VO's Market Views

Crude

2010-09-29T09:49:00.003-05:00

Crude

2010-09-27T10:49:00.003-05:00

Crude

2010-09-24T13:50:00.002-05:00

Crude

2010-09-21T11:45:00.005-05:00

Crude

2010-09-17T08:30:00.002-05:00

Crude

2010-07-28T22:34:00.002-05:00

Crude

2010-07-15T16:02:00.001-05:00

ES

2010-07-15T16:00:00.002-05:00

CL

2010-07-10T18:51:00.001-05:00

Crude

2010-07-09T11:45:00.002-05:00

ES

2010-07-09T10:57:00.001-05:00

Crude

2010-06-25T12:00:00.003-05:00

Trade of The Week for VO!!!

ES

2010-06-24T21:09:00.002-05:00

The question was not IF we get down to the 1067 area WILL it support, but rather, will there be a change in trend WHEN we get there? If structure needs additional downside, we would assume that it would continue to work off the golden triangle. That means we would look for the 190.2 expansion of the XA leg @ 1053.25, or the 3.618 projection @ 1022. The 3.618 expansion is down at the 1008.25 level.

Notice how many times the .526 and 1.902 has led to pivots on the way down thus far. Pretty amazing huh? This begs the question, could this unfolding geometry just randomly occur by chance? Just remember...all waves of similar degree will relate by both PRICE and TIME.

ES, Crude

2010-06-24T08:27:00.003-05:00

ES

2010-06-22T16:20:00.000-05:00

ES

2010-06-18T10:51:00.001-05:00

ES

2010-06-17T11:08:00.001-05:00

ES

2010-06-14T11:09:00.002-05:00

Crude

2010-06-14T08:30:00.003-05:00

ES

2010-06-13T17:23:00.001-05:00

ES

2010-02-12T01:27:00.001-06:00

Gold

2010-02-08T07:21:00.003-06:00

DOW

2010-02-07T10:43:00.002-06:00

ES

2010-02-07T09:20:00.002-06:00

ES

2010-01-27T01:05:00.003-06:00

DOW

2010-01-24T22:30:00.002-06:00

SPX

2010-01-24T19:59:00.001-06:00

Crude

2010-01-24T19:54:00.003-06:00

Crude

2010-01-06T23:18:00.002-06:00

DOW

2010-01-06T22:12:00.002-06:00

Dollar Index

2009-12-26T17:35:00.002-06:00

SPX

2009-12-22T20:37:00.003-06:00

Weekend Update - ES

2009-12-19T17:25:00.002-06:00

Weekend Update - Bonds, Crude, Dollar Index, Gold

2009-11-21T18:22:00.007-06:00

Weekend Update - ES, DOW, RUT, Nasdaq

2009-11-21T10:04:00.014-06:00

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

2009-11-20T16:30:00.006-06:00

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

2009-11-19T16:55:00.004-06:00

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

2009-11-18T23:03:00.003-06:00

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

2009-11-17T21:48:00.007-06:00

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

2009-11-16T20:21:00.003-06:00

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

2009-11-15T21:30:00.003-06:00

Another interesting Martin Armstrong read

2009-11-15T14:39:00.000-06:00

GOLD $5000+ 11/11/09

Weekend Update - #2

2009-11-13T21:50:00.014-06:00

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

2009-11-13T17:43:00.002-06:00

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

2009-11-12T23:55:00.002-06:00

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

2009-11-12T20:07:00.002-06:00

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

2009-11-11T21:10:00.003-06:00

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

2009-11-08T13:55:00.006-06:00

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

2009-11-06T18:38:00.009-06:00

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.

Weekend Update - Grains

2009-11-06T16:24:00.004-06:00

CORN
The corn market continued retracing its leg off the 302 L this past week.

My interpretation remains that this market is tracing an intermediate degree (4) wave of primary [A].

I still have concerns about this (4) wave. As discussed last week, it appears to be tracing a zigzag. After such a deep A leg, we are left with little room for C. We did have a nice B leg up that helps.

The price extreme of (1) is 347.60. Should price trade through that level, I would have to re-think my assessment of the structure.

The 50 sma has turned up, and is now above the 347.60 level. This may possibly help support price when they meet.

Notice that RSI has reached the upward sloping trend line, which dates back to early June. This may provide support as well.

Don't forget about the "point of recognition" at the 353 level, an additional possible level of support.

C = 61.8% of A at 365.25. The 78.6% projection of A sits at 356. The 61.8% retracement of (3) comes in at 349.50.

Bottom line - Until 347.60 is traded through, I maintain my bullish stance.

Prices basis December contract.

SOYBEANS
The bean market continued with its wave (2) retracement this past week.

Interpretation remains intermediate wave (2) of primary [C] of a double zigzag cycle b wave. The primary [B] wave triangle is still my alternate view.

Drilling down intraday shows a very nice ABC corrective so far for wave (2). Price had a nice deep 88.6% retrace.

Perhaps it will want the reciprocal, 112.8% of A, for this C leg. This comes in at 944.

Other targets are where C = A at 953.75, and the 161.8% projection of A at 911.25.

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

As stated last week, I am still hopeful that the channel can maintain its integrity during this retracement process. It has supported twice thus far, making it vulnerable for a break, should price reach it.

The key levels for this upcoming week include the 880.25 L, as well as the 1029.50 H. Any trade through that high will likely signal that wave (3) has begun, assuming our assessment is correct.

I maintain a keen watch of the continued RSI divergence.

Bottom line - I expect wave (2) to come to a close shortly. We should witness nice upside price action with the onset of (3).

Prices basis continuous contract.

WHEAT
Like the other grain markets, wheat continued its corrective process this past week.

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

The nice B wave bounce that I was hoping for came to fruition this past week. Notice the unmistakable zigzag look of (2).

I have the retracement levels of (1) on the chart. The 78.6% level sits at 468.50.

The minimum downside objective for this C leg is the 61.8% projection of A at 475. Equality is down at 441.75.

Notice that RSI has broken its uptrend line. This is normal and allows RSI to reset for a big (3) wave push higher.

Naturally, any trade through the 302 L invalidates this interpretation.

Bottom line - Expecting price to continue working on the (2) wave. When complete, we should witness hard upside price action, that should leave the channel in the dust.

All prices basis December contract.

Crude

2009-11-05T20:34:00.003-06:00

I just don't have a whole lot to say about the crude market, except that it continues its corrective from the past couple of days.

Off the 81.06 H, it appears to me to be a zigzag-x-flat combination.

You could make a good argument for a [B] wave triangle, with the 80.48 H completing an (E) leg. The leg off that high does look "thrusty." Those of you with a good eye should easily be able to spot the triangle form.

The bigger daily picture is still unclear as well. Has the corrective finished? Don't have enough information at this point to make that determination.

The move off the 79.34 L does not appear impulsive - go figure.

I do believe that all this mess does eventually get resolved to the upside.

Not much help here tonight folks.

ES

2009-11-05T19:49:00.006-06:00

As expected, structure played out exactly as was suggested last night.

Wave (b) was indeed complete at the 1041.50 L, right at the 50% retracement level.

Wave (c) appears to be tracing a diagonal triangle here. This suggests that (c) has finished its first 4 waves, with this being v of (c).

If this is correct, then (c) will never make it to equality. The 78.6% projection of (a) is at 1066.25. The minimum objective of 61.8% of (a) was met at 1061.

We have retraced a satisfactory amount of minute [i], as the 50% level was met at 1062.25.

I'm not real thrilled about this potential triangle development. I would much prefer a retracement process that took us to at least the 70.7% level.

There are alternatives. Perhaps this is a double zigzag combination and this is a b wave, with a nice c to follow.

There is also the possibility that if price and/or time has not been sufficient, then we would trace an (x) wave after completion of (c).

Just take it one wave at a time.

EWI FreeWeek

2009-11-05T07:36:00.002-06:00

For those of you that are interested, Elliott Wave International has a free week of their Elliott Wave Theorist, Financial Forecast, and Short-Term Update. This started yesterday at noon and runs until next Wednesday.

On the very top left-hand side of the blog, there is a box that you can click that will take you to the promotional page on their website.

It also allows you access to tutorials, both print and video, as well as a few other subscriber based features.

I would suggest downloading as much of the resources they allow you access to.

ES

2009-11-04T21:27:00.002-06:00

Quick take on my view of ES.

My guess is that minute [ii] has not completed as of yet.

I show the 1057.50 H as finishing minuette (a). Wave (b) looks to have traced an expanding flat. If this is correct, (c) up should follow.

If (b) has completed, which is not clear, upside targets are the blue fib set. Equality comes in at 1073.

The retracement levels of [i] are on the chart.

I was anxious to see how price would react to the meeting of the channels. Not surprisingly, they decided to gap it over, instead of the hand to hand combat alternative.

It should be noted that [ii] may very well have finished at the 1058.50 H, where I have b. The minimum requirements are met at that level. This is not my view, but it is certainly possible.

Bottom line - I am expecting (b) to finish up in short order, if not already. From there, we should see 5 sub-minuette degree waves up to complete (c), and thus [ii].

Scalpers like me, should find this leg up very tradable.

Crude

2009-11-04T19:52:00.004-06:00

An up and down day in the crude pits with price finishing higher. Range was $1.94 on slightly better than average volume.

I'm sticking with the 10 range chart again tonight, as it really shows the subdivisions of structure well.

We clearly had a 5 wave impulse off the 81.06 H, shown as sub-micro degree waves on the chart. The larger degree that it completed is unclear currently. I show a micro degree [1] or [A].

You can also see what appears to be a nice double zigzag that retraced back to the 80.03 H. This is labeled as [2] or [B].

