Weekend Update #2

30 YR BONDS
The bond complex continues to confound me. I thought I had a handle on what structure was doing, but I'm losing confidence in my assessment - fast.

I currently have bonds tracing an expanded flat minor 2 wave. The line in the sand with this count is the 121'11.5 H. This breach of price will invalidate a wave 2, as well as, invalidating a triangle.

We came darn close on Thursday, registering an intraday high of 121'07. When drilling down on a smaller time-frame, price action does not appear to be impulsive off that high.

Intermediate wave (1) L is 121'23.5. Should price continue moving higher, this level will be important. If this level is broken on the upside, this should lock-in the 111'21.5 L as an intermediate tradable bottom.

I'm still hopeful that 121'11.5 holds. I'm bullish above that level and bearish below a 114'25.5 break. Sorry folks, that's the best I can do at this point.

All prices basis continuous contract.

GOLD
This is another market that's frustrating both bull and bear.

They are most definitely coiling this up for a break. Which way? You can make a prudent argument for both up and down.

Long-term I believe structure strongly suggests we should see significantly higher price. From an intermediate standpoint, it suggests that price should see lower lows before the launch. Near-term, the picture is unclear.

It does look like a triangle has traced. In fact, minute [e] should be complete, thus suggesting that a "thrust" out of the triangle should be happening. Friday was a good start, but notice that the entire day was spent retracing 10 minutes worth of upside action around 7:30 am cst.

I just don't see a thrust, nor do I see impulsive price action off the 931.30 L. I will maintain my current count that we are in the beginning stages of intermediate (C) down.

I will get bullish with a price close above the 974.30 H and base channel (preferably with a gap Monday). I will get uber bearish with a price close below 927.60. No use making any wagers prior to one of those levels being violated.

Just be patient...structure will reveal its true identity soon.

All prices basis continuous contract.

DOLLAR INDEX
Has the dollar escaped with just a near death experience? Not sure, but this pig needs to make a move now.

I think you can pretty well use the 77.81 L as the line in the sand. If that level gives, you can bet that the 77.52 L is doomed (and my bullish view).

Odds favor a break lower imo. I'm not sure how you come up with anything impulsive with price action off the 77.81 L. Perhaps, it's beyond my skill level. Perhaps, it's just not there :)

I will maintain my bullish count until they break the minute [ii] 77.81 L. This will mean that intermediate (C) has not finished its business.

We need to see price take the 78.895 H for beginners. If they can accomplish that mission, 79.695 will be the next target.

All prices basis continuous contract.

CRUDE
The crude market pretty well followed my expectations for the week, although I thought that price would reach a little higher.

It appears that minuette (b) has finished at the 69.83 L, though not a certainty. We have a nice clean 5 wave structure up from that level, which I have labeled as sub-minuette i.

Once we have completed 5 sub-minuette degree waves up, we should finish (c), thus completing minute [b]. Minute [c] down should follow.

Notice how price was rejected at the corrective base channel.

Also notice the RSI divergence at the top of the micro [5]th. Exactly what should be expected with a 5th wave.

It appears that we have finished ii down and have started iii up in earnest. If [2] has completed, which is unclear at this point, we should enter the meat of (c)'s advance.

Near term, I expect price to follow through to the upside. We should see the completion of [b] later in the week.

(w) = (y) at 80.38. the minimum objective is the 61.8% of (w) at 75.25.

I'm anxious to see if they break price out to a new recovery (and yearly) high. This is at 76.56.

A double zigzag is comprised of 7 waves, which fits right in with my friend, buddy, pal Kools "7 Wave Trend Killer." The daily clearly shows the first 6.

All prices basis continuous contract.

Weekend Update - Grains

SOYBEANS
The bean market continues to shun the rest of the grain markets (including rice and oats) and do its own thing.

We had decisive upside price action this week, taking out the 974.25 H on a close basis. This forces us to replace our count with the alternate.

Cycle b wave obviously requires additional work. I show a double zigzag currently tracing. This entails two sets of ABC's with an intervening X wave.

We should be finishing up another primary [A] wave very soon, if we didn't on Friday. At completion, a primary [B] should ensue with the final [C] following.

[Y] = [W] at 1263.75. [Y] = 61.8% of [W] at 1066.125, which would be the minimum objective. The 78.6% retracement of a sits at 1148.25.

