already the third of a third or if it is to come tomorrow. If that was the case we should sell off even more than today.

If wave [iii] finished today though then we should be "near" a bottom. 1040ish could be a possible target for this (C) or [i] wave.

The inverse H&S in the EUR/USD worked quite well. The rally from the low looks only like a correction though, so a drop below the wave b low at 1.23 and we should see new lows.

DAX ~ Elliott Wave Count 20 May 2010

I recieved some charts on the DAX from AussieKen I'd like to post here:




If the DAX declines below the potential wave a low we could also count a LD as he labeled it in this SPX chart:

A few minutes ago the SPX was down 40 handles, currently down about 30 handles. Still don't see a proper third wave down!... may be we get it tomorrow? Stop for the bearish count is 1120, a rally above this level would be quite bullish imo.

The EUR/USD just broke out of an inverse H&S with a target of about 1.275.

Edit: 2.15 PM EDT: Do you see that potential inverse H&S forming? If this worked out we could close almost green today...

ES ~ Pre-Market Update 20 May 2010

As I'm writing this the ES is down 20 handles!

It's possible that wave (ii) already ended yesterday and today will be wave (iii).

But let's see first where we'll open.

http://www.dump.com/2010/05/18/steve-jobs-vs-bill-gates-pic/ : D

Gold ~ Elliott Wave Count 20 May 2010

Gold had a massive rally in the past months making new all time highs. Most recently it corrected a bit (Cramer was recommending to buy Gold right at the top so there's the reason... : ))) but the Elliott Wave structure does not look completed yet:



We could count a completed five wave impulse from the Primary [4] low but imo it's more likely that we're only completing Intermediate wave (3). So we may touch 14-1500 before finishing Primary [5] and a bigger correction unfolds.

If Gold falls below the Intermediate (1) high at 1016 the impulse that started ten years ago will have finished. A short and sharp correction down to 700-1000 should occur followed by a huuuge rally exceeding today's price many times over.

As opposed to my Elliott Wave count for Silver, Gold is already at the end of Primary [5]. Intermediate (5)'s and Minor 5's were almost always extended as well though so may be this won't conflict.

Dow Jones ~ Elliott Wave Count 20 May 2010

Today, we completed an impulse that started yesterday and then began to rally.

Both counts are still valid. If today's low completed wave (i), wave (ii) should retrace about 50-62 %. In that area c of (ii) equals a of (ii), so that's the likely target for a second wave.

If it rallies more this may be the start of wave [iii] up. The bulls have to clear some strong resistances first though.

As I said yesterday the next days will be very interesting ; )

Dow Jones ~ Elliott Wave Count 18 May 2010

Well... we got indeed that close near the lows. If that fractal plays out we should get a biiig rally tomorrow. With the ES already down again I don't think we get one though... ; )

For the second time this year a third of a third of a third may be just around the corner i. e. a big crash.

Below the EW count for this scenario:

The levels the bears need to watch to the upside are the wave [ii] and the wave 2 high. If these levels are breached we'll likely rally to new highs.

Not posting the bullish count today but it's still very possible. I think both counts are equally probable at the moment. Levels to the upside are 10720ish and 10920ish. To the downside there is this gap just below 10400 and another support at 10250.

The next days will definitely be very interesting.

Intraday Update 18 May 2010

The ES broke out of a rising wedge earlier and has been selling off since then.

Also the EUR/USD started to sell off again after it'd broken support.


No EW count at the moment. We're either in ii down of [iii] up or in one of the bearish possibilities.

As this doesn't help at all daytrading remains first choice...


Edit:

I compared the current move with the one from Jan 2010 yesterday. The candles at the bottom will look very similar if we close near the low of the day. But we shouldn't drop below yesterday's low:




Edit 2: Germany announced to ban naked short selling: http://www.zerohedge.com/article/germany-ban-short-selling-midnight

EUR/USD keeps selling off and is already back near yesterday's lows.

ES ~ Overnight Update 18 May 2010

A possible inverse H&S forming:

Dow Jones ~ Elliott Wave Count 17 May 2010

As I said all Mondays are up days : )))

Most people are counting the decline from 10920 to 10436 as a motive wave down. A valid count and very likely if we drop below 10436 again but what if a correction ended at 10436 today?

A rally above 10920 would almost certainly confirm this scenario that wave [iii] started today with a target of 12000!

A comparison with Jan 2010. We got about the same pattern five months ago. First, many (including me) were counting it as a 1-2-[i]-[ii] down and later when the Dow rallied above 10314 we changed the count and thought that wave 1 ended on Feb 5th. But the rally did not stop until 1000 points higher:

May be the same will happen again?

S&P 500 ~ Pre-Market Update 17 May 2010

Overnight the ES hit a new low completing five waves down from 1175. From that low it recovered and is now right below the 1140 resistance area.

Below a detailed count of the wave from SPX 1174:

It's possible that on Friday only wave (iii) completed and we are in a fourth wave.

But since second and fourth waves should alternate I prefer this count, wave (ii) was a flat and wave (iv) a triangle. Moreover, wave (i) equals about wave (v) and wave (iii) was extended.

ASX ~ Elliott Wave Count 16 May 2010

An update for the ASX from AussieKen. Thanks for the charts mate : )

He sent me the following chart in March 2010:

Two months later it looks like this:

Pretty impressive, ain't it?

Taking a closer look at the Expanding Triangle we can see how the ASX perfectly hit the trendlines:

Dow Jones ~ Elliott Wave Count 14 May 2010

Today's move down appears to be a motive wave, so it's either wave [a] of a correction (Minor 2) or a first wave of an impulse down.