So, we had 5 down from the 81.06 H, followed by a 3 up to the 80.03 H. At minimum, we should have another 5 down for either a [3] or [C] wave.

You can see structure subdividing off the 80.03 H in impulsive fashion as expected.

The pink fib set relates to the micro degree structure. Equality comes in at 79.24. [3] or [C] = 161.8% of [1] or [A] at 78.27.

Interesting enough, the 127.2% sits on top of the 50% retracement level at 78.80, while the 161.8% sits on the 61.8% retracement level.

I hope this leg really extends. I'm short with a text book entry :)

Crude

2009-11-03T19:57:00.004-06:00

After early morning weakness, crude got busy subdividing higher. Range was a healthy $3.22 on above average volume.

I show this 10 range chart because it shows the wave structure nicely. This is one way of interpreting it.

It is unclear to me if we ended the structure at the 79.77 H. If not, it may be tracing the wave [4] currently. I show the possibility for a running triangle.

The (C) leg (not shown on chart) looks to have been a double zigzag, and would have finished at the 79.13 L. If a triangle, (D) would be in process, with (E) down to follow.

Any trade through 79 would invalidate this view, as this is the price extreme of (A).

I remain sceptical that this corrective has run its course in the bigger picture.

Did you notice the explosion in gold and silver today? Impressive indeed.

Crude

2009-11-02T18:35:00.004-06:00

A little bounce back day in the crude pits. Range was $2.10 on above average volume.

Price found support on the breakout level, which is not unusual. This support was helped by the 20 sma, which was held on a close basis.

We have retraced a 38.2% so far. As mentioned in prior posts, I would really like to see a deeper retracement if this is indeed a minute [ii] wave.

In all honesty folks, I'm not exactly sure what the hell this corrective is tracing currently. I spent about an hour and a half coming up with some different ways of viewing this corrective structure.

My conclusion - I wasted good time.

I am convinced that this is corrective and not impulsive. I could throw a bunch of wxy's and abc labels on a chart, but it would just be speculative.

Best to just let this thing play out. It will let us know when it's done.

I can say that I think (guess) that the move off the 80.46 H is an a wave. It looks like today was the tracing of the b wave, with c down to follow.

I'm not sure if this was an expanding triangle or just some combination. It does appear as though we finished a little [B] wave (or [4] wave) triangle late in the day. This suggests higher price overnight.

Just count your 5's and 3's intraday and continue to take their money. The bigger picture will clear up soon enough.

Weekend Update - ES

2009-11-01T11:56:00.006-06:00

ES
Not a good week for the equity markets is a understatement. The ES declined 44 handles on the heaviest volume since March.

It appears that we will have an impulse down from the 1099 H. We have also broken the uptrend channel's from both the July and March lows. More importantly, we have a weekly close solidly underneath them.

This is confirming evidence that, at minimum, we have an intermediate degree top in place. It is too early to determine if the bear rally has run its course. It is entirely possible that is the case.

This is my view of structure off the 1098.50 H (pit session) with a 15 minute chart. This is a beautiful wave structure so far.

I have moved wave (ii) over, which gives nice alternation with (iv). This was discussed in Thursday's update. It also gives us a perfect channel.

Drilling down further, shows that wave iv of (v) appears to have taken the form of a barrier triangle (p. 50, figure 1-42 Elloitt Wave Principle).

As the good book tell us, barrier triangles horizontal line "always occurs on the side the next wave will exceed" (p. 49 Elloitt Wave Principle). This means the break will be to the downside.

If a triangle, it measures 11 handles. This would be measured from the price extreme of where [E] completes. If we assume a 61.8% retrace, this gets us to the 1024 area.

Conveniently, the 3 bar daily projection is 1023.75. Funny how things always seem to work out like that :)

The 4 hour chart gives us a look at where the retracement levels of minute [i] are.

If your bearish, you actually want a deeper retracement process. As I have noted many times in previous posts, the deeper the wave 2 retrace, the more powerful the ensuing wave 3 - generally speaking.

Notice also, we have positive RSI divergence. This should come as no surprise.

I show a double zigzag (ABC-X-ABC) for this entire structure off the July lows. EWI has this labeled as an ABC with an expanding ending diagonal for C. Ummm, if you say so.

It really makes no difference folks. The important thing is recognizing that something of intermediate degree, and possibly primary, importance has occurred.

The monthly view shows how the channel has been left intact.

Secondly, Notice how price eventually held the 20 moving averages on a close basis.

Also, notice the monthly projection has been fulfilled at 1097. Koolio's work told us this would happen 7 months ago! Did you believe it?

Bottom line - I do believe the evidence overwhelmingly supports the case for an intermediate top being in place.

Near-term, I'm expecting the ES to complete the [E] leg of the triangle, then to finish off wave (v) of [i]. We should see a meaningful retrace at that point, that should be very tradable.

If I'm correct in my assessment, wave [ii] will be a "suckers rally." Wave [ii] completion should provide a very nice shorting opportunity, and a place to get rid of your longs.

As always, please do your own due diligence.

Prices basis December contract unless noted.

How's that Margie :)

Weekend Update - #2

2009-10-31T11:53:00.006-05:00

30 YR BONDS
The bond complex caught a bid late in the week after weakness early on.

Notice how the 30 YR put in a reversal candle (bull engulfment) on Thursday, the same day we had an explosive equity market. Friday followed through to the upside, finding resistance at the 50 sma.

The lower boundary of the channel was broken, which setup a successful test of the 117-18 pivot. The 50% retracement level was in the same area.

It appears that we have a 5 wave structure down off the 123-25 H. If indeed a 5, then we know, at minimum, we will see another 5. I have labeled this leg as a minor degree 1 or part of an X wave.

Bottom line - I expect to see lower price after a retracement process.

All prices basis combined contract.

CRUDE
Strange week in the crude pits. Big reversal Thursday, followed by bigger reversal Friday.

Friday's price action confirmed my suspicion of this corrective being over.

I will keep my interpretation that we finished a minute degree [i] wave at the 81.99 H, though it is an educated guess at this point.

Support is very near with the 20 sma at 76.59. I have also placed the retracement levels on the chart.

I am considering the possibility that minor B has yet to complete, though it is a low probability at this point.

One thing is apparent, the price action off the 81.99 H is corrective - not impulsive. This suggests that we should see new recovery highs in this market once the retracement process is complete.

The dotted vertical lines on the chart are placed at the pivot lows starting with the wave (A) bottom. Notice the fairly nice symmetry between these pivot lows, though not perfect by any means.

Should this symmetry extend out to the next pivot, it appears that we are somewhere around the halfway mark currently.

Prices basis continuous contract.

DOLLAR INDEX
Strong impulsive upside price action for the bucky this past week.

It appears that structure has traced 5 waves up off of the 75.08 L. The question now is - has the dollar bottomed?

Though it's much to early to make that determination, everything is in place for this to be the case.

Notice how RSI tried to break out of the 50% level once again. Will it be successful this time? My guess is that it will, but it may need to pull back again to get a running start.

We are right at the upper boundary of the channel with the 50 sma directly overhead. Both of these are potential resistance.

The 78.085 L is critical support for a bullish case. Should price trade through that level, then obviously, the trend has not changed.

The 77.74 H would be the next logical important pivot that needs to be taken out to the upside.

Throwing the fibs on the impulse wave, assuming it is complete, yields targets of 77.615 (100%) and 78.629 (161.8%).

Bottom line - We should see another 5 wave move up, once the retracement process is finished, if not already. Regardless of whether "the bottom" is in, we should see higher price near-term.

Prices basis combined contract.

GOLD
The gold market turned down this past week, briefly breaking the channel before re-taking it with a big reversal candle.

This price action was unexpected by me. We obviously had no triangle, and hence no thrust. I took a stop on my calls. I only lost $.35 on the them, but I did have a decent amount.

On the chart, I show minute [v] completing at the 1069 H, in a truncated (v)th. This would finish minor C, and thus intermediate (B), if correct.

EWI has this thrust out of the triangle labeled complete, however, they have (v) ending at the high of 1072.

I have my suspicions that [v] is in fact finished. If complete, it is a very unsatisfactory (v) wave in my opinion.

We should know very shortly. If complete, we will start seeing impulsive downside price action.

If the bigger picture view of an expanded flat is correct, the downside objective would ultimately be somewhere around the 700 level, as this is where the price extreme of (A) is.

Should the expected scenario play out over the next several months, it should provide a nice opportunity to get long(er), as an investment.

Key levels to watch for the upcoming week are the Thursday reversal candle low of 1026.90, as well as, the wave (i) price extreme of 1011.10.

I also believe any trade through the 1068.80 H would be a good hint, or clue, that there is unfinished work on the upside.

All prices basis December contract.

Weekend Update - Grains

2009-10-30T23:13:00.006-05:00

CORN
No surprise in corn land this past week, as prices retraced its latest up leg.

My interpretation has this structure currently tracing intermediate (4) of primary [A].

I have to say that I'm a little bit nervous about how this (4) wave is progressing. We have basically retraced the 50% level, which is about the max I like to see for 4th waves.

The problem is that this appears to be a zigzag, and doesn't look at all complete. The price extreme of (1) is 347.60. This doesn't give us much room for error.

Another issue is the lack of alternation with (2). (2) was a deep zigzag, suggesting that (4) would be a shallow complex pattern. This is just a guideline, but I'm bothered by it.

Could it be that this is still part of primary [4], or even worse, the alternate is in play? I think not on both accounts, however, we have to keep an open mind.

It does have a H/S top look to it.

There could be a KoolsTools cycle low on Thursday.

Bottom line - I will maintain my bullish stance on this market unless price trades through the 347.60 price.

