Dollar Index

SPX

Weekend Update - ES

Weekend Update - Bonds, Crude, Dollar Index, Gold

Weekend Update - ES, DOW, RUT, Nasdaq

ES
The overall pattern for the ES, and all the equity markets for that matter, remain difficult to discern.

It's just one of those situations where we won't truly know what structure has traced until after the fact, which is not uncommon.

It makes it hard for position traders, and to some extent, swing traders. If your a scalper like me, you should be doing just fine because all we really care about is where the next 3-6 handles is headed.

The 15 minute pit session chart shows an island reversal. This is basically an exhaustion gap that is followed by a breakaway gap in the opposite direction.

I am counting the move off the 1112.25 H as a 5 wave structure. You could argue for a 3, but I think it counts best as a 5.

This implies that after a retrace process we should see an additional 5 waves down, at minimum.


It appears that we have 5 small waves up from the 1085.25 L, which I have labeled as a sub-minuette degree a or i.

Drilling down further, we can see that it appears that micro [A] is complete. We should get a small [B] retracement (levels on chart) when globex opens, followed by a [C] leg lower.

At that point, I would expect to see a 5 wave structure higher of sub-minuette degree. If your a scalper, it should make for a nice little trade, as a measures 7.5 handles.


Any trade through the 1085.25 L would invalidate this view.

The weekly view suggests that we should see additional downside pressure on price.

This past week saw price action fill the long standing gap from October 08.

More noteworthy, in my opinion, is that we had a KoolsTools cycle peak come due. This suggests that we may see lower price, though never a certainty.

This basically jives with what short-term structure is suggesting as well.

Weekend Update - Grains

CORN
The corn market was the laggard of the grains this week.

In the Tuesday update, I postulated that I thought this market had finished wave (4) and (5) was underway. I will stick with that assessment, however, my confidence is on the low side.

Although it sniffed the 10/23 H, price never made a serious challenge to overtake it. It was was weak attempt, in my opinion.

Being a 4th wave, it's possible that it needs additional work. If this is the case, it may be in the process of tracing something complex. A flat, triangle, or combination may very well be in cards.

I don't believe we had a 5th wave failure, though I guess it is possible.

Should price trade through the 365.25 L, then that will seal the deal on a wave (5) being in force.

The broken 200 sma is directly underneath for support, as well as the channel boundary.

We also have an established RSI uptrend that may very well act as support.

More than likely, I will need to up the degrees by one notch. I am going to hold off on this another week.

Bottom line - I will maintain my near-term bullish bias for the time being.

Prices basis December contract.

SOYBEANS
A breakout week for beans. Price traded through the 1029.50 H, and more importantly, the 1041.50 H.

This more than likely signals that primary [C] of a double zigzag of cycle c has commenced.

There is still an outside chance that we are still tracing primary [B], though I believe those odds are low.

Upside targets are where (3) = (1) at 1100.50, and (3) = 161.8% of (1) at 1192.75. [C] = [A] at 1174.

Drilling down intraday, you see that price is having a struggle getting past the 1050 level. This happens to be the 127.2% expansion of (2), which does get my attention, but my guess is it will be short lived as resistance.

Bottom line - It was sort of a messy start to this leg, but things appear to be progressing in impulsive fashion. I am near-term bullish this market until proven otherwise.

Price basis continuous contract.

WHEAT
Big breakout week in the wheat market.

Price confidently traded through the primary [1] high, suggesting that primary wave [3] was underway, and more specific, a "third of third."

The alternative is that [2] is still tracing and this is nothing more than a (C) leg on a coke binge.

I believe this little pullback is nothing more than a smaller degree 4 wave, possible of minor degree, though it may very well be intermediate.

Since we have decisively broken out of the down channel, we should expect it to become support if price were to trade that low.

Notice how price has supported on the 200 sma after breaking through.

Upside targets include [3] = [1] at 623.25, and [3] = 161.8% of [1] at 706.75.

Bottom line - I am near-term very bullish this market. Any trade through the intermediate (1) H of 528.25 would quickly change this view.

Prices basis December contract.

Crude

Price action played out exactly as expected today.

We finished the little [A][B][C] to the upside to complete sub-minuette b and then started tracing c down.

It appears that we have completed the first 3 legs, while currently working on wave [4]. We should finish this up in short order, as well as the remaining wave [5].

At that point, we would expect impulsive price action higher. This of course assumes we have structure pegged correctly.

Wave [4]appears that it will take on the form of either a triangle or a flat. The (A) wave clearly looks like a double zigzag to me, which is considered a 3.

