Weekend Update ES

SPX We are very close to completing (A)...if I'm interpreting structure correctly. My guess is that we should conclude this wave by Monday or Tuesday at the latest.

Once complete, look for an ensuing (B) to the downside to kick-off. (B) will take the form of a zigzag, triangle or flat. A nice sharp zigzag would be my preference, as I plan on putting on a put position.

My guess though is a flat, possibly expanded. This would suck in new longs while shaking out the amateur shorts.

ES It appears as though we finished off the wave 4 corrective on Friday and have started 5 in earnest.

We clearly have 5 waves up off the 962.50 L, which is labeled in cyan. It looks like a bunch of 1's and 2's. This of course means that 3 of 5 is extending (if correct).

We know that the second set of 5's can not be 3 because it would be the shortest wave. That would break an EWT cardinal rule. I'm sufficiently satisfied that 3 is extending.

Targets? It appears that the minimum 1 - 3 projection will be easily surpassed. The 78.6% comes in at 984.50, but it doesn't appear as though that target will be high enough. I will be watching the 990 area (100% of 1 - 3) and the 995 level, which I discuss below.

Here is the 2.50 point range chart with my channel. Don't be surprised if the mid-line comes in play again.

Also notice the inflection point around 995 where the mid-line and the 1 - 3 line meet. This could be an important level.

RSI more than likely will be divergent at the completion of this 5th. That shouldn't come as a surprise, as that's what happens with 5th's.

This is a 60m chart with a Gann Fan from the March lows. Notice the inflection point where the trendline across the highs and fan line meet.

The 995 price level is a 685% Fibonacci projection from wave 1. In my work, I have found that when wave 3 extends past the 423.% projection, odds favor price reaching this level. This is also a 50% projection of waves 1 - 3.

By no means a certainty or guarantee folks. If structure allows price to get that high, I will be looking for price to turn there.

Weekend Update #2

Crude Everything was going to plan following Thursday's action. Then things had to get tough...what's new.

There are basically three scenarios at play here:

1.) A finished on the 21st at the 66.68 H. What has ensued is a big expanded flat with B completing on Friday's 68.18 H.

2.) A extended and completed at Friday's 68.18 H.

3.) A finished on the 21st at the 66.68 H. An ABC finished on the 22nd at the 63.76 L. We are currently in C.

There are issues and challenges with each count. I still favor #1 and that is my preferred current count, but in no way am I so inflexible that I wouldn't ditch it if structure tells me to.

In order to maintain this count, price needs to immediately turn down when trade opens Sunday night. B has reached the 150% extension of A. This is about the maximum it can go for an expanded flat.

#2 is my alternate with #3 my backup. I have shown #3 on the daily chart.

It is worth noting that price traded into the territory of the 6/23 swing low (A on daily). This validates that we are in a corrective, not an impulse down.

Gold GC had a very good week. I'm maintaining my intermediate bearish count. The line in the sand remains 992.10. Should price trade above that, I will change to my bullish alternate count.

On a bigger picture, Gold appears to be waiting for an explosion higher, which I believe will happen. Currently, structure is telling me that it's not quite finished correcting in price and time.

Dollar Index The Dollar appears to be very close to completing its (C) leg. This will also complete a 2 or B.

Regardless of which it ultimately turns out to be, the Dollar is getting ready to start a move higher. This of course, assumes I have interpreted the structure correctly.

Targets higher? Start with the 92.212 H that was made 11/19/08.


30 YR Bonds As stated previously, I believe the 30 YR has completed A down and is in the process of tracing out its B wave. I currently have 2 being played out (minor change from last week).

There is still a possibility that (C) of A has not completed. If that is the case, then it would currently be in 5 down.

Bottom line is that the 30 YR should see some upside pressure soon.

Weekend Update #1

SoyBeans Nothing has changed in my assessment of beans. It still looks ripe to begin the meat of its decline - 3 of 3 of 3.