Prices basis December contract.

SOYBEANS
The bean market gave us our expected wave (2) retracement this past week.

Nothing has changed in my view of this market. Intermediate wave (2) of primary [C] of a double zigzag cycle b wave. My alternate view is that we may be tracing a triangle for primary [B].

I would really like to see price trade through the 1041.50 level to take the triangle off the table.

I am also hoping that we can maintain channel integrity on this retracement. Notice that we have the base channel in the same area for added support.

I continue to watch the divergent RSI action, as noted in last week's update.

Key levels for the upcoming week are the 1041.50 H and the lower boundary of the channel. The 880.25 L is a critical level that should not be breached to maintain the current interpretation.

Pay attention to Thursday, as it's slated for a KoolsTools cycle low.

All prices basis continuous contract.

WHEAT
The wheat market spent the week retracing its leg up off the October 5 low, which was expected.

I interpret structure to be in the beginning stages of minor C of intermediate (2) of primary [A]. It is possible that price is still tracing minor B, with C to follow.

So far everything seems normal about this retracement process. It appears as though we should have a nice deep correction, which is preferable in my opinion.

My experience is that 3 waves are generally more powerful coming out of a deeper retracement, though far from a hard and fast rule.

The retracement levels are on the chart. Also notice the 50 sma sitting around 482. Generally, when you fail a major moving average, as happened at the 200 sma, you find support at the next major moving average.

It would be nice to get a B wave bounce, then have C complete around this important average. Just a thought.

We are also at the RSI uptrend line from the lows, and conveniently at the 50% level.

Bottom line - It appears that we should have additional work left on this (2) wave. If I'm assessing structure correctly, then we should see hard upside price action once complete.

Prices basis December contract.

The grain markets have really been tuned in to the moons, as of late. We have another moon on Monday. I'm anxious to see what reaction, if any, takes place.

I have a moon calendar on the upper left hand side of the homepage for those of you that follow moons.

Crude

2009-10-29T21:05:00.004-05:00

Nice bullish reversal day in the crude pits. Range was $3.43 on above average volume.

It does not appear that the move off the 77.03 L has finished. We may be tracing a triangle here, which suggests a 4th or B wave.

I show this as a sub-minuette iv wave. Degree's aside, it may in fact be a b wave.

I am not totally sold on this corrective being complete, though odds favor that it is. Structure certainly suggests that we should see some additional follow through from today's price action.

Once we complete the next wave higher, we should get a more meaningful retracement.

Should this corrective need additional time and/or price, which it may, we could see a bigger degree flat or triangle/combo.

A decent consolidation after the nice thrust we had would not be uncommon, nor bearish for that matter.

Then again, this market may be ready to take off again.

FWIW I did put on a contract in case this does turn out to be a triangle. I'm long at 79.95, with my stop at 79.81. I have an order at 80.50 should it get that high.

ES

2009-10-29T18:07:00.003-05:00

The equity markets had a strong rebound day. ES Range was 26.75 handles, while volume contracted. Noticeably lagging was the Naz.

There are a few ways to look at structure, this is one view. There is no reason to bring up the other options I'm looking at until needed (which may be soon).

I have labeled the 1038 L (pit session) as minuette wave (iii), as this makes the most sense at this time. This leaves us tracing (iv) currently.

It appears to me that we have a zigzag type move off the 1038 L. I believe it counts best as a double zigzag, but you could argue for just a single. I DO NOT think it supports an impulse very well, though it's certainly possible.

Where will I know this view is incorrect? Any trade through the 1070.25 level, as this is the price extreme of (i).

Notice that price was stopped precisely at the channel line. This channel is just a guide until the wave (iv) price extreme is in place. At that point, we would connect (ii) and (iv).

One of the issues I have with this interpretation is the lack of alternation in (ii) and (iv) thus far. Remember, that's just a guideline and not a rule, however, I always like to see it.

Perhaps (ii) is in the wrong place. Maybe it finished at the 1088.50 H? This would take care of the alternation concern and leave us with a beautiful in-tact channel.

We will need additional price action to fully understand what's going on. At this point, we are trying to make educated guesses. Sometimes structure gives you enough hints and clues that allow you to have a fairly good idea, while other times your left wondering what exactly the hell is going on.

I'm somewhat satisfied with my view so far. I would like to see price action hold the channel, though not necessary, and trade to the downside tomorrow. It would be nice to take the big gap back, however, a truncated wave (v) would be fine.

ES

2009-10-28T20:07:00.006-05:00

The equity markets experienced hard downside price action. Range on the ES was 25 handles, while volume was very heavy and expanding.

Volume has continued to expand during this sell off, suggesting that distribution has been taking place.

This is what structure looks like intraday. This is the same chart posted in eChat, except I have added the fib relationships.

It is unclear what that mess is in the middle with the question mark. I believe it is probably a triangle and looks much better when not scrunched up. This suggests a B or 4th wave.

The question is what degree - if a 4th. It is possible that it is sub-minuette degree, which means that we are finishing up wave v, and thus minuette (iii). I don't really care for the fib relationship, but it is what it is. We should know shortly.

It is very possible that the degree's should be moved up a notch.

The weekly chart shows the nice rejection price had with the upper channel line. In fact, there were several lines of interest in the same vicinity, though not all are shown.

Notice the action in RSI. It has broken its uptrend line from the March lows. There is also negative divergence in place.

MACD has a cross-over that occurred several weeks back. Notice that it has tried to retake the average, but has failed, resulting in a bearish hook. The histogram has been divergent for months.

The channel off the March lows has been violated. Should price close below this channel, this would be confirming evidence that, at minimum, an intermediate degree correction is at hand - and possibly the end of the bear rally.

Cash has broken and closed below the uptrend channel off the March lows. This is a big deal folks.

I believe this is telling us that this intermediate degree ABC (or WXY) has completed. This means that we are in the process of tracing a (1) down, if that also completed a primary degree [2] wave, thus ending the bear rally.

Should primary [2] need additional work, then we would be tracing an (X) wave instead.

In each case, it portends much lower price. I have placed prices of the pivots that may provide support on the chart.

In my update on October 18th, I stated that I felt a man-sized correction was very near and that it wouldn't surprise me if it was 100 handles or better. Any intermediate degree decline should easily achieve that.

The next major KoolsTools cycle low comes from the 9/23 and 10/21 dates. This should arrive in 16 more trading days. There is also a peak scheduled in 4 trading days.

Edit: I failed to mention what bullish alternatives could possibly be in play. The only viable option that I can see, is that the 1099 H finished a 1st wave of an ending diagonal.

I believe that this is low probability. Any trade through the 1012 (1015 pit session) level invalidates this option. In my opinion, the best bullish case is that we are tracing an (X) wave. Sorry bulltards - now assume the position!

Crude

2009-10-28T19:15:00.002-05:00

Downside price action in the crude pits today. Range was $2.77 with volume on par with yesterday.

We have basically reached the 38.2% retracement level. As I have previous stated, this retrace will really give us a good indication of structure.

If this is a wave 4 of any degree, we probably won't get much past the 38.2% level. Should we have ended a structure at the 81.99 H, again of any degree, we should expect the retracement process to be much deeper than a 38.2%.

It appears to me that we may have traced a H/S topping pattern. If this is the case, it would measure down to around the 61.8% retrace level at 73.81.

Watch price as it retests the broken neckline. A failure here would allow good entry for a short.

RSI has reached a level on this 120 minute chart where we should expect at least some type of bounce.

The dollar continues to make new highs from the move off its 75.085 L. This is worth paying attention to folks.

Crude

2009-10-27T17:46:00.004-05:00

Pretty lackluster day in the crude pits as the corrective continues. Range was $2.08 on expanding volume.

Price has basically retraced back to the 4th of lessor, while not yet getting down to the 38.2% fib level.

Structure continues to look and act like a 4th wave. This would suggest that we see higher price eventually.

There is a chance that this is a bigger triangle pattern. If you assume that the 77.64 L is a, the 81.99 H is b, we would have finished a complex c at the 77.81 L. I rate this as low probability though.

My guess at this point, is that the corrective we have been tracing for the last week is still a work in progress.

The dollar appears to have put in a 5 wave structure to the upside. Be mindful of that.

Edit: I failed to mention in last nights update that I took a stop on my GLD calls. I actually bailed a little early, but still had to take a $.35 loss :(

Crude

2009-10-26T21:15:00.005-05:00

After an initial morning rally, the crude pits turned bearish and there was nice downside price action. Range was a healthy $3.61 on expanding volume.

I wanted to point a couple of things out on the daily front month.

We have broken the up trend line on RSI. If you scan back across the chart, you will notice that in the previous cases where this has occurred, nice healthy corrections followed.

Notice as well, the negative divergence put in on the RSI. Is this telling us that minor C is finished? While certainly possible, I don't believe that's the case.

It appears to me that we would be missing an additional leg higher.

The intraday continuous contract shows the two ways I'm currently viewing structure.

So far, this corrective has the look and feel of a 4th wave. I have two sets of retracement fibs on the chart. The set on the left is measured from the beginning of (i) or [i], while the set on the right is from the wave (ii) or [ii] low.

Notice that the push higher this morning was turned back at the base corrective channel.

As I stated in the weekend update, we really need to see how this retrace plays out to give us a better handle on structure. I will assume a [iv] wave until proven otherwise.

We do have a divergence with today's lows, suggesting that perhaps the move off the 81.58 H needs some retrace.

Did you notice the move in the dollar today? Kind of hard to ignore in my opinion. Watch the 76.85 level. We are also at the 50% level on RSI. Price has been turned back the prior six times RSI has reached this level. Does it finally get through?

