S&P 500 ~ Elliott Wave Count 30 July 2010

As I was hoping in the morning we saw some real fireworks today.

After the GDP release the ES sold off to my 1084 target where the ES found support. When the market opened at 9.30 it almost immediately shot higher and closed the gap.

From there we got a clear three wave structure down correcting exactly 62 % of the previous wave. This was suggesting that another push higher was likely. And that's what we got: The SPX first rallied back to 1100 formed a right shoulder of an intraday inverse H&S and then hit 1106.5 in the last trading minutes of July.

Even though 1108 isn't breached yet I think we'll see much higher prices next week ; )

Enjoy your weekend : D

S&P 500 ~ Intraday Update 1 30 July 2010

ES 1084/SPX 1088 was perfectly hit this morning and we got a strong bounce.

There are two possibilities now, either that the correction finished at SPX 1088 and the SPX will make new rally highs or that 1088 eventually breaks and we'll be going for 1070.

Imo, above 1108 we'll see new highs and below 1088 we'll close that gap at 1070. Between those levels we can just guess which way it goes.

S&P 500 ~ Pre-GDP Warm-Up 30 July 2010

Edit 8.40 am: The ES just hit 1084. If we don't get a bounce here the ES will sell off to 1070 imo

Today is the last trading day of July and it could be a very interesting one. The GDP will be announced in about one hour which should move the market quite a bit.

The diagonal target (1084) I had for the ES was almost reached yesterday (1089) and then when GS started to rally the market recovered and the SPX closed above 1100 at 1101.53. Interestingly, the last time GS had such a big EOD rally the market collapsed the day after 3 % (July 16th).



I still like ES 1084 as a first target, if that's breached though I expect a sell off to SPX 1070 to close the gap there. In this area is also the downtrend line so I expect the bulls to show up there.

As you can see I think the market will sell off after the GDP but that's just my guess, so if the market rallies above SPX 1108 again I think the SPX is going for at least 1120 again.


I hope we'll see some fireworks today ; D

S&P 500 ~ Intraday Update 29 July 2010

So, there we are.. below 1100 again. Is this just a correction or the start of a new downtrend?

Ahead of the GDP tomorrow both is possible.

May be you remember the diagonal I posted on Tuesday that had a target of 1084 in the ES.

Also in this area there is an uptrendline in the SPX, so I think this should (at least temporarily) stop this sell off. If this support level doesn't hold though the SPX could target the open gap at 1070.

S&P 500 ~ Intraday Update 28 July 2010

The market is slowly moving down...

There's a possible H&S on the SPX with a target in the mid 1090's:

S&P 500 ~ Pre-Market Warm-Up 28 July 2010

As posted yesterday wave iii ended at 1121 and wave iv at 1110. So we should see another push higher today (1110 has to hold).

The alternate count I posted that a [i]-[ii]-(i)-(ii) is underway (wave (i) ended at 1121) matches the 07 fractal (see below).

Key level today is 1110 imo. If that breaks we should see lower prices - 1100, 1090ish and if that breaks probably a retest of the broken downtrendline in the low 1070's.

I think I posted the 07 fractal for the first time in late March. I looked at it again this weekend and it's still very similar to today:

During 02-07 the weekly MA 76 provided support. In 07 the MA was tested again and the market made a new high two months later.

In early July this MA got tested for the first time during this rally and the market has been rallying since then. So if this correlation continues we should make a new high late August/early September and then sell off again.

I added the [i]-[ii]-(i) count as an alternative because in 07 we got the exact same waves from the lows. The perfect levels would have been 1106-1065-1121-1070-and 1121+++. So far we got 1100-1057-1121, so that pretty much matches the 07 waves.

S&P 500 ~ Pre-Market Warm-Up 27 July 2010

Wave iii of (iii) is doing what it's supposed to do - rallying:

The ES hit 1117 a few minutes ago thus the SPX should gap up to about 1120.

What worries me a bit though is the diagonal in the ES. If the lower trendline breaks we could go down again to 1084. If that happens I'd change my count to a [i]-[ii]-(i)-(ii) instead of a [i]-[ii]-[iii]. I'll watch this trendline closely today.

Edit 12:45 pm: The ES broke below the wedge and retested it from below. So if there are any bears left we should decline to ES 1084 from here. There are two count now:
- we're still in wave (iii) and wave iii topped at 1121. Wave iv retraced 38 % to 1110 earlier today and wave v is now underway with a target of 1130-40. 1110 needs to hold.
- wave (i) topped at 1121 and a bigger correction started today with a likely target in the high 1080's.