Since all Mondays are up days... : ) we'll likely get some sort of retracement in a second or b wave. A possible target is the 10700-50 area (SPX 1150ish).

Have a nice weekend!

Intraday Update 14 May 2010

Dow -2%, SPX -2,5% and the Nasdaq down almost 3 %.

The market finally broke out of that tight trading range of the past four days. We already opened below the first support at 1150 and have been selling off since then.

Next target should be 1110ish - close of that biiiiig gap ; )

Elliott Wave Count 13 May 2010

Yesterday's high should have completed Minor wave 1.

Possible targets for Minor 2 are around 10700 in the Dow and just below 1150 in the SPX. If we sell off further a gap close seems likely.

The bearish scenario is still possible, thus I'm still waiting for a confirmation of either of these secnarios to enter long/short positions.

At the moment the EUR/USD is desperately trying to hold that 1.25 support level. A break of this level and the ES may decline down to the 1140 support level:

Elliott Wave Count 12 May 2010

No sell-off into the close today, the trendline held all day:

From last Thursday's low I can count now five waves up nearly completed:



The bearish scenario isn't off the stove though. One can count three waves up to today's high but it's easier to count five waves imo.

Interestingly the second subwave of Minor 1 down (labeled only the bullish count in the chart (red (B))) retraced almost 80 % of the previous wave, 79 % to be exact. The Dow is approaching the 80 % retracement level around 10970 so I think it's definitely a level worth looking at.

The next downwave should show us whether the bullish or the bearish count is underway. If we get a correction down to 10600 or only to 10700 and then resume the rally and make a new high I'll turn bullish again. But should we fall below 10600 and even below the support area around 10200/300 a big crash may be just around the corner.

The next days are going to be very interesting for sure!

S&P 500 ~ Intraday Update 12 May 2010

Today feels a bit like yesterday doesn't it?

Overnight the ES sold off again down to the 1140 level just to rally again about 25 handles.

As soon as the uptrend line was broken yesterday, we sold off in the afternoon - can we get the same today?

Dow Jones ~ Elliott Wave Count 11 May 2010

Not much to add to the last update. 10875 likely marked the top of C/3 today and either 1 or 4 down is underway. Let's see how low it goes.



There are some nice relationships among the subwaves of wave C/3:

wave [i] is about 0,62*[iii] and 1,62*[v].

Silver ~ Elliott Wave Count 11 May 2010

A follower wished to see an updated count for Silver.

And there you go:

First a weekly chart:

We can see a potential inverse H&S forming with a target of around 30!

There is some heavy resistance right above today's high and the 2008 highs though which it has to break through first. Moreover, PMs are usually quite week during the next few months.

But the Elliott Wave count for Silver (click to see the last EW count for Silver (early April)) still suggest a big rally coming.

I had to adjust the count a little bit since my last update after that big sell-off last week:

From the Feb lows Silver formed a nice looking Leading Diagonal and then wave [ii] unfolded in a Zigzag.

From last week's low I can count five waves up to today's high:

A correction to the wave iv low should follow in the next few days but after that Silver should really take off.

Silver mustn't drop below last week's low (wave [ii]) just above 17. Target for this move is between 25 and 30. So, the risk/reward to try a long looks here pretty good.

Edit: The EW count for Gold is a bit different. Gold is already at the end of an impulse that started in 2008. If Silver breaks out we may see an extended fifth wave in Gold because I don't think Silver will rally if Gold sells off ; )

S&P 500 ~ Pre-Market Update 11 May 2010

Overnight the ES sold off and went as low as 1140. Currently it's about 10 handles lower recovering a bit from the lows.

Wave [v] may has ended in a truncation.

See last post for the Elliott Wave count.

Dow Jones ~ Elliott Wave Count 10 May 2010

When I posted an updated Elliott Wave count for the Dow around lunch time yesterday I thought that wave [iv] had already ended. The market drifted lower into the afternoon though and made the low for the day around 2 pm. Then, the Dow started to rally after setting up a nice inverse head and shoulders which made me to sligthly change my count as follows:

Wave [iv] unfolded in a flat and the following rally was wave [v] or a part of it. As soon as this impulse is finished it'll be interesting to see how far the markets will correct.

A drop below the wave A/1 high and the bearish scenario is to be preferred and the stock market should crash this/next week.

Only a small correction though followed by another high later this week would be bullish since we'd have completed a motive wave from the lows.

Dow Jones ~ Intrayday Update 10 May 2010

That's the Elliott Wave count I spoke of in my last post:

A/1 has about the same length as C/3. If it is a third wave we should rally a bit higher since a third wave usually is the one to extend.

S&P 500 ~ Pre-Market Update 10 May 2010

The ES is currently up more than 50!! points!

I posted this on Thursday and four days later it seems as this might happen.

The rally on Thursday can be counted as wave 1 or A and the decline on Friday as wave 2 or B. Subwaves [i] and [ii] of wave 3 or C were already finished late Friday. Today's gap up will be counted as wave [iii] of 3 or C with subwave [iv] and [v] to come later.

S&P 500 ~ Elliott Wave Count 9 May 2010

The ES is currently up more than 20 points!!

Nevertheless I'm posting the possible triangle count I mentioned on Friday:

If the SPX rallies over the possible wave [c] high this triangle becomes invalid.

A test of 1150 seems likely then.

The count above concures very well with the 1987 fractal:

There are many longer term counts possible at the moment. Some say the bear market has resumed and are expecting a big crash coming week and others believe that the rally will continue from these levels. I won't commit myself to either the bullish or bearish scenario. It's just too early to certainly know whether the bear is back again or not. When I'm looking at the charts I can see many such sell-offs in previous bull markets.

Hope the next few days will clarify the situation a bit.

Have a nice week!