Weekend update - #2

2009-10-23T22:51:00.008-05:00

30 YR BONDS
The long bond filled its 10/13 gap, then had downside price action to finish this past week.

Price has again found the lower boundary of the channel. Should the channel give way, price looks destined to test the 117-18 L.

Sure has a Head and Shoulders look to it. If this is the case, then it would target out down around the 114-26 L.

If you look at this market on a wider scale, say since late 2007, it certainly has the appearance of a huge H/S topping pattern. Should this pattern be in play, it suggests much lower price.

Near-term, any trade through the 118-20 L, gives the minimum amount for 5 waves off the 123-25 H.

All prices basis combined contract.

DOLLAR INDEX
Fresh new lows for the bucky this past week - not unexpected.

My interpretation remains the same. Minuette wave (v) of minute [v] of minor 5 of intermediate (C). We inch closer and closer to an important bottom.

Price found support at the 78.6% retracement of the primary [A] leg off the 71.05 L. We are very near the minimum downside objective of 74.79, which is where 5 = 61.8% of 1 - 3.

Notice that RSI supported on its rising trend line, again giving positive divergence. Pay attention to the 50% level (upper trend line) to see whether it can finally break through.

I'm not sure this would signal an end to the downtrend, however, I do believe it would be meaningful.

Bottom line - As mentioned last week, this trend is very mature. It could end at anytime. Any upside price action should be viewed with suspicion, until an impulse has taken place with a channel break.

All prices basis combined contract.

CRUDE OIL
The crude market finished the week with another positive gain.

We finished something at the 81.99 H. I believe it was a minuette wave (v), which would complete a minute degree wave.

I'm entertaining the idea that it just may be a [iii] wave. The retracement will give us a better idea.

The 38.2% retracement level is 77.17, while the 50% sits at 75.68.

The triangle target is 83.99. The continuous contract numbers can change when they put on a new front month, which is why this number is slightly different.

Bottom line - the retracement process does not appear complete to me. Should price trade through the 81.99 H, then it will be obvious that (v) has not finished.

All prices basis continuous contract.

GOLD
The gold market continued its consolidation this past week.

My interpretation of structure has this market tracing a minuette wave (iv) of minute [v] of minor C of intermediate (B). An alternate view is that this is minor 3 of intermediate (3).

I believe structure is winding up for a nice thrust higher.

Drilling down intraday, shows that (iv) appears to be tracing a triangle. In fact, it may be complete, as of Friday's price action.

If so, it measures 28.30, which would give a target of 1078.70. This is right in the area of the B wave triangle target of 1076.80.

Notice the form that wave (ii) took, a sharp zigzag. The guideline of alternation (p. 63-64 Elliott Wave Principle) suggests that we should be looking for a sideways, and perhaps complex corrective for (iv) . Exactly what we got.

It is possible that this structure is not a triangle at all, but some type of combination. The ultimate result should be the same - upside price action.

I put on a moderate line of November 103 GLD calls today when price reacted at the lower boundary line. I will use a GC break of the c leg at 1048 as my stop.

Bottom line - It appears to me that we still have some upside pressure left for price. If I'm right in my assessment of structure, once we conclude our next leg higher, we should see an intermediate degree correction.

All prices basis December contract

Weekend Update - Grains

2009-10-23T19:49:00.004-05:00

CORN
As expected, the corn market enjoyed nice upside price action this past week.

Based on structure, my interpretation is that this market indeed made an important tradable bottom at the 302 L.

I believe structure is in the process of completing minor 5 of intermediate (3) of primary [A]. It is unclear if 5 has finished or not. It may need an additional leg higher, but appears complete to me.

Once 5 finishes, if not already, we should see an intermediate degree corrective.

The 38.2% retracement of (1) sits at 374. This is right in the middle of the 4th of lessor degree.

Notice that we have broken out from the channel, suggesting that the move off the 707 H has indeed completed. Also notice that price blew right through the 200 sma.

The critical level to watch is the price extreme of (1), which is 347.60. Should this retracement trade through that level, then something is obviously wrong.

Bottom line - I am expecting a retracement process for the upcoming week, assuming 5 has finished. Be on the alert for a triangle or some type of complex pattern due to the form that (2) took.

All prices basis December contract.

SOYBEANS
It was upside price action for the soybean market this past week.

My interpretation remains the same. Primary [C] of cycle b of supercycle (a).

It is possible that structure has completed a 5 wave move higher off the 878.75 L. I have this labeled as intermediate (1).

It is also worth mentioning that I have a triangle alternate view. Price needs to take out the 1040 H to invalidate this count.

Should (1) be complete, I have put the retracement levels on the chart. I would like to see price maintain channel integrity on the retrace.

The key levels to watch for the upcoming week are the 1040 H and the 878.75 L.

The minimum upside objective is 1060.25, where [C] = 61.8% of [A]. [C] = [A] 1172.50.

There is a cycle peak due Tuesday.

We do have a slight RSI divergence as well. RSI last peaked at the early August highs. Price has made two successive highs while RSI made lower highs each time. This is something to watch.

Bottom Line - I will assume that all systems are still a go for the preferred count until proven otherwise.

Look for some wave (2) retracement for the upcoming week.

All prices basis continuous contract.

WHEAT
The wheat market, like the other grain markets, saw nice upside price action this past week.

I interpret structure to be in minor 5 of intermediate (1) of primary [A]. It is very possible that we are much further along in this count than I am giving it credit for.

It is unclear, but we may have completed minor 5 on Friday. If so, that would also finish (1).

We tested both the channel and 200 sma this past week, and failed them for the time being.

Friday's action finished very ugly. They put in a nice shooting star candle on heavy volume. Basically, price got to resistance, where it was sold hard. Not a very bullish development.

Bottom line - As stated last week, I need to see a channel break and an impulse higher to get 100% behind a cycle degree bottom. I believe both are forthcoming, however, we have not seen them yet for confirmation.

All prices basis December contract.

Crude

2009-10-22T22:52:00.003-05:00

Consolidation day in the crude pits. Range was a smallish $1.64 on about average volume.

It is unclear to me whether or not wave (v) has completed. Price action off the 81.99 H is certainly corrective, however, it acts like it's some kind of 4th wave.

My guess at this point, we finished (v) and the move down to the 79.90 L was (a). Wave (b) is an expanded flat, which means that (c) down will follow, to finish minute [ii], in what will be a flat.

The problem I have with this view is the RSI action. That is certainly not a wave (v) divergence. In fact, notice that it takes out the high of what I have labeled as wave (iii).

This calls to question whether (v) is done or in progress. Perhaps (iii) finished at the 81.99 H? This would sorta make sense.

Regardless, I feel price is on the verge of a decent retracement process.

Last night I mentioned that the Bradley turn date was today. It is tomorrow. Sorry for the confusion.

Crude

2009-10-21T20:51:00.003-05:00

The crude pits had hard impulsive upside price action for the majority of the day. Range was a robust $4.35 on impressive volume.

If my interpretation of structure is correct, we finished a minuette degree wave (iv) at the 77.64 L. This puts us in (v) of minute [i].

Price has reached the top of the channel, which would suggest that (v) is nearing completion. There is always the chance for "throw-over", as Elliott called it, where price breaks above the upper boundary.

Momentum is certainly slowing down, as evidenced by RSI. It appears that we should have our customary negative divergence on completion of this wave (v).

Once [i] completes, we should witness a more meaningful retracement.

I believe we have a Bradley Model turn date tomorrow.

The poor pitiful dollar made new yearly lows today. It is fast approaching the 73.792 L made last summer.

Crude

2009-10-20T22:32:00.004-05:00

After one hell of a thrust out of a likely triangle, crude took a rest today. Range was $2.08 on slightly better than average volume.

The huge confluence of resistance that was discussed in last nights update was to great, as price was turned back - temporarily in my view.

I am concerned about my degrees, as I noticed that EWI had this counted as sub-minuette degree legs for the triangle. This is two full notches below mine.

You may or may not remember, but I had already ratcheted down my degrees about 5 months ago. I am having a hard time believing that the crash move off the highs in 2008 only registers as a minute degree. Leaving my degrees alone for the time being.

I have attempted to count this leg off the 68.32 L. It's not easy when the waves just keep subdividing.

In all honesty, it really doesn't matter. As long as you can discern where the larger degrees are you should be in good shape.

I am showing that we ended a minuette degree (iii) wave at the 80.40 H. It is possible that it may very well be a minute degree.

I have placed the retracement levels on the chart.

We had a beautiful Bullish Bat pattern that came in nicely at today's lows.

I show this on my 144T chart, which is the chart I use for entry's in this market.

I was lucky enough to get long 78.38. I took the 1st contract off at 78.55 and then foolishly moved my stop to 78.46.

I was assuming that the candle with the 78.48 H was a wave 1, so I moved my stop 2 ticks below it. I guess not, as they printed 78.45, stopping me.

There was another monster trade I would have had and the same thing happened to me. Crude traded very badly today in my opinion. Sigh.

Bottom line - if my interpretation of structure is correct, we should see a wave (iv) corrective, then more push. Although this may turn out to be a normal 4 wave (slow grinding back and forth), I suspect it will be short lived and brief.

Crude

2009-10-19T21:49:00.004-05:00

More upside price action in the crude pits. Range was $1.60 on below average volume.

I show the daily chart again, as it gives a better view of the overhead resistance that price is starting to encounter.

There are several fib relationships, which not all are shown, right in this area. Also, we have the upper boundary of the channel, as well as, the median line of a fork.

The waves continue to subdivide, which shows very well on any intraday chart. It appears that we spent the majority of the day in a 4th wave triangle, before "thrusting" out of it.