I suppose that the old count could theoretically still be alive, however, it looks so goofy that I give it low odds.

IF price somehow were to get back to the 1336.50 H, then obviously something is very wrong. I guess we can cross that bridge, should we need to, at that point in time.

All prices basis continuous contract.

CORN
The corn market remains in its downtrend.

It is unclear if corn has finished this corrective or not. I have left the retracement levels on the chart if price needs additional time and/or price to complete this counter trend move.

It is also possible that primary wave [4] needs additional work. A triangle could be tracing here. If so, this leg would appear to be (c). If a triangle, price should not exceed the 373 H.

Assuming that [4] is finished, the first order of business would be to break the 312 L. The first intermediate degree target is 279, which is where (3) = (1).

The minimum primary objective is the 61.8% projection of [1] - [3] at 278.125. [5] = [1] - [3] at 219.50.

All prices basis continuous contract.

WHEAT
The wheat market continues with its dowtrend. It appears that it traced out a corrective flat this week and is ready to resume selling.

I am not sure exactly what finished at the 486 L. I have had an intermediate (1) of (5) label, but it very well could be wave (3). My guess is that the pivot low is most likely wave (3).

Regardless, this downside structure is nearing completion if my interpretation is correct. I have introduced a new alternative count, which is a much more bearish count.

It has wheat in primary [3] currently. This count would portend much lower price. This view, I believe, is a lower probability outcome.

The first order of business is for price action to take out the 486 level. This would confirm that the corrective is indeed finished.

IF we have completed a 1 and 2 off the corrective 517.25 H, then we have minor degree targets at 475.25 (161.8% projection) and 453.25 (261.8% projection) respectively.

Primary targets include the 61.8% projection of [1] - [3] at 465.75, which is our minimum objective. [5] = [1] - [3] at 391.50.

All prices basis continuous contract.

Crude

Very nice reversal for crude off the morning lows. Volume was better than yesterday, but nothing to write home about. Range was $3.12.

There are several ways to label the structure down to the 69.83 L. More than likely it was a flat-x-zigzag, but it makes no difference. The important point is that I believe that minuette (b) has completed.

We are impulsing up, which is exactly what should be happening. My interpretation is that we are tracing a double zigzag for minute [b] wave. This should be the last (c) leg that will finish [b].

If this assessment is correct, we will see higher price, and possibly yearly highs. AB=CD at 77.85. Should we reach that level, we would attain new recovery rally highs.

Notice the nice hit of the 261.8% projection. We also sniffed the lower boundary of the daily channel.

RSI had a monster positive divergence at the 69.83 L.

It appears that we have finished micro [1] - [3] and are currently working on [4]. There is a chance that the degree's should be ratcheted up by one. I have the retracement ratios on the chart.

We should finish up [5] in quick order tomorrow that will complete sub-minuette i.

My channel assumes that [4] has made its low. There is a good chance it has not. I will adjust the channel if needed.

ES

The equity markets had a nice recovery after early morning weakness. We had a 18 handle range and volume was better than average.

It appears that we are impulsing up from the 1014.75 L. Outside of the 1st wave everything is nice and clean.

I have caved in and will assume that minute [iv] has finished at 1014.75 (notice the 38.2% retrace). The big reason has to do with how crappy the internals are. I just can't believe that we would be ready to launch with where the internals sit.

Take a look at the daily candle registered again today. I know I have been referring back to the mid June period a lot, but look how similar structure is. The chart is telling us something folks.

I would like to say that minuette (i) finished at today's high, but I believe that 1032.75 finished sub-minuette iii. We should see one more push higher to complete (i). This of course assumes I'm correct in my assessment of structure.

Pay attention to price action when we get to the mid-line.

Near terms targets include the 61.8% projection of [i] - [iii] at 1039.50, while [v] = [i] - [iii] at 1046.50.

I do believe that price works its way higher, however, I no longer think we will get as high as I originally thought.

On a totally different subject, I couldn't get on eChat today. Have we shut the room down? Perhaps someone would be kind enough to post in the comments.

Edit: I forgot to mention the dollar's action today. Complete crushville! What the hell happened? Somehow it held support, but it doesn't appear it will for long. I believe were now down to a 1 outer - at best.

Edit: I came out very well on my globex trade. Had my stop in the right place :)

ES Intraday

There is definitely no triangle in play. This is what I'm currently looking at.