S&P 500 ~ Intraday Update 26 July 2010

I've just noticed that I haven't posted yet the following chart:

The start of the June rally looks very similar to the rally from 1057. In June the rally was 90 points, so this rally may hit 1150 (1060 + 90). That target also matches my EW count.

Edit 2:20pm: If the market doesn't move for another ~30 minutes it'll the rising trendline. Let's see what happens there.

Edit 2:30pm: We're at the trendline now...

S&P 500 ~ Pre-Market Warm-Up 26 July 2010

As I said on Friday wave iii should be underway with a target of 1140.

It looks a little bit wedgy though. So, the lower trendline better holds.

If the lower trendline breaks, the whole thing from 1057 could be a diagonal, leading probably since the upwaves look motive. 1057 has to hold by all means.

S&P 500 ~ Intraday Update 2 ~ 23 July 2010

So, there we are.. above 1100 ; )

Wave iii already started? Wave ii is pretty short but if the SPX can break the 1100 level now we should be in wave iii with a target of 1140.

Edit 8.07 pm: and now we have also a new high on the ES.

Edit: 8.40 pm: bears and bulls still fighting at that 1100 level. Bears want a double top and bulls a break out, let's see who's right.

S&P 500 ~ Intraday Update 23 July 2010

As I posted yesterday there should be some sort of correction today - either to form wave ii or to start wave (iii) down.

The stress test results will be announced in about 90 minutes so we may have to wait until then for some real action ; )

S&P 500 ~ Intraday Update 2 ~ 22 July 2010

In the past weeks we had many gap-up-huge-after-late-day-sell-off-and-then-rally-like-there-is-no-tomorrow days. Interesting is that all those days had a gap up, a midday consolidation and a late day rally.

Afternoon sell off yesterday? check

Gap up today? check

Midday consolidation? check

So there is the set-up for a late day rally today. I'd wait for a break of today's high though.

The two waves from 1057 have both the same length. So it's possible that this was just an ABC. But as I posted earlier it is also very possible that this is a (i)-(ii)-i. We'll probably know already in two hours which count is correct.

Edit 3.45 pm: Well... no late day rally today, 1100ish was too strong a resistance today.

S&P 500 ~ Intraday Update 22 July 2010

If this is a third wave should break through the trendline (and then above 1100 ofc)

S&P 500 ~ Pre-Market Warm-Up 22 July 2010

Overnight the ES erased the Bernanke sell-off from yesterday and is now back just below 1080.

Ben speaks again today right when the market opens so be prepared lol

In case you missed the EWI post yesterday:

EWI is having a free week again. You can access their intraday, daily and weekly energy forecast (like crude, gas etc.) for one week for free. Usually you had to pay several 100 bucks a month so take this opportunity and click on the banner on the left and log in/register. ; )

S&P 500 ~ Elliott Wave Count 21 July 2010

4.5 hours into the day the market was still unchanged and it began to look like a "For that I've wasted 6.5 hours of my life!?" day but fortunately uncle Ben started to talk just in time to save the day.

The SPX sold off 1,5 % within 15 minutes, tried to stabilize at the 1070 level but eventually broke down. At 3 pm it hit the LOD at 1065 and then bounced a bit around in the last hour to close at 1069.59 (-1.28 %).

So, we saw indeed an "INTC déjà-vu" today.

I expected a pullback today in the bearish and the bullish count, so the bullish one is still alive.

If the bearish count is underway the market should make a new low today (gap down? = wave [1]) and then possibly close the gap (wave [2]). If the bullish one is underway though the market should rally all day long (start of wave (iii).

Wave B Triangle Count

AussieKen asked me to post his EW count, so there you go ; )

He thinks that we are in a triangle wave B of an ABC decline from the April high. This ABC should complete a b wave of an even bigger contracting triangle:

666-1220 = a

1220-? = b

I think the main reason he prefers this count is because it works with every index. If you have ever tried to count the DAX in a bearish way (1-2-1-2 like the SPX) you most certainly failed (well at least I did lol : )). You won't have any problems to count it in the same way as above though ; )

I'll post an updated EW count for the SPX tomorrow morning (i.e. in about 8 hours). We didn't quite get to 1060 but the fractal still looks good. According to the fractal we should decline below 1057 tomorrow.

EWI ~ Energy Free Week is here (July 21-28th)

EWI is giving away full access to their intraday and end-of-day Energy forecasts for free!

To read their forecasts just click on the banner "FreeWeek is here!" on the left side and log in. If you don't have an account yet, just register, it's free.