There is a nice inflection point at the meeting of the mid-line and upper boundary line. The 127.2% projection rests in the same area. Would be a nice place to turn price.

Though not shown on the chart, (C) = 61.8% of (A) at 78.57, basically in the same place as the inflection point.

Notice that we have retraced to the 4th of lessor and just shy of the 50% level. I really would prefer that (C) not get much above this level.

In case you hadn't noticed, we are on the January contract now.

Crude

Crude spent the better part of the morning in some sinister chop fest of a complex corrective before breaking down. Not unexpected price action.

I have made some label changes. I'm giving structure the benefit of the doubt here and assuming that we completed an impulse up.

If we have 5 waves up, and it's by no means a certainty, then we can expect a 3 wave structure down before resuming upside price action.

Notice that we reached the top of the consolidation channel we have been in since the recovery highs (20 days to be exact). It's not surprising that price couldn't push through, though I think that's coming soon.

This is an intraday look at the back half of what I believe was an [W][X][Y] expanded flat.

It appears that we should have a little bit more upside before price turns lower.

If price takes out today's high, then this view, as I have labeled on the chart, is invalid.

I would also be concerned if we didn't get a retracement to at least the 50% level.

There are a lot of options right now of what structure may have up its sleeve. The more price action we see, the more of those options we can eliminate.

Crude, Corn, Wheat, Gold

Crude basically played out as expected today.

We finished tracing a (4)th wave and put in a somewhat sloppy (5)th, though the smaller degree 3rd was nice.

I'm still not real sure about this structure. This is looking goofy to me.

I still think there is a good shot this turns out being a corrective. I will let structure dictate that.

As it stands now, I will assume that [3] completed at the 79.85 H. This means a [4] wave tomorrow. Should price retrace down to the 78 level, I think that would signal that the 79.85 H actually finished [5].

Globex has been unusually active tonight - not sure why.

I wanted to update the price action in the grain markets.

Wheat is signaling that it's game on. I believe this market is in a "third of a third" currently - where the money is made.

It appears that there is a lot left in the tank.

I have notched up my degree's by one from the weekend update.


The corn market has had impulsive price action as well.

Although this market counts a little different than wheat, I believe it is telling us that (4) is finished.

I have not changed the degree's as of yet, but it appears that they will need to go up a notch as well.

I will give a more detailed update on both these markets this weekend.


I also wanted to bring your attention to the gold market.

This looks like a parabolic rise to me. If this is the case, It could get crazy in this market.

You can never be certain where the damn things end, as the waves just keep subdividing. It's best to wait for price to break the arc before taking a stab at a short line.

Generally speaking, price usually makes a B-line back down to the 61.8% retracement level, where a meaningful bounce takes place.

I put the fib levels on the chart, however, this assumes that price is finished on the upside. This is probably not the case.

The pattern itself calls for 100% retracement when complete. We'll see.

Crude

The 75.57 L obviously finished something.

At this point, I will assume it was a sub-minuette c wave. What it completed is likely either a minuette (c) or (y) wave, and possibly a minute [ii] with it.

The labels on the chart assume that we are impulsing off the low. This is by no means a certainty. In fact, I much prefer the abc-x-abc view so far.

Regardless, it does appear that we should see higher price once this little corrective plays out.

Notice that price ran up to the daily 20 sma, where it found resistance and closed just under it.

Also notice, we basically came down to the lower channel and supported.

I'm not sure this market is ready to go, but it's building up a lot of energy in this obvious bull flag.

ES, DOW, RUT

Another interesting Martin Armstrong read

GOLD $5000+ 11/11/09

Weekend Update - #2

30 YR BONDS
The bond complex had a nice reversal Thursday, leading to a nice upside week.

The 50% retracement level did give way as expected, however, it was short lived. Notice that the channel gave near perfect support.

There are several layers of resistance directly overhead. This includes the 50 sma, the broken base channel, and the small down channel.

One possibility is that structure may be tracing a small triangle here, with the Thursday low of 117-10 being the [b] leg.

If that's the case, this would suggest a zigzag, which means this would likely be an X wave. Any trade through the 120-15 H or 117-10 L would invalidate this view.

Of course, we have to watch for a flat as well.

Bottom line - If a little triangle scenario is play, we are likely range bound in this market for the next couple of weeks.

Price basis combined contract.

CRUDE
The crude market corrective continues. We have now registered 17 trading day's in a sideways market.

Although this chop has been difficult to discern from a pattern standpoint, it has been very tradable with plenty of range.

I show a simple (a)(b)(c) , though it's possible we are tracing a combination.