My guess is that was a minuette degree (iv) of minute [iii], though I can't be certain. It is also possible that the degrees should be moved down.

Regardless, it suggests price has more room to run.

The new front month for crude is now December.

Edit: Anybody notice how the grains lit up again today with the moon. Coincidence? Not sure, however, structure was suggesting higher price. I have no personal statistical data to either refute or claim correlation.

Weekend Update - ES

2009-10-18T23:54:00.005-05:00

ES
Another push higher in the equity markets this past week, however, Friday put in a bearish engulfment candle.

It's still unclear to me as to what the bigger picture structure is tracing. There are multiple options that may be going on here.

I show a count that I'm reasonably satisfied with off the 1015 L (pit session) on the intraday 15 minute chart. This interpretation has a minute degree [iii] wave completing at the 1093.25 H.

If correct, we would be tracing [iv] currently with [v] up to follow. What this minute structure would finish of a larger degree is up for debate.

I don't think you can dismiss the alternate view of a double zigzag, or abc-x-abc. This would suggest an expanded flat scenario, or possibly a running triangle.

Regardless of what this leg turns out to be, RSI has been registering negative divergence. It warned all week that price was setting up for, at minimum, a temporary retrace.

I wanted to show the monthly chart again. Notice that price ran into the channel from the 2007 H.

We actually penetrated it slightly, before being turned away and closing below it. It should be noted, on a log scale, the channel won't come into play until somewhere around the 1125-1130 area it appears.

One thing that should stand out, is where the 200 sma is currently located - right on top of the 50% retracement level.

The short-term stochastics is pegged out and RSI has run into the 50% level. Several confluences here suggesting a break from the upside price action may be near at hand.

I periodically show this OEX weekly line close chart that I pay attention to.

I have had the fibonacci time extensions on for several months now, however, I had never put the retracement levels on.

Perhaps we get to the 50% retracement level about the same time as the 50% time extension, which is November 13. Then again, maybe we never make it to either one.

Bottom line - near-term appears to need another leg higher, assuming the alternate count is not at play.

I feel a very tradable man-sized correction coming very soon. Would not be surprised to see a 100 handles (or more) given back. Not sure it would be the end of the bear rally - though it certainly could be.

Stay on your toes.

Weekend Update - #2

2009-10-17T12:46:00.010-05:00

30 YR BONDS
The bond market sold down after a failed test of the 200 sma, with Monday being the big down day.

Bigger picture structure remains unclear. I show a potential intermediate (X) wave in place at the 123-25 H.

Price has reached the lower boundary of the channel. A bounce of some type should not be unexpected.

Key levels to watch for the upcoming week are the 123-25 H and the 117-18 L. Should that 117-18 L give way, I suspect that the 114-26 L will be reached in short order.

The retracement levels from the corrective off the 111-24 L are on the chart.

All prices basis combined contract.

DOLLAR INDEX
The worlds largest supply of toilet paper saw decent downside price action this past week.

I interpret structure to be in minuette (v) of minute [v] of minor 5 of intermediate (C) of primary [B]. A lot of ending 5's are very near folks.

Notice how the 50 sma has held price in check since July.

Noteworthy as well, look at the RSI action since it registered its low in early June. It has consistently been turned back down from the 50% level. In fact, this has happened 6 different times.

There is big positive divergence, forewarning that a change of trend may soon be at hand.

The DSI readings continue to point to a one way trade here. As has been mentioned in these posts numerous times, this can not go on indefinitely.

5 = 61.8% of 1 - 3 at 74.79. This is the minimum downside objective that would be expected to be reached.

Bottom line - This trend is very mature at this point in time. Be aware that it could end at anytime. As always, an impulse off a low with a channel break will give confirming evidence.

Price basis combined contract.

Crude
Hard upside price action in the crude pits this past week.

It is unclear whether crude broke free from a minor B wave triangle or not, as I show on the chart.

Price action certainly resembles a "thrust" that would be expected.

If a triangle, it measures to 84.33.

There is also the possibility that this is part of a combination corrective, and perhaps a combo that is not finished. That has yet to be determined.

Bottom line - price action does not appear finished in this move higher, however, it should be close to needing a retracement.

I am anticipating any retrace to be shallow and short lived.

I am a little bummed out that this didn't setup properly, which would have allowed me to put together a decent long line via calls :( This however, is how the market operates.

Price basis continuous contract.

GOLD
The gold market set another new all-time high this past week, printing 1072.

My interpretation of structure has this market in minuette (iv) of minute [v] of minor C of intermediate (C). The alternate view is a very bullish minor 3 of intermediate (3).

As pointed out in Thursday's post, it is unclear which peak (iii) finished at, 1062.50 or 1072.

Once (iv) completes, we should see another leg higher that would complete [v], and thus C.

If this assessment is correct, then the bulk of gains have already occurred. Of course, there is always the possibility that (v) could extend.

Bottom line - we should see another push higher before a meaningful correction.

Price basis December contract.

Weekend Update - Grains

2009-10-16T19:40:00.010-05:00

CORN
The corn market broke through prior 4th wave resistance with impulsive price action.

As per my update earlier in the week, it appears that a primary degree structure completed at the 302 L. This suggests that cycle wave c has finished, and thus supercycle (a) .

My interpretation has structure in minor wave 4 of intermediate (3) of primary [A] of cycle a of supercycle (b). A mouthful for sure. If correct, this suggests that a tradable bottom is in place for this market.

My alternate view is that the 302 L only finished primary [1] of c down. This would be a very bearish count for the corn market, should it be correct.

Since (a) down took the form of an abc , or a 3 wave structure, this leaves open the possibility of (b) being a flat, triangle, or zigzag.

Price ran into some important levels this week that acted as resistance. Notice that it also ran into the channel. It is no surprise that price was unsuccessful in its bid to move higher.

The channel will be one of the signals I need to fully back my current assessment, as well as a completed impulse.

Bottom line - The evidence is strongly suggesting that an important development has taken place at the 302 L. I will assume this to be the case, until proven otherwise.

Near-term should see upside price action after completion of this minor 4 wave. The 200 sma is directly overhead, chances are good that it will act as resistance.

All prices basis December contract.

SOYBEANS
The bean market spent the majority of the week consolidating/retracing.

Nothing has changed in my assessment of this market. Primary [C] of cycle b of supercycle (a) is where I show current structure. I still think that a triangle could actually be playing out.

Perhaps this is a big b wave combination. The 974.25 H, where I have [C], could be [W]. The 746.25 L could be the (A) leg of an [X] wave triangle, with the 1040 H as (B).

I have just never been satisfied with the 5 wave structure that completes [A] . Then trying to marry the front month and combined contracts with the continuous makes me think something other than a double zigzag is tracing.

Of course they could make it easy on me and just blow out the 1040 H, thereby, confirming my preferred count.

Targets remain the same, [C] = [A] at 1172.50. [C] = 61.8% of [A] at 1060.25, our minimum upside objective.

I don't see any decent cycle days for the upcoming week

Bottom line - I still anticipate higher price. It appears that we finished a minor degree 3 wave on Tuesday and look to be tracing 4. After completion, price should begin working higher.

All prices basis continuous contract.

WHEAT
The wheat market broke above 4th wave of lessor degree resistance in impulsive fashion.

I stated last week that I may be behind in the count. It appears that is indeed the case. The necessary structure is in place to say that 5 waves off the 725.25 H have completed at the 439.25 L.

My current interpretation has structure completing primary [5] of cycle V of supercycle (a) . Should this view be correct, a tradable bottom is in place.

With a 5 wave move from the early 2008 H, we can expect (b) to take the form of a zigzag. B wave zigzags generally retrace between 38.2% and 78.6% of the prior move. This is shown with the cyan tinted box.

RSI has really been warning that something was up. The positive divergence, which also shows up well on the weekly, was too great to ignore. Although I have discussed it for several weeks, I really dropped the ball on this one.

Drilling down intraday shows how I'm looking at this leg higher.

It is possible that the 529 H finished an impulse, however, I believe it counts best with a minor wave 3 completion up there.

483 becomes important with this view. This is the price extreme of 1, which should not be traded through.

It appears that the minute [c] leg (not shown) of this wave 4 corrective needs one more leg down to complete.

Bottom line - I do believe that something important has taken place in this market. Before I can get 100% behind it, I need to see an initial impulse wave. That is 3 sets of 5 waves.

Based on my count (which could be wrong) I see just 2 sets so far. I also need to see a 2-4 channel break, thereby, confirming a new primary trend.

It's always nice to see markets move into their next phase.

All prices basis December contract.

Edit: We have a new moon on Sunday the 18th. The last moon on the 4th, set the grains off. Lets see what happens.

Crude

2009-10-15T22:21:00.003-05:00

There was an upside explosion in the crude pits today. Range was a nice $3.18 on above average volume.

I'm not entirely sure whether we came out of a triangle or not. It really doesn't matter, and we wont really know until down the road.

What does matter is price action has been impulsive off the 68.88 L. We either ended [e] or likely [2] there.

I'm still expecting price to reach the 79.42 target area. I would like to think that we could accomplish that in short order, but nothing goes straight up. We are due a retrace.

If minor B is indeed complete, the minimum upside objective is 83.54. This is where C = 61.8% of A. C = A around 100.

We also have the 38.2% retracement of the all-time high in the same area.

Prices basis November contract.

I read a headline from our idiot financial media that said "the stock market was helped by the strength in oil." Since when is $78 crude oil a good thing? Did anybody notice RBOB? I saw where it was up over 5% at one point.

So this is a good thing that should be cheered I guess. The tranny's don't seem to mind either. Crude is up about 70% since February. Seems pretty good unless your comparing it to the tranny's - up almost 90% since March. Whatever.