S&P 500 ~ Intraday Update 2 ~ 21 July 2010

The possible wave b high hold and the market is now selling off and just made a new LOD (SPX 1077). So forget the possible short term bull count I posted before.

May be you remember the fractal I posted yesterday:

As you can see almost the whole rally was retraced the following day in mid May. Thus we should see SPX 1060 today. More than 1,5 % down from here in about 2 hours? We'll see.

Edit 2.20 pm: OMG! A 14 point slide within just a few minutes! 1060 doesn't look that unrealistic now does it? LOL

S&P 500 ~ Intraday Update 21 July 2010

Possible bullish short term count:

This count is very likely IF the market breaches the wave b high and preferred above today's high. Target for wave (iii) is 1130.

S&P 500 ~ Elliott Wave Count 20 July 2010

Yesterday we got the exact opposite of what we saw after the Intel numbers. IBM disappointed, the ES gapped down but then recovered and rallied for the whole day.

Apple reported afterhours yesterday and beat the estimates (not surprisingly imo - everybody buys their products) and the ES spiked to 1085.

Will we see an INTC déjà-vu, i.e. futures higher but losing everything during the next day?

The SPX 1080-85 area was reached yesterday, so I'm labeling the high as wave ii. Since most second waves are zigzags (5-3-5) I expected this area to be reached without making a new low before. Wave ii unfolded as an expanded flat (3-3-5) though. Minor 2 already unfolded in a flat, so may be that will be characteristic for this downtrend?

Since we got five waves from the lows we can also count it as a first wave of [c]/[iii] up. If the downtrendline, currently around 1090, and the 1100 area is breached this will be my preferred count. Target is 1150ish.

S&P 500 ~ Intraday Update 20 July 2010

Wow!

When the ES was down at 1050 I didn't think that we would get back up to 1080ish.

Well but that's what we got. The SPX hit 1078 and has now retraced 50 % of the previous down move - very common for a second wave (if it is one! <<>

I've just found another fractal which supports the bearish count:

The rally today reminded me a bit of the mid May action, so I compared today's action with it and in my opinion it looks pretty similar.

S&P 500 ~ Elliott Wave Count 19 July 2010

Late afternoon the market seemed to break out but right in time to celebrate it BP announced that they still had some problems in the gulf and the SPX went back down again to close where it opened today.

The ES being down huge AH (1059) I'm not so sure anymore if we see 1080 before we move substantially lower. Reminds me a bit of the sell off in late June when the market sold off for like nine straight days without any decent retrace.

The bullish counts are still possible, today's low should hold though imo.

Intraday Update 19 July 2010

The SPX opened higher and rallied on until the NAHB Housing Market Index was released. After those numbers the market sold off and the ES broke down of the rising channel. The market found support just below Friday's low and has recovered since then.

I'm still expecting SPX 1080-1085/ES 1076-1080. We should get there as soon as today's high SPX 1073/ES 1069 is broken.

There is a fractal that concerns me a bit though. If we decline below today's low and didn't break today's high before we could sell off into tomorrow:

ES ~ Pre-Market Warm-Up 19 July 2010

Overnight, the ES has been trading in a rising channel and is currently a few handles higher than on Friday:

Based on this the SPX should open around 1070, so up about half a percent.

S&P 500 ~ Elliott Wave Count 16 July 2010

Despite the GS and BP news on Thursday which were coincidentally (not) released within the same minute the market was not able to defeat the trendline.

On Friday the trendline came off as winner when the SPX lost almost 3 % of its value. The SPX is now sitting at the 38 % retracement and will possibly bounce early next week.

I can count a completed first wave down or a completed corrective wave at Friday's low so I expect a bounce on Monday to 1085ish. The downtrendline will also be around that level so what happens there will be crucial.

A break above it and the SPX is likely going to 1130-50 if it fails though the SPX should decline to below 1000 very soon.

I know the 1-2-1-2 count looks very unlikely because wave [ii] retraced 74 % but in late April wave [ii] (of 1) retraced 73 % so it already happened a few weeks ago ; )

Have a nice week!

ES ~ Intraday Update 15 July 2010

The ES is sitting on its uptrendline - bounce or break?

S&P 500 ~ Update 14 July 2010

The SPX spent the whole day desperately trying to break through the downtrendline. So far the line has withstood every attack and the question is who gives up first?

Is it the trendline wearied by the countless attacks over the last two days or will the SPX back off after realizing that this is a helpless battle just to gather on a lower level to make another attempt to break the trendline?

Tomorrow the battle continues so stay tuned!

S&P 500 ~ Intraday Update 13 July 2010

The SPX has reached the downtrendline:

Break or pullback?