We have broken free of the 20 sma and appear headed for a meeting with the 50 sma, which is at 74.57 and rising.

This is one way of looking at the intraday structure.

If part of a combination, or (w)(x)(y), then we should be finishing up a sub-minuette c with the completion of an upcoming [5] wave.

If we are getting ready to finish a iii wave, then [5] will need to make a decent move down, as the price extreme of i is 76.71.

I suspect this is an abc that ends a (y) wave.

Bottom line - near-term it appears that we should see at least one more leg down. We can reassess at that point.

All prices basis continuous contract.

DOLLAR INDEX
New lows for the dollar this past week.

I have changed the labels to better align with the continuous contract. The continuous clearly shows a 4th wave triangle, while the combined would be considered a "cheater."

It appears that we had 5 waves down off of the spike high of 77.50. If it is a minute degree, structure would be complete. Any degree less, argues for a 1st wave.

Confirmation of a change in trend will come from:

1. a clean channel break
2. closing of price above the 50 sma
3. RSI break of the 50% level
4. a 5 wave move higher (impulse)
5. completed downside structure

Until the above 5 take place - I will assume the dollar continues lower.

Price basis combined contract.

GOLD
The gold market continues to subdivide higher, reaching new highs in the process.

It's apparent that we are getting very close to this leg finishing. I am assuming that this will complete a minute degree wave [v] coming out of the triangle. Remember that triangles precede finishing moves.

If this interpretation is correct, we will complete an intermediate degree (B) wave at this moves conclusion.

As posted in previous updates, my alternate view is that there was no triangle, but a series of 1's and 2's. This means we would be in minor 3 of intermediate (3) up.

I am anxious to see what type of price action we get when this leg finishes subdividing. Whatever it completes should be tradable.

Sentiment continues to maintain over 90% bulls according to the DSI readings.

Bottom line - We keep going up until we don't. If I were long, and I'm not, I would use Friday's low as a stop and perhaps trail it up.

Weekend Update - Grains

CORN
The corn market traded higher this past week after retesting the broken channel.

I interpret structure to still be tracing intermediate (4) of primary [A].

It's possible that wave (4) has completed and (5) has started. I don't believe this is the case though.

Being a 4 wave, there is always the chance of a triangle or some type of complex pattern.

Should (4)'s price low be in, we can start to get upside projections. (5) = 61.8% of (1) - (3) at 428.25.

RSI has done a good job of maintaining its uptrend line. We should expect to see our customary divergence when (5) completes.

A critical level remains the price extreme of (1) at 347.60. Should price trade through that level, then we would have to take another look at structure.

Bottom line - I'm expecting some more grinding away in this wave (4) this upcoming week.

Price basis December contract.

SOYBEANS
The bean market traded higher this past week after bouncing off the daily 50 sma.

Interpretation remains intermediate wave (2) of primary [C] of a double zigzag cycle b wave.

Price action off the 951.25 L does not appear impulsive. This suggests that (2) needs additional work. Should this be the case, the channel will be in jeopardy.

The 880.25 L is a critical level. Any trade through this price invalidates this leg being a (2).

A triangle may still be in play, whether an [X] or [B].

The retracement levels of (1) are on the chart.

Bottom line - It appears that wave (3) will need to wait a little longer. I'm expecting downside pressure for the upcoming week.

Price basis continuous contract.

WHEAT
The wheat market enjoyed nice upside price action this past week.

I interpret structure to be in intermediate (2) of primary [A].

It is unclear if we are still tracing minor B of (2), or if wave (2) has actually completed. My guess is that we are in the finishing stages of minor B , with C down to follow.

The alternative is that (2) completed at the 487.75 L and we have put in some smaller degree 1's and 2's.

Notice that we are back at the channel. This would be a good spot to complete B.

Any trade through the 574.75 H would signal that (3) has commenced.

The dotted vertical lines in the RSI pane represent Gann dates. The last 2 have been spot on for very tradable lows. The next date takes place on December 2nd.

Bottom line - I'm expecting price to start retracing very soon. The retracement levels are on the chart.

Prices basis December contract.

The grains have had big reactions off of the moons as of late. We have a moon on Monday the 16th.

DOW

Was today an important date?

Today was scheduled for a KoolsTools cycle peak in the DOW. This comes from the 3/6 and 7/10 dates.

Also noteworthy, today marked the 50% Fibonacci level in terms of time from the 10/11/07 H and 3/6/09 L.

Crude

Well, obviously the triangle didn't work as price traded through the 76.71 L.