If I'm right on structure, then the tranny's have much higher to go, because structure suggests crude isn't finished.

How about that trade I put on last night :)

Gold

2009-10-15T21:27:00.003-05:00

Checking in on the gold 60 minute continuous contract.

This market made news highs on Monday and Tuesday, reaching 1072, before starting to correct. This is very close to the 1076.80 triangle target.

It's unclear exactly where this minuette degree (iii) wave finished. I have the 1072 H shown on the chart, however, it may very well have ended at the 1062.50 H. This is the alternate count at the bottom.

This would entail an expanded flat for (iv). The leg I have labeled as sub-minuette v is a mess. It counts much better as a corrective.

I wouldn't be surprised if (iv) turns into something more complex, as it has that look like it needs additional time and/or price.

We have had huge negative RSI readings with each successive peak since the 1045 area.

The 200 sma supported this corrective thus far. If price gets through the 20 sma, I would expect the 50 sma to repel price back to the 20 sma, before it can make another attack on the 50 sma. Basic major moving average stuff.

If this interpretation is correct, then we should have an additional leg higher to complete minute [v], and thus minor C.

As I have stated in previous posts, I may be ahead in the count. It's possible that we would only complete minute [iii]. That is one of my alternate views, with another being that this witch is going lots higher.

1011 is the price extreme of (i). Should this level be traded through, then obviously something is wrong.

Crude

2009-10-14T22:19:00.006-05:00

Fairly lackluster day in the crude pits. Range was a very small $1.13, while volume was slightly below average.

Guess they were waiting for globex to ramp it up.

Well folks, we have slightly taken out the 75.89 price extreme of [b]. This is very disappointing indeed.

As I stated in previous posts, price should not have traded through wave [b] in order for this to be a triangle.

You do have to give some leeway with futures, but the continuous contract has really busted through. More than what I would consider acceptable.

Is it somehow possible that we completed both the [d] and [e] legs? The continuous contract suggests that is indeed possible.

The front month counts a little different, however, you could move [b] over just like the continuous contract.

This produces a perfect hit on the trend line. Perhaps this is the correct way of looking at it, then again, maybe I'm trying to force structure to fit my interpretation. I'm not sure folks.

Three months of scratching out 3's, pulling my hair out trying to figure out what the hell structure was doing, and this is what it gives us. Unbelievable.

Edit: FWIW I sold 75.93. I'm using a 76.03 stop with a target of 75.43. Prolly silly trade, but I can live with the results. Risking $200 for $1,000. Wish me luck.

Corn

2009-10-14T16:48:00.004-05:00

The corn market, like the rest of the grains, has been ripping higher lately.

Though it's too early to call a major bottom in this market, it has certainly put in a tradable bottom.

I show a primary degree [5] wave ending at the 302 L. This would also complete a cycle degree c wave. The alternate remains a very bearish view.

It's unclear if minor 3 has finished, but the structure does suggest that it is close.

Notice that we have hit some important levels. The 50% retracement of the move off the 473.20 H, as well as some key fibonacci relationships.

The 38.2% retracement of 3 sits at 365.20. Watch the base channel boundary line, as this often provides support for wave 4's.

If I have structure pegged correctly, we should see additional upside price action after a retracement process.

ES

2009-10-13T20:32:00.004-05:00

ES ended its winning streak today. Range was 11.25 handles on expanding volume.

Here is one way to view structure. It's likely incorrect, but wtf.

We printed 1081.50 in globex on a big gap up. So, it appears that (v) did not end at the 1076.25 H (pit session).

Notice the box, which is showing perhaps the best 5 wave structure on the whole chart. Beautiful alternation with the 2 and 4 waves. But these days 5's are 3's and 3's are 5's.

Who knows, maybe by pit open they have price back under the wave 1 price extreme. Not counting on it though.

I have really lost interest in this market over the last few months. I will likely stop updating it on an everyday basis.

Crude

2009-10-13T19:54:00.004-05:00

Another upside day in the crude pits. Range was $1.72 on above average volume.

This is one way of looking at the minute [d] leg structure. It's not without issues, but certainly works without breaking rules.

My big concern, which I'm sure is obvious, is the sub-minuette iv wave. It really has no proportionality with ii. It looks like it should be a smaller degree.

There are different ways of counting this that would take care of that issue, however, they lead to additional problems.

I'm starting to get nervous here. The 75.89 H (75.41 continuous) is the price extreme of minute [b]. We have printed 74.96 in globex. Should price trade through that level by any meaningful amount, then this structure is NOT a triangle.

In fact, it really shouldn't trade through that level at all, but the futures markets don't always play by the rules.

If not a triangle, then price is tracing some devious type of combination for minor B that I have yet to identify.

Hopefully the mid-line of the channel will keep price in check.

We do have nice RSI divergence that suggests that a 5th wave of some degree is nearing an end.

Once we get a completion of [d], we will be able to put retracement levels on to give us an indication of where [e] may end.

Edit: I notice where EWI finally called a contracting triangle in this market :)

ES

2009-10-12T20:05:00.005-05:00

The equity markets had a sleepy day of trade. ES finished higher for its 6th straight session. Range was a pathetic 9.75 handles on what I show to be the lowest volume day of the year.

Structure still has not shown its hand for the bigger picture view. It continues to be a guessing game at this point.

Obviously, one of the legs off the 1015 L (pit session) has extended. I believe it is the 5th, as shown on the chart, however, you could make a case it was the 3rd.

I originally had a triangle in the (iv) wave, and it's still possible that it did. If so, then the sub-minuette degree waves would need to be moved up right. This would argue for one more leg higher.

Regardless, I have not placed a minute degree label at 1076.75 H, if structure is even complete up there. We will need to see what kind of price action takes place off that high.

We finally closed a gap - HOORAY!

I suspect that regardless of what specific structure we find ourselves in, the other's will be taken care of shortly.

Notice where price was rejected. This is the big corrective base channel drawn off the 971.25 L.

I also show a bearish count as an alternate. 7 waves up certainly suggest a double zigzag. This would mean that structure is tracing either a expanded flat or a triangle.

Who knows, I'm content to sit back and watch things unfold, as this is not my main trading market. I am still short via a handful of SPY puts, but nothing I will lose sleep over if I have to eat them.

I will keep looking for select spots to sell this pig, as I wouldn't dare consider being long - unless intraday. In my opinion, the math doesn't work on the long side here. You bulltards are welcome to all the upside this pig wants to give you.

Sorry for the lack of a weekend update. It was unavoidable.

Crude

2009-10-12T17:31:00.004-05:00

A slow day in the crude pits, as we spent the majority of the day correcting. Range was a smallish $1.79 on contracting volume.

Big picture first. The triangle form continues to take shape.

If this is a correct interpretation, we are working on the minute [d] leg. After completion, we should see an [e] leg down that would finish the triangle.

The upper boundary line is simply a guess based on the two peaks. It may end higher or lower than what is shown, though it would be a convenient turning spot.

The 79.39 target is the minimum level this will measure, which is based on wave [c] low of 65.05. There is a high probability that [e] will finish higher than that low. We will need to take the measurement from wave [e] low when that occurs.

Looky where price topped today - right at the mid-channel line.

Drilling down intraday shows how I'm looking at the subdivisions.

It's unclear if we have finished minuette (c), and thus [d], or not. During trade today, I originally thought we needed another leg higher.

After more study, I'm not so sure. Regardless, it does appear close to being a complete structure, if not already.

Notice how the reciprocals .786 and 1.272 worked together. That's not an accident - I can assure you.

RSI suggests that we ended some degree of 5th at the 73.84 H. I'm hoping for a tad higher myself. (c) = (a) at 74.39, a nice target indeed.

Prices are basis November contract.

Weekend Update #2

2009-10-10T12:16:00.005-05:00

30 YR BONDS
The bond market reversed late in the week on increasing volume.

Price rejected off the 200 sma before finding support at the 50 sma.

It is unclear to me if the move off the 114-26 L should be counted as a 5 or 3. It sure looks like a nice zigzag to me.

If it's a 5, like I show on the chart, there is 4-1 overlap.

My best guess at this point is that price is tracing an intermediate (X) wave. It may or may not have completed at the 123-25 H.

All prices basis combined contract.

CRUDE
The crude market continued higher this past week as expected.

My interpretation of the crude structure remains the same. I have price tracing minuette (c) of minute [d] in a minor B triangle of intermediate (B). My alternate view is that this is a minute [iv] triangle.

Price ran into the upper boundary of the corrective channel and was initially repelled, but finished Friday's trade closing above it. This also closes price above the daily 50 sma.

I show minuette (a) completing at the 71.39 H, however, it is possible that it actually finished at the 71.97 H.

In Thursday's update I mentioned some reservations I had with this [d] leg structure (read that post for specifics). Triangle legs can be difficult to discern, and generally are.

I'm not real concerned with exactly how the internal structure traces out. Just be aware that this wave could end at any time.

Should price trade through the 75.89 H or the 61.38 L, this would invalidate the triangle view

We are scheduled for a nice KoolsTools cycle peak on Friday. The last 3 L-L's have actually given the next low.

Bottom line - I still expect price to make its way higher, finishing off this leg.

All prices basis November contract unless noted.

DOLLAR INDEX
The greenback made fresh lows on the week, maintaining its leading role as the worlds largest supply of toilet paper.

My interpretation has structure completing minute [iii] of minor 5 of intermediate (C) of primary [B] at the 75.68 L. My alternate view is that low finished minute [v], thus primary [B].

Should [iii] be complete, then we should be in the beginning stages of [iv]. Any trade through the 77.795 L, the price extreme of [i], will suggest that perhaps it was wave [v] that finished at the 75.68 L.