The key area that we need to pay attention to is 1063.75. This is the high of what I have labeled (2). Should this level be breached, it will invalidate our 1 and 2 count.

This will also trade into the price area of 1. We will need to re-assess the structure should that happen.

Corn It appears that Corn has finished (3) (notice channel break) and is in the process of tracing out (4) .

If correct, targets on the retrace are the 23.6% at 330.625 and the 38.2% at 347. The 4th of lesser degree fits right in the middle.



Wheat It appears that Wheat has started its 3rd of 5. I have drawn a new channel to reflect
4 being complete.

Should wave 1 equality play out, this would put a target around 472ish. Keep in mind that commodities like to extend their 5ths.

If my interpretation of the structure is correct, Wheat should be making an important bottom in the next few weeks.

Crude

Crude had a huge range today of over $3 finishing up $1.76. That is ES equivalent of over 60 handles!

Upside was certainly expected, as posted yesterday. It appears that it completed its (c) leg to finish off B. If correct, we should see structure start to head south.

We had a 78.6% retracement from the initial leg off the high. The 127.2% extension of this came in at 66.46. Swing low was 66.46 (and AB=CD). Once again, pay attention to reciprocals folks.

Crude looks like it has setup a H/S on my trading chart (144T). It also appears as though it wants to fail.

It measures .80 and targets down to around 65.90. The 161.8% projection from the high is conveniently close at 65.96. We will see how this plays out.





Here is a look at what the Ensign Map forecasts for tomorrow. The Map can be uncanny at times, and not at other times. I do not trade solely from what it is forecasting - nor should you.

ES

The market decisively broke out of its consolidation today with volume better than the last 10 trading days, but still not as much as the July 8 down day. Range was 27.75 handles.

It appears that we finished another extended 3 of wave 5 (white). If this is correct, we are in the process of working on 4, which has taken the structure of a expanding flat.

This is a fairly deep retracement for a 4 wave, having surpassed the 50% retracement mark. It is also a very extended flat correction. The low of 962.75 is within a few ticks of the 361.8% projection. Makes you wonder...huh?

Bottom line is that we should see one more last little push to complete 5 (white) of A. Keep in mind, there can always be truncation of the 5th. This means that it does not actually surpass the 3rd wave high, or just barely exceeding it.

I bring this point up due to the fact of the deeper retracement we got with 4. Once 5 counts - it's finished, even if it hasn't reached the 3rd wave price level.

Regardless of where 5 finishes, that completes A and an intermediate sized correction will unfold. It will take the form of a zigzag, flat or triangle. It is way to early to determine which structure will play out. I can assure you that it more than likely will be choppy with hard to discern subwaves. What else would they give us...something easy?

Not only did structure tell us that 3 was nearing completion - RSI was screaming it as well.

I have two sets of channel lines on this chart. Notice the dark red one, which is the 2-4 line. Look how the mid-line has a done a pretty decent job of providing support and resistance, including today's highs.

This was the big triangle that I was looking at yesterday. My best guess is that it is not a triangle, but we did have a smaller one.

It really makes no difference, however, in the overall count. What matters is where 1 starts.

They were buying - what's new. I see R3 up there at the highs.

Crude

Crude appears to have finished an (a) leg up and is in the process of working on an extremely ugly (b). This may very well turn out to be a triangle.

The other option is that it has completed a flat. Very complex looking (b) wave, which is not unusual.

If it indeed is a triangle, it measures .96 and targets 66. Fib projections of (a) start at 66.05, which is the 61.8%. The 78.6% retracement from the 66.68 H is 66.06. So we have a nice confluence of numbers around 66. I would expect decent resistance at that area.

We still have the daily 2 bar projection to 67.62. I fully expect that to be hit in due time.

I will be looking for crude to finish off its (c) tomorrow. It may very well happen prior to pit opening. Whenever that happens, we should see some type of downward structure play out.