I will go with the alternate tonight, while tomorrow I'll come up with a new alternate and another wag to this corrective mess :)

Not much to say except it appears that we should have additional downside price action, as structure does not look complete.

Although I took this snapshot prior to putting my channel work on the chart, it is channeling very nicely so far.

RSI is already starting to show divergence, which seems early. Generally, you witness your RSI extreme with the completion of a third wave, though there is still time for that to happen.

Barring an extension of (5), we should see the completion of micro [3] very near the 161.8% projection of [1] at 75.87.

Notice the 261.8% projection of sub-micro (1) sits at 75.68.

It should also be noted that the daily 50 sma sits at 74.57 and currently rising. We broke through the 20 sma and failed the retest, which usually suggests that we head for the next major moving average.

Crude

What the hell pattern is crude in? I'm not real sure folks, but here is a wag.

This market appears to be tracing a combination of some type. I show a zigzag/flat/triangle on the chart.

A double zigzag down to (w), then an expanded flat up to (x), followed by a triangle for (y).

Notice how range has really started to contract the last several days. This is a big chart and if we are tracing a triangle it would appear that we have several more days of choppy consolidation.

This pattern would suggest that resolution of this mess will be to the upside.

Any trade through the 81.06 H or 76.71 L will invalidate this view.

It's also possible that this is just a simple (a)(b)(c) structure and we have put in i and ii of (c) down.

As I said above, it is entirely guess work on my part.

Weekend Update - ES

ES
I don't have time for writeup.

I have taken this near-term view, which is spelled out on the Renko chart.

Sure looks like a clear triangle to me, which suggests a (c) leg higher to finish [ii], or a B wave.

November 16 is a date that has my interest.

Weekend Update - #2

30 YR BONDS
The 30 Yr failed its retest of the 50 sma, which resulted in nice downside price action for the week.

The 50% retracement level of the move off the 111-23 L, which I have labeled (X)?, supported price again. I believe this level gives way rather soon.

Equality comes in at 114-16. The minimum downside objective is 116-26.

My guess is that price wants to test the 114-26 pivot. The 78.6% retracement level is in the same area.

The bigger picture still remains unclear to me. If the 30 YR did put in an intermediate (X) wave at the 123-25 H, this would mean there is another (A)(B)(C) that should play out to the downside.

Bottom line - I still expect to see another 5 waves down of minor degree, at minimum. We will reassess at that point.

CRUDE OIL
The crude market continues with its corrective off the October 21 H. We have spent 12 trading days in this choppy sideways pattern.

Until structure suggests otherwise, I will continue to assume that we finished a minute degree wave [i] at the 81.99 H.

Friday's price action gave us a decisive close under the 20 sma. If we go back and retest the 20 sma with a failure, look for price to try and find its way back to the 50 sma, which is currently at 73.78 and rising.

I will reiterate from last weekend's update, this move off the 81.99 H in no way appears impulsive. This is suggestive of higher price.

The retracement levels of minute [i] (or whatever it turns out to be) are on the chart.

We are due a minor KoolsTools cycle low Wednesday.

Prices basis continuous contract.

DOLLAR INDEX
The greenback had a huge spike higher Tuesday, before spending the rest of the week retracing the move off the 75.085 L.

It appears that early morning spike was a "thrust" out of a (iv)th wave triangle. If correct, the 77.50 H completed a 5 wave structure that would be labeled minute [i].

The ensuing retracement would be the wave [ii] retracement. It is unclear if [ii] has finished or not. It has retraced 78.6% thus far, a perfect wave retracement in my opinion.

Notice that RSI has failed to breakout of the 50% level once again. This has become the rock of Gibraltar.

Also notice that price could not successfully close the 50 sma.

Both of these appear to be setup to give way when we get our next 5 waves up.

The 75.085 L is a critical level for this assessment. Should we trade through that price, we obviously have something wrong.

Prices basis combined contract.

GOLD
The gold market had hard upside price action this past week.

I stated last week that I was suspicious that minute [v] had in fact completed at the 1072 H. Those suspicions were confirmed with price action.

My best guess is that minute [iii] actually finished at the 1072 H, though I have it labeled as a minuette degree on the chart. It really doesn't matter, as this leg should finish off structure out of the triangle.

It appears that we should have one more small subdivision higher, though it certainly may be complete.

Once we can count a 5 wave move down, that will be our confirming evidence that intermediate (B) is finished.

Bottom line - it appears we are very near an intermediate degree top. Once in place, structure suggests that we should see price trace out an intermediate degree (C) leg down.

This should take price down to the price extreme of (A) around 700, assuming my interpretation is correct.

Price basis December contract.