It appears that we are impulsing off the 1014.75 L, however, I really don't like what would be a sub-minuette i wave that started us out.

Nice hit on the 38.2% retracement. The 1:1 came in at 1014.25.

The minute degree waves may or may not stay.

Notice the nice channel action as well.

ES

Pretty choppy, pretty slow, pretty uneventful sums up today's action. Range was 11.75 handles, though volume was about average.

Don't like these daily candles. Small bodied spinning tops/doji like.

I really don't have a perferred count. I show several possibilities on chart. My guess is that we either have a triangle in play or some complex 4 wave.

It's also possible that i'm worried about nothing and we have put in some i-ii, [1]-[2]'s and it's ready to take off. Problem with this count is the internals are not matching up.

If we are tracing a triangle, my bet is that d has not completed and needs additional work, as talked about in eChat. Remember that triangle leg's need to be 3's. d appears to be a 5.

As mentioned last night, it feels like my count should be further along in the process than what I have it at.

I do have some fib projections (white) on the chart that are taken from the 1018.25 L, 1038 H, and 1020.25 L.

I would expect some type of resolution of whatever the structure is tomorrow (I hope).

FWIW I'm long 1023 with a 1020 stop.

Crude

Crude put in a doji day. Range was 1.97, while volume was considerably less than yesterday.

As expected, it appears that micro [5] finished up today. If this is correct, sub-minuette c and minuette (b) would have completed as well.

Price action does not appear to be impulsive off the 70.67 L. Perhaps we will see something complex for (b), or maybe c is still incomplete.

I'm satisfied that [5] finished, as it counts fairly well. I do have an alternate that may come into play. It's possible that the 5 waves down only finished a. This would imply that minuette (a) finished at the 75 H in a double zigzag.

Don't forget that this is a minute [b] wave that price is tracing. B waves are notorious for being complex.

Notice the monster positive RSI divergence registered at the 70.67 L.

We need additional information to make a determination of what exactly structure is up to. Should we takeout today's low, I would more than likely switch to the alternate count.

ES

Another day of bear rally highs that couldn't hold. We had decent range at 19.75 handles and actually decent volume as well.

I show a i, ii with today's price action, but have a very low confidence in it. Just doesn't look right to me. Feels like we should be further along in the count than what I have it.

I sorta like my alternate with a triangle tracing. What I don't like is the break of the channel. I'm also not thrilled with the divergences that are showing.

I would like to be bullish for higher price due to where I have us in the count, but something is bothering me about structure and internals here.

The daily candles are looking like they did back in mid June. Those are not bullish candles folks. We had about a weeks worth of 'em back then. A big downside break followed.

I'm not suggesting that is what is going to happen, though it certainly could.

We could very well still be in minor B tracing an expanded flat, but I don't think so. I'm more apt to think that this is [v] of A, as crazy as that sounds.

Not real sure exactly what's going on - I just know I don't like it.

Bottom line - price should continue higher if I'm any where close to being right about structure, however, I think something is wrong here. Call it a gut feel.

Crude

Crude was taken behind the woodshed today. Range was $3.85 with greater than average volume.

The downside breakout was expected as sub-minuette b turned complex, but looks to have completed at the 74.96 H.

It appears that c down is in full force. I believe that micro [1], [2], and [3] have completed. [4] appears to still be tracing, and may in fact be turning a triangle. It's to early to make that call.

If my assessment of structure is correct, [5] should finish up sometime tomorrow. This will finish c, thus completing minuette (b).

There is always the chance that when this expanded flat finishes, (b) will take on a complex structure if either price and/or time requires it.

Regardless of when (b) completes, we should see another leg higher to ultimately finish minute [b].

Targets for c should include the 161.8% extension of a at 70.62 and the 2:1 at 69.75. [5] = the 261.8% projection of [1] at 69.83. The 61.8% of [1] - [3] sits at 69.80.

We came within $.01 of the 1.618 daily projection (KoolsTools) of 74.97. If price breaks this level, it generally signals that it wants to go to the 2.618. When price has trouble at the 161.8, it is warning you that it may not want the upper projection.

My alternate is at the bottom.

Bottom line - I expect price to finish up minuette (b) in short order.

Crude

Crude finished higher, however, she couldn't close above Friday's high. Range was only $1.24 (about 25 ES handles) on fairly light volume.

I believe that crude is tracing out an expanded flat here for its minuette (b) wave. If this assessment is correct, price should go back to the low of sub-minuette a.