The move off that low certainly appears corrective in nature.

Bottom line - I maintain my near-term bearish stance. If my assessment is correct, we are getting closer to a turning point, however, were not quite there yet.

All prices basis continuous contract.

GOLD
The gold market shot higher this past week on heavy volume reaching all-time highs.

My interpretation has structure in minute [v] of minor C of intermediate (B). This is actually a bearish view. The bullish alternate view has structure in minor 3 of intermediate (3) up to god knows how high.

Notice how we went from one side of the channel to the other, finding resistance on the upper boundary and previous high print. There were also plenty of fibo relationships there as well, almost assuring us of at least a pause.

It appears that minuette (iii) completed at the 1062.70 record high. If correct, we should currently be tracing (iv). I have placed wave (iii) retracement levels on the chart.

(ii) was a sharp zigzag, therefore, suggesting that (iv) should be relatively flat and possibly complex.

I mentioned last week that I thought price may not be able to reach its triangle target of 1076.80, which by the way, is right in the area of where [v] = [i] - [iii] Obviously, based on price action thus far, it could easily attain that level - should that be in the cards.

If (iv) has traced its low, which is doubtful, then (v) = 61.8% of (i) - (iii) at 1092.30. The 426.6% projection of (i) sits at 1092.80.

Should this retrace get out of hand, the price extreme of (i) = 1011. The line in the sand level.

There was a H-H cycle that came in on Friday based on the 6/3 and 8/6 dates. This suggests that we should see some downside pressure, fitting right in with structure.

Bottom line - I expect to see an additional push higher once this retrace is complete.

All prices basis December contract.

Weekend Update - Grains

2009-10-09T22:23:00.005-05:00

CORN
The corn market had strong upside price action this past week.

This week I'm showing the December contract instead of the usual continuous contract.

I'm not quite sure what's going on in this market. As strange as this sounds, I believe the 302 L (both contracts) either completed an important bottom, or we are in the early stages of much lower price.

I can make arguments both for and against each scenario. It does appear that we finished a 5 wave structure down off the 474.60 H (465.50 continuous).

Even though I show the bullish case on the chart, I favor the alternate. It's hard to imagine c being that small compared to a - not even getting to the 61.8% of a.

Then again, the technicals are telling me that price appears to want higher. Notice the monster positive RSI divergence that has developed over the last few months.

Also noteworthy, is the massive upside volume registered in this market since mid September.

I have discussed a [4] wave potential triangle in previous updates. The proportion with [1] is just to extreme in my opinion. It should be noted, however, that price has not exceeded the wave [4] H, as of yet.

They were nice enough to leave us hanging, as Friday's trade fell a few ticks shy on December, while the continuous had a perfect double top at 373.

Critical levels for the upcoming week are the wave [4] price extreme at the 376 H (373 continuous) and the 302 L.

Bottom Line - I'm unsure at this point what precisely structure is telling us. I can tell you that I need to see an impulse that takes out the channel before I can get behind a cycle degree bottom.

All prices basis December contract unless noted.

SOYBEANS
The bean market enjoyed nice upside price action this past week.

My interpretation of structure has beans completing primary [B] of a double zigzag of cycle wave c. My alternate view is that primary [C] finished at the 1040 H and we have started cycle c down.

This structure reminds me of where the crude market was a few weeks ago. A [B] wave triangle is certainly possible and is a 2nd alternate.

If [B] is indeed finished, we should see 5 intermediate degree waves up that would finish [C], thus completing the double zigzag and cycle b.

Targets include [C] = [A] at 1172.50, while [C] = 61.8% of [A] at 1060.25, which is the minimum upside objective. The 78.6% retracement of a is at 1146.25.

Notice how the channel provided support and turned price higher.

I see no cycles of importance for the upcoming week ahead.

All prices basis continuous contract.

WHEAT
Like the rest of the grains, the wheat market had a big upside week. It actually had 4 consecutive winning days in a row. This hasn't taken place since May.

My interpretation of structure has wheat completing minor 5 of intermediate (3) of primary [5] of cycle v at the 439.25 L. My alternate view is that primary wave [3] is still in process.

It is very possible that I'm behind in the count and this market in fact finished primary [5] at the 439.25 L.

One of my concerns is the fact that RSI has been big time divergent over the last several weeks (not shown on chart), which I have discussed in previous updates.

RSI actually registered its low on July 7. September 9th saw RSI make a higher low and has been trending higher since, while price continued to set multi-year lows.

Price tried to break out of the channel on Thursday, but was quickly rejected.

Also troubling, is the size of the retrace thus far. It came close to the 61.8% level, which would be considered "deep" for a 4th wave. Minor 5 was small in size, though it appears to have a clean structure.

486 is the line in the sand, as this is the price extreme of (1). Should price trade through that level, the structure will need to be reassessed.

Thursday's H-H cycle produced another H instead of the expected L.

The Sunday moon did wonders for the grain markets as a whole.

Bottom line - If my current count is correct, we should have 1 more leg lower that would put in an important bottom in this market. If by chance we have seen that low, price action will begin impulsing higher.

All prices basis continuous contract.

ES

2009-10-08T18:54:00.003-05:00

ES closed its 4th consecutive upside day. Range was 14 handles on below average volume.

Anybody else notice how volume has been considerably less on this leg up than last weeks big sell days?

It appears that we have completed a 5 wave structure up (nice RSI divergence). What this actually finishes is up for debate. I show a minute degree [i] wave, however, there are several other alternatives that make just as much sense.

It looks like we have a 5 wave move off the 1067.25 H. At minimum, we should see another 5 waves.

The same can be said of this move off the 1015 L (pit session), unless of course, somehow it is married to something from the left side of the chart.

Perhaps the leg off the 1075.75 H ended at the 1041 L for wave (i) down, and we then have been in a big expanding flat with (c) ending at today's 1067.25 H to finish (ii) up? This would entail starting (iii) of [i] down.

Folks, there is very little chance of this being correct structure. A pipe dream if you will.

If we did in fact end a 5 wave structure higher today, we should see a decent retrace. There are some gaps that WILL be filled sooner or later. A normal 61.8% retracement would take care of both of the 10/6 and 10/8 gaps.

We are slated for a KoolsTools cycle peak tomorrow. This comes from the 9/28 and 10/2 lows.

Time for kickoff. Predicted final score: Black & Gold 98 cornhuskers 0. Yes, I am wearing my 20 year old t-shirt that says "HUCK THE FUSKERS!" :)

Crude

2009-10-08T15:59:00.004-05:00

Huge day in the crude pits today as expected. Range was $3.38 on big volume.

We had a nice easy wave structure to count today. Today was all about getting long and staying long.

It appears that we are tracing a micro wave [4] of [5] of sub-minuette iii. If this is correct, we should see an additional push higher to complete this leg.

It's unclear if [4] has completed, but it is very close. Notice that we have retraced back to the lessor of 4th degree. I would expect this corrective to remain fairly shallow.

Price traced a beautiful little triangle for sub-micro (4). A nice "marker" for where we were in the structure. Notice how the base channel supported price. Should have been an easy trade setup for those of you that trade this market.

I was fortunate enough to get long 71.35 on the e leg. Needless to say, VO got fat today :)

I do have some reservations of where I have structure pegged.

For starters, i seems awful big compared to the rest of the structure. Also, iii is one leg away from completing. Unless [5] really gets it's dancing shoes on, then there isn't going to be a lot of room for iv to trace without moving into i territory.

It is possible that (a) actually finished at the 71.97 H. This poses its own problems. (c) needs to finish below the 75.89 H in order for the triangle to be valid.

I will maintain my current count until structure dictates otherwise.

Bottom line - I expect price to follow up this corrective with another leg higher. Should price trade through the 70.58 level, then something else is going on.

Crude

2009-10-07T20:23:00.003-05:00

It was a retracement day in the crude pits. Range was $2.88 and volume expanded.

I sure didn't expect crude to basically spend the whole day retracing the previous wave. I really thought they would make quick work of it.

It appears that structure may have finished this leg down, which I have as a sub-minuette ii wave. During trade today I thought we needed another leg down - I guess not.

Nice hit at the 78.6% retracement level. This is more indicative of a 2nd wave, as discussed last night. We also held the channel after briefly breaking underneath it.

IF this is a ii wave AND it finished at the 68.88 L, then we should see nice impulsive upside price action tomorrow.

iii = i at 72.80. iii = 161.8% of i at 75.23. (c) = (a) at 74.38.

ES

2009-10-07T19:22:00.006-05:00

ES finished positive on the day with a late push. Range was a pathetic 9.50 handles, while volume contracted.

Slow and choppy. The results of an apparent triangle that took all day to trace. It appears that we started the "thrust" towards EOD.

Yes, that's right! There is a potential 467.38912 different scenarios that could be in play here. If I stare at the charts long enough, I'm sure I can come up with a few more.

The only bearish count would be the (i) of [iii] scenario. This will be eliminated with trade through the 1065.75 H, which should happen fairly soon (like tomorrow).

The rest of the scenarios will need additional price structure before we can confidently narrow the list down.

It appears that we have a 5 wave structure off the 1015 L (pit session). I have moved up the degrees by one, as I think this makes more sense.

The minimum upside objective = 1068.50 (pit session). This is where (v) = 61.8% of (i) - (iii).

The 250 range chart shows the wave (iv) triangle.

I was fortunate enough to get long e at 1048.75. I was also stoopid enough to get stopped at 1050.25. UGH!

We should have our customary 5th wave RSI divergence, denoted by the black box.

I fully expect yesterdays big gap to get filled during the following retrace.

Bottom line - structure should show its hand soon enough. Be patient.