I might add, there is a chance that this is a 4 wave and not a (b). My guess is that it is a (b).

Here a look at this potential triangle from the 144T. Triangle or not, it should break higher.

ES

A negative day! GS must have taken their traders out on the corporate yacht or something. We had a 13.25 range today, while volume came in heavier than the three previous up days. We actually made a new bear rally high at 956.75, but they couldn't hang on to the gains.

The structure and subwaves continue to be difficult to discern. They are choppy and overlapping with an intermittent wave that has zero retrace.

It appears that we may have had a triangle today, however, it was not the one that I was looking at, which was bigger in scope. The best count I can come up with is that we have completed the A and B legs of a fairly good sized expanding flat. If this is correct, we would currently be working on C down. There are certainly other possibilities. Maybe it's a big ending diagonal?

Once the flat completes this could finish 4 (white) if both time and price are satisfied. Targets are shown on the chart. The 127.2% sits at 935.50, which is fairly close to the 23.6% retracement of the entire 3rd wave.

This is a nice picture of how the bigs started unloading at the highs. Notice also that they really threw them away in the last 15 minutes of trade.










Here is a nice Bearish Butterfly that completed at the highs. It was not perfect by any means, but highly effective.

Bank bailout could cost over 23 trillion!

http://http://www.marketwatch.com/story/us-financial-rescue-tab-pegged-at-24-trillion?siteid=nbsh

Unfortunately, I am willing to bet that by the time it's all over that number will look small. Sickening.

EURUSD

Here is an update to the EURUSD cross. Notice the beautiful ending diagonal of its C wave to complete E.

The triangle targets 1.46516. Remember that a triangle precedes the final actionary wave of 1 larger degree. This is a 4th wave triangle, which means when EURUSD completes its 5th from the thrust out of the triangle, you can expect price to head south.

This fits very nicely with the dollar's current structure.

Crude

Crude may have finished A up. We have broken the channel after completing 5 waves up. If correct, we should see B kick into gear, which would mean downside pressure.

Sorta has a H/S look - doesn't it? The 38.2% from the lows comes in at 63.87 and the 50% is at 63. I have to maintain a negative bias until B completes.

The important thing that happened was printing below 59.41 at the completion of A. This reinforces that this move from the February lows has been corrective. How? Because the second set of 5 waves came back into the price territory of the first set, thereby, negating the possibility of an impulse structure.

ES

We had a half way decent range today of 16.75 points, but it was very tradable for a change with 3 nice swings. Volume came in stronger than yesterday. This makes 7 days of upside. Is it me, or is the last hour ramp job on low volume so blatantly obvious?

I have done something that I totally despise that MOST counters I see do regularly. That is gloss over the small stuff to get to the bigger picture. I am assuming that 3 (white) ends at the 956.25 H. Can't get a count up there, but I'm choosing to go with that.

We clearly had 5 waves outta the triangle and 5 from the 937.25 L. Who knows. If I need to change it again - I will.

We had a beautiful zigzag off the 956.25 H to complete A down. Notice from this 1m chart that this last squeeze higher is a corrective. Most people will assume that we finished 4 (white) down. The structure says differently. There is NO way to get around a corrective here. As noted on the chart, we came back into wave 1 territory and this disqualifies an impulse.

Be on the lookout for a big triangle or flat. We had 3 down with the zigzag, and now it appears we have 3 up with a steroid induced zigzag that should complete B. If a triangle, the range will narrow and trading will slow down. If a flat (my preference), expect a structure similar to the zigzag but with another 5 wave structure attached.

At their lowest the 100 lotters were around -41k, but finished about -20k. Both sizes covered nicely into the last 20 minutes.











What a beautiful structure and pattern. They turned this pig exactly at the 88.6%, completing a Bullish Bat pattern. Hope I wasn't the only one who got long down there. And for those that did, I hope you didn't bail at 48 like me!

