ES

The equity markets did an about face early this am and put in a bullish candle after selling hard overnight. We had well above average volume and a 22 point range.

I believe that we have completed the flat that has been tracing out since the 1016 H. We had a countable 5 subwaves down from the 990 H. This would mean that minuette (v) was a truncation (didn't finish below (iii)).

According to the good book, "A truncation often occurs following a particularly strong third wave" (p. 35, figure 1-12 Elliott Wave Principle). Well, I wouldn't really call that a strong (iii), at least by my definition. But it was 31 handles.

The word often implies that it happens more times than not, but not always. The structure is what it is, and if it's a truncated 5th without a strong 3rd - so be it. Perhaps I'm wrong.

So if [c] has finished, where does that leave us? My preferred count is that minor B completed, but I'm not 100% confident about it. There are alternatives that make sense.

Perhaps the completed flat is one part of a bigger complex corrective, as my alternate count shows. If we have not retraced minor A enough in time and/or price then my alternate count will come into play.

It appears that we had a 5 wave move off of the 976.75 L. I have this labeled as minuette (i) of minute [i] of minor C up. This count would be invalidated with any price action that trades through the 976.75 L.

Here is a big picture view of the whole structure off of the 865.25 L. From a visual standpoint, I have no problem with it.

We have the "minimum" requirements for both price and time met. My preference would have been a better/bigger B retracement, and that's still entirely possible.

Targets? Firstly, we need to finish tracing (ii), as it doesn't appear to be impulsing off the 991.50 L. When complete we will be able to get short-term targets.

The gap at 1006.50 will be the first order of business, then I will assume the 1016 H should see some resistance.

Bigger targets include 1126.50, which is where AB=CD. The 61.8%, which is the minimum we should expect, sits at 1068.75. The retracements from the 07 high are: 50% = 1126.75 and 61.8% = 1237. All basis continuous contract.

I really would prefer that B be complete. The entire A leg was a PITA, starting with the 99% retrace for (ii) down there at 865.50. If C is anything like A, I'm going to go sell ties in the mall until it's over :)

Another nice day of accumulation from both sides.

There was a nice setup today with our wave iv. I'm not sure if it was a straight triangle or a combo flat/triangle. Regardless, it was an easy trade. And yes - I bailed WAY too soon.

Besides the obvious, one of the reasons I love triangles, is they are a marker. They let you know where you are in the structure. They only happen in certain places, which include 4's, B's and X's.

I would be remiss if I didn't mention that 60 minute time cycle (KoolsTools) that came in like a champ at today's high.

I covered my SPY puts at the open (literally - my time stamp said 8:30.12) for +.70. It wasn't much in terms of dollars, but $350 buys quite a few jugs of V.O. :)