Some currencies already broke out. The EUR/USD after trading in the low 1.25's this morning rallied to a new rally high above 1.27. Thus, the move from 1.19 is most likely motive now. The AUD/USD also broke out of the trading range between 0.87-0.88 and it looks like an inverse H&S has formed over the last three weeks.

Many bullish signs here. Let's see if the gains can be hold until the close.

EUR/USD ~ Elliott Wave Count 12 July 2010

From the early June 1.19 low we got a pretty strong rally in the EUR/USD which most likely concluded last Friday at 1.27. The currency pair broke down of the ending diagonal that was forming over the last few days, backtested the broken trendline of the ED at 1.268 a few hours later and then sold off to below 1.26.

So far, I can count three waves from 1.19, i. e. corrective. Wave C almost equals A and B retraced 50 % of A, so pretty much a textbook zigzag. Confirmation that this is a completed zigzag we get below the wave B low at 1.215ish.

Late last year the EUR/USD was trading above 1.5. Since then it has lost up to thirty cents.

This strong down wave is coming to an end. I think there will be at least one more new low though. A possible target is the 1.15ish level where [A] equals [C]. Not sure whether the [A][B][C] labeling is correct, could also be a 1-2-3.

If the trendline (see chart) is regained and the downtrendline from the 1.51 top is broken, thus around 1.28-29, the wave from 1.51 ended at 1.19 and we should see much higher prices.

S&P 500 ~ Elliott Wave Count 9 July 2010

Until now the wave from 1010 has retraced a bit more than 50 % of the previous wave down. Second waves usually retrace between 50 and 62 % of the first wave, thus a textbook wave [ii] so far. There is also some nice relationship between the subwaves: (w) = 0.62*(y) = 1.62*(z).

The rally from 1010 looks pretty strong though and if the downtrendline is broken and the MA 200 regained a new bull wave towards 1300 or even higher could be underway. Over the weekend I've seen another bear count on different blogs (Minor 1 ended at 1010). This count is certainly possible but why trying to force a motive bear count on the SPX when a corrective count looks much better?

Gonna post a EUR/USD update later

S&P 500 ~ Elliott Wave Count and Fractal 7 July 2010

An impressive rally yesterday! Unfortunately this rally came one week too late... May be you remember that I expected a one day rally from 1030 to 1065 last Wednesday. Ironically yesterday's rally went from 1030 to 1060...

I found a nice fractal somewhere on the web (can't remember where...). The fractal basically compared the start of the bear market in 07 and today.

I slightly changed the fractal and added the "perfect" numbers to today's chart if today had the exact same proportions as in 07/08:

So far pretty impressive imo... This rally should stop around 1064 or it should measure 59 handles (1064-1005) which is the case at 1070 (1011+59). The last numbers were always about 5 handles off the real low/high so I tolerate a move to 1075- max 1080.

An updated wave count below:

I was a bit early labeling the wave [ii] high at 1042. So I changed to my alternative count: 1042 completed wave (w) and 1018 wave (x) of a double zigzag. Second waves usually retrace between 50 and 62 % so the target is between 1070 and 1085.

S&P 500 ~ Elliott Wave Count 6 July 2010

On June 21st the SPX sold off 23 points and then rallied 10 points.

Today, the market declined from 1042 to 1018, that's 24 points and the rally so far is 10 points.

So, this is pretty much the same. On June 22nd the SPX sold off further (24 handles from high to low) so let's see if we get the same tomorrow.

S&P 500 ~ Intraday Update 6 July 2010

I hope you had a great weekend!

June 21st again?

Do you remember how Minor 2 ended? It was the first trading day of the week and the market opened with a big gap up. Around 10 am the market topped and declined for the rest of the day. At 2 pm the first five waves down were completed. A short bounce (wave ii) followed and wave iii started in the last trading hour. At one point the market was down nearly 1 % (after being up 1,5 % in the morning).

Today we got another big gap up, topped around 10 am and seem to have just finished the first five waves down at 2 pm. So I won't be surprised if we test 1011 today.

A possible short term wave count:

This could be wave [ii] or alt only wave (a)/(w) of [ii]

S&P 500 ~ Elliott Wave Count 1 July 2010

I'm still following the same very bearish count as long as the 87 fractal correlates today's action. If this fractal plays out the market crashes today/next week.

Should we get a multi day rally from these level though (may be after one new low today) I'll discard the crash scenario and change to the alternative count.

The candle stick we got yesterday is a bullish one. In the past few months such a candle lead often to a big rally. There was one exception on May 19th, the day after the market dropped 45 handles.

We may know in about one hour which direction the market is going today ; )