Weekend Update-ES

ES
Has the counter trend bear rally run its course? The necessary requirements are in place.

This is a 60 minute pit session chart. Notice the beautiful looking structure. This shows cleaner, much nicer looking waves from the 975.50 L.

I show two counts on this chart. My best guess is that structure has not finished tracing the last minute [5]th wave. Yet, you could certainly make the case that [5] is finished, which would complete minor C up.

The issue that I have with the C being finished scenario, is that it does NOT appear to be an impulse off of the 1038.75 H. I think it counts much better as a double zigzag (w, x, y).

This suggests that structure has not finished its upside work. I could also be wrong in my interpretation. That is why I will use that as my alternate count.

I show minuette (i) and (ii) complete. If this is correct then we should be entering the meat of (iii) of (v). When globex opens tonight, I would expect price to start moving higher, if not gapping up.

If price action does not start higher and instead moves down, or worse - gaps down, I would be very worried if I were a bull.

Notice that we are right at the channel line. This needs to hold for the bullish case to be made.

Important levels are the 1022 L and more importantly, the 1014.75 L. Should the 1014.75 L give way, I would immediately assume that minor C has completed.

As stated above, all the necessary requirements are currently in place for a significant top to be in. This would include both time and price.

We have extreme bullishness. As a matter of fact, more extreme than we had at the 07 high according to the Daily Sentiment Index.

This leg of the advance has most certainly been weaker, based on the internals, than the preceding minor A. Just about everything is showing a negative divergence, including RSI.

W.D. Gann said that you can look for tops in the 90th - 99th day or week. We will be entering the 99th week of trade from our top in 07.

Prechter came out on Friday with a short and sweet interim report. In it he said "traders should move back into a full short position today." He also said, "given the extent of the rise, there is no longer much reason to allow for a more complex corrective pattern to unfold."

Could there be a little bit further to go on the upside? According to my count - yes. But folks, we are almost there. I believe the next phase of the market is very close.

If your one of those that rode this to the bottom and back, the market gods have been kind enough to allow you to be able get out with at least your shirt, should you choose to do so.

My belief is that you wont get a second chance. Whether this is "THE" top, or just a top, wont be known until after the fact. Be careful out there.

I apologize for not being able to get this update out sooner. It takes a lot of work, and more importantly, a lot of time to put these updates together.

The only way I know if anybody is actually reading this, is the occasional comment, but those are few and far between.

Edit: as I finish this up, globex has opened with a gap down to the 1025 level. This is not good news for the bullish case. Again 1022 is a level that needs to hold. Should that fail, then 1014.75 is the line in the sand.