If you look at the daily, we are bumping up against the upper channel line of this entire minor B structure.

We also had monster RSI divergence.

If price takes out the 74.81 H, then something else is more than likely going on.

Since this is a c leg, we should see a 5 wave impulse down. I'm not sure we can say that so far.

ES

ES made new bear rally highs today before giving it all back. Range was 13.75 points on contracting volume from Friday's OEX. The daily put in a bearish shooting star candle.

I show four different counts on chart. My preferred (sorta) is that the 1032.50 H completed minuette (1) of minute [iii]. I have tried to force an ending diagonal in at the 1035 H, but it just isn't there folks.

This means that this is another expanding flat, which by the way is the most common, for (ii). Notice the 138.2% fib relationship again.

The other counts are at the bottom. It is possible that minute [iii] completed. If that is the correct interpretation, I would expect [v] to extend, or at least rival [iii]'s distance at minimum.

It is also possible that we completed [b] of minor B. Yes folks, I hate to say it, but we could be tracing a big expanded flat for B. If correct, price will travel back down to the end of [a] around 976 before starting it's minor C leg higher.

The risk/reward ratio at this point in the game clearly doesn't favor the bulltards. I moved the girls 529 money out of equities today. I may likely miss some additional upside, but why try to squeeze out the last few drops.

Lets see how price action treats us tomorrow.

I hope those 100 lotter's that tried to keep the market propped up there were GS and JPM trading desks :)

Weekend Update ES

ES
It appears that we are well into our minor C leg, although, it's still possible that this could be part of a complex structure for B. I'm satisfied that minor B completed at the 976.75 L.

I have minute [i] finishing at the 1003.75 H (27 handles), which was followed by an expanding flat for [ii]. If this is correct, then the flat would be a "running flat" (p. 48-49, figure 1-39 Elliott Wave Principle). That is simply an expanded flat where price doesn't make it back to the bottom of A.

That is a very rare pattern, so I'm wondering if it is indeed correct. Perhaps not, but I don't know how you can get a 5 out of the move off the 994.25 L.

It appears that we are close to finishing another 5 wave impulse, if not already completed. I have this as a sub-minuette degree, which would complete a minuette (i).

5 minuette degree waves should complete [iii]. We will then have a corrective [iv], which is followed by the [v]th. Voila! minor C will be complete. Then things get interesting.

My suggestion is not to get caught up in the smaller degree subdivision of waves. If your new to EWT, or want to quit pulling your hair out, just look for the bigger degree structures.

Targets for the upside? C = A at 1126.25. C = 61.8% of A at 1068.75, which would be the minimum expected target, though it can certainly fall short.

The 50% retracement from the 07 high sits at 1126.75 (nice confluence with the 1:1), while the 61.8% is at 1237.

The monthly 20 sma is around 1078. We have not seen the average since early 08. I suspect it will provide resistance, if only temporarily.

Don't forget the 2 bar daily projection (KoolsTools) at 1036.50. This is off the 975.50 low. I also have a couple of numbers around 1038.

There is also a very important geometric line that sits directly above in what looks to be the low to mid 1040's. This is the 2.236, or the hypotenuse of a triangle for you geometric freaks.

I have the retracement fibs on the chart if (i) of [iii] has completed. Again, I would not expect a very deep (ii), but you never know.

Friday was supposed to be a cycle peak day (KoolsTools) from the 8/12 and 8/17 lows. RSI is also showing very good negative divergence up here. There are several things pointing to a retracement here. Keep that in mind.

Here is Friday's price action. For such a big move, almost 21 handles, the 100 lotter's finished basically level.

Seems kinda strange to me.

I realize that about 1/2 that move occurred in globex, but you would think there would be greater accumulation on their part.

Over the last couple hours they did have a net accumulation, while the smallies clearly were unloading.

I have received numerous enquiries about this indicator. This is the intellectual property of my friend, buddy, pal PT Emini over at MyPivots.com. He allows me to use it under the condition that I don't give it away. I respect and honor that agreement.

Here is the daily look at cash.

If there were no labels on this minor A leg, and you were trying to find wave [iv]...where would you place it? Yeah, me too.

I'm not even going to open that can of worms (yet).

Bottom line - looking for a pull back very soon. It doesn't have to retrace in points, it can do it with time. After which, I expect higher price.