The 88.6% is an extremely important ratio. Any serious student of ratio analysis should have it in their repertoire.

ES

ES had a range of 15.50 handles today and volume fell considerably. Most time-frames are showing negative divergence.

It is very hard to discern the count currently. My best guess is that we have finished 3 (white) and are in the process of working on a 4, however, that's not a certainty. We had a clear ABC down from the 940.75 H. From there it gets very messy.

Perhaps we are tracing out some sadistic B wave of an expanding flat. If that is the case, we would still have a C leg down. Who knows at this point.

Here is what I do know:

1.) This market is very overbought currently and in need of a breather.

2.) Notice how price is wedging. That is a clue that a pullback is imminent.

3.) We have reached a zone of resistance and the 1 bar daily projection of 950 could be considered met. It also appears that we may have had an ending diagonal at today's high (yes it counts in 3's).

Bottom line is that we have a pullback starting very soon. This should take care of 4 and set the stage for a 5th to complete a bigger A.

Lastly, don't forget we have a solar eclipse due tomorrow!

Crude

We changed to the September contract, so prices are a little different. I have to believe, based on the structure and price, that C finished.

The proportionality just doesn't look right for this to be a 4th compared to 2. I have changed my count to reflect this. If this is correct, this will also complete a bigger A down.

Crude pulled back today as expected, however, it was from higher prices, as it had another upleg left in it. We should be running into decent resistance and to nearly completing the B leg. Understand that B's can, and often do, become complex.

The 50% retrace is around 66 and the 61.8% sits at 67.61.

Weekend Chart Update #3

Here is my preferred big picture count. I believe that we have completed a double zigzag (Y) at the 956 high. It appears that we have finished an ABC structure at the 869 low, which I have labeled X. I am of the opinion that we are in the process of tracing a "triple zigzag", which consists of 3 sets of zigzag correctives with intervening X waves to separate them.

This is a rare pattern, but basically comes into play when a "double zigzag" (2 sets of zigzag correctives) has not retraced an adequate amount. 3 is the most that is allowed. When this structure is complete, then this bear rally will conclude. That assumes that I'm correct in my interpretation of the structure.

My alternate is at the bottom.

Friday was a smallish range day, putting in a small bodied candle (SPX was a doji). This was to be expected, if in fact, we were in a 4 wave (white).

It looks as though we finished a 3 (white) late Thursday. We may be tracing out another triangle (dotted yellow). We should know fairly quickly, maybe even by Sunday night globex, as it looks close to completion.

I would be surprised as wave 2 was a mess and alternation would make sense. Perhaps this turns out to be a flat...that's how I have my labels set. We will know soon enough.

When 4 completes, there should be one more 5 wave structure up to finish off A. At that point, we will begin correcting the move from the 865.25 L. Targets for this upcoming 5th are guessing games right now. It depends on what happens to this 4th. If you assume that 928 will be the low, then the 61.8% sits at 974.75. Due to the extension of the 3rd, it makes more sense to look at wave 1 equality, which is 19 handles. Currently this puts the target at 947 - pending 4's outcome.

This is a weekly OEX line on close chart. There are some interesting trendline fits. The dark gold lines come from a Fibonacci fan from the highs. Again some interesting fits.

The middle pane is a stochastics (5,3,3). The first thing that jumps out is the divergence that came from the June highs. That looks small compared to the potential divergence setting up.

I spent way to much of my Saturday looking at charts. I'm throwing this in to just let you be aware that there are valid bearish scenarios. We don't have to keep screaming higher.

This chart assumes that our highs finished an A and we are working on a B. What if this is an expanding B wave triangle? It's possible, though the probabilities are very low.

Another scenario that is possible. Assume again that we finished A. Now move your triangle labels over and start A where big A is. Another expanding triangle that would eventually call for higher prices, but they would certainly go lower first.

Again, low probability in my opinion. Keep an open mind and don't get married to a bias.