Time to go root the redbirds on! Predicted final: redbirds 87 dodger blue 0, Carpenter throws no-hitter and Pujols goes yard 13x's.

ES

2009-10-06T20:23:00.005-05:00

ES had follow through to the upside today on with a big gap up. Range was 21.25 handles, while volume was just average

In all likelihood, the scenario that would have had minor C completing at the 1075.75 H is dead. It is still possible that we have traced a couple of 1's and 2's, but at this stage it's not very realistic based on structure.

So what's going on then? I have about 5 different scenarios that make or could make sense, but it is all speculation at this point.

We had a 5 wave structure off the 971 L followed by a corrective 3. This was then followed by another 5 waves off the 986.50 L to the 1075.75 H, before our clear 3 wave corrective down to 1012.

Off the 1012 L, it is unclear if we have had 5 or 3 waves. My guess is we have only seen 3 thus far. The apparent wave 1 is a mess. Leading diagonal? Who knows - who cares. It will clear up soon enough.

There is still a better than average chance that we are tracing an intermediate degree corrective. A flat or triangle could play out off the 3 wave move down to 1012.

I show a bullish count of a minuette degree (i). It is possible that this will turn out to be an (a) wave of a triangle or flat.

I'm not going to go through all the details of each possibility, as I have already spent too much time tonight on this pos market.

We need to see further price action to see exactly what structure is up to.

Nice rejection off the broken channel. Made for a nice short setup. I averaged in some SPY puts (had 107's from yesterday and 108's today) up there.

I unloaded the 108's and 1/2 my 107's for a smallish profit. I could have been completely done at break-even. Oh well, I just have a handful left.

In my opinion, todays gap has little chance of NOT being filled within the next couple of days. Who knows, maybe it happens tomorrow as today was suppose to be a KoolsTools cycle peak day.

Crude

2009-10-06T19:45:00.003-05:00

Crude finished higher on the session on above average volume. Range came in at "a no big deal" $1.91.

As expected, price moved up out of the corrective. We ran into the down trending channel and were quickly repelled, which is very common.

I have changed the labeling and placed sub-minuette i at today's high of 71.97.

It is also possible that i actually ended at the 71.63 H. It is unclear, as the leg off of the 70.06 is a mess.

I have placed two separate ii waves on the chart. I prefer the second lower ii myself. This means that ii needs additional work. Although 2nd waves can certainly only retrace a 38.2%, it's not very common.

There is a very remote possibility that 71.97 completed minuette (c), and thus minute [d]. As triangles start contracting, the waves get smaller and can fool you. It's possible, just not likely imo.

Bottom line - I continue to see price moving higher. If I have structure correctly assessed, then we should see nice upside price action tomorrow, as we would be in a wave iii.

Any trade below 68.05 would mean something else is going on.

ES

2009-10-05T21:45:00.003-05:00

The equity markets had an expected rebound day today. Range was 19 handles on well below average volume.

What was not expected was how deep this retrace has gone. This calls into question whether this is an impulse or nothing more than a corrective.

Structure has been crap so far. This doesn't rule out a impulsive structure down at all. It just makes it questionable. It looks like a beautiful ABC to me.

I have put an alternate count at the bottom of the chart. It will remain my alternate until price action dictates it needs to have preferred status.

Before the bulltards get to excited, the move up from the 1015 L (pit session) is clearly corrective with choppy overlapping waves. It appears to be a double zigzag.

If this is correct, then the 1015 L will be taken out, regardless of what form the waves ultimately take.

We need to see additional price action to determine if this is nothing more than a corrective, or just an awful impulsive structure.

Tomorrow is cycle peak day.

Crude

2009-10-05T20:29:00.004-05:00

Explosive upside day in the crude pits. Range was $2.95 on above average volume.

It appears that minuette (b) is now finished. If correct, we should see 5 sub-minuette waves up to complete (c).

The attached chart is a 5 minute look at the up move today. This is one way of interpreting structure.

I show sub-minuette i completing at the 71 H. It almost feels like this is a wave [4] instead of ii. Tomorrow should give us additional clarity.

Regardless, I believe the ultimate destination is higher.

Here is the daily view of the triangle unfolding.

Notice that (c) = (a) at 74.37. This is very close to the trend line, which is a convenient place for this leg to end.

I'm expecting this little corrective to finish up in short order. We should see continued upside price action once complete.

Weekend Update - ES

2009-10-03T15:38:00.008-05:00

ES
After a nice upside day on Monday, it was all downhill the rest of the week, with Thursday being particularly nasty.

The ES has now given up over 50 handles from its 9/23 high of 1075.75.

It is obvious to me that the equity market(s) topped at the ES 1075.75 H. At minimum we should see an intermediate degree correction. At worst - turn out the lights 'cause this party is over.

My interpretation of structure has the 1075.75 H completing minute [v] of minor C of intermediate (Y). I will assume that primary [2] of [5] of cycle c was finished as well, until proven otherwise.

If correct, this suggests that the March lows should be taken out in this primary wave [3] down. Actually, it is required for 3rd waves to travel beyond 1st waves, as a rule of formation.

There is a possibility that we trace an intermediate degree (X) wave before going even higher, as shown on the monthly chart.

This is a 15 minute pit session chart.

This is my current view of structure of the decline so far. If correct, we are tracing a sub-minuette degree iv wave of minuette (iii). Once complete, we should see v down that will finish (iii).

I have seen some counts out there that show minuette (i) ending at the 1041 L. It is certainly possible, but I don't share that view.

The problem rests with what to do with that clear 5 waves up to the 1065.75 H. My interpretation has structure forming a zigzag with a failure c leg.

The highlighted area represents the 9/7 gap, which should fill in short order and actually has on the 24 hour chart.

This is a Bullish Bat pattern that setup late Friday. It reached its 1st target at market close.

It's possible we see higher price when globex opens if we are still under the influence of this pattern.

I don't like the fact that price ticked through the 88.6%, but 2nd target is up at 1025.50

The daily 3 bar projection sits at 972.25. Notice that the 161.8% was at 1012. Should we break that level, and I'm fairly certain we will, this would suggest that price wants to find its way down to the projection.

SPX
A look at daily cash shows a couple of things of interest.

First, notice the uptrend channel from the March lows. We are very close to that very important lower boundary line. I suspect that should be good for at least some kind of bounce.

Once broken, the play would be to sell a back test failure.

Also notice the RSI. We have broken the uptrend line from the March lows. We also had a very nice and pronounced negative divergence at the highs.

Can't help but notice what a crappy minor C wave, at least wave [v]. A very unsatisfying structure at such an important juncture imo.

We have a full moon Sunday night. Statistically, you are supposed to buy sell-offs into a moon. I don't personally trade moons, but I do pay close attention to them.

Tuesday is a KoolsTools cycle peak day.

Bottom line - there is absolutely nothing suggesting a bullish case here. As stated above, we should see an intermediate degree sized correction at MINIMUM.

Weekend Update #2

2009-10-02T21:21:00.010-05:00

30 YR BONDS
The long bond had nice impulsive upside price action this past week.

Price ran into a bevy of resistance including the 200 sma, the 4th of lessor, a 1:1 price projection, as well as the price extreme of intermediate (A) (red dotted line).

I am still unsure of what exactly is playing out with structure. I suspect this is tracing out a primary [B] wave, though far from certain about that. Perhaps this is an intermediate (X) wave of a double zigzag. Again, I'm not sure.

I do show some potential counts at the bottom of the chart. Notice the super bullish count. This would suggest that a major bottom has been put in. I think that is a very remote (at best) possibility.

It does appear that near-term price has not finished going up. Not sure it gets as high as that gap, but it's a big target.

The more structure we see, the better idea we get of what's happening in this market.

All prices basis combined contract.

CRUDE
The crude market rebounded strongly this week, which was not unexpected.

My interpretation has structure in minute [d] leg of a minor B wave triangle of intermediate (B). My alternate view is that this is a minute [iv] wave triangle.

The triangle form continues to take a recognizable shape. I'm showing the continuous contact. You will notice that it counts a little different than the front month November contract, but both are currently in the same place.

It appears that we have finished minuette (a) of minute [d]. It is not clear if we have completed (b) yet. It may need additional work, but looks close to being done.

If this is correct, we should see (c) up unfold this coming week. The projected upper boundary line looks to come in around 74.50ish. (c) = (a) at 74.66, with the 78.6% of (a) at 73.30.

Key levels are the 75.41 H, which is the price extreme of [b], and the 65.05 L, which is the price extreme of [c]. We don't want to see price get much above/below these levels.

Critical support is the 61.56 L. This is the price extreme of [a]. If my assessment of the internal structure of the triangle is incorrect and [c] is still tracing, then it will need to maintain above this level.

We can come up with general upside targets, as [c] appears complete. The continuous contract measures 15.45, while the November contract only measures 14.51.

This gives targets of 80.50 and 79.56 respectively. Calculations were based on the 65.05 L of [c]. Whenever [e] finishes, we will want use that price for measurement purposes. This will more than likely give higher targets.

The cycle didn't disappoint. Perhaps the next cycle low will determine the end of [e]? This is scheduled to come in 10 trading days from Friday, or October 16.

Bottom line - we are inching closer to entering the next phase of this market. Nobody will be more happy to see that than me. Correctives can drive a person mad - myself included.

Everything appears to be setup. Lets hope for follow through.

All prices basis continuous contract unless noted.

DOLLAR INDEX
The bucky finished relatively flat on the week.

I interpret structure to be in minuette (iv) of minute [iii] of intermediate (C) of primary [B]. My alternate count has primary [B] completing at the 76.045 L.

It appears that (iv) may have completed at the 77.735 H. It is unclear with all the chop and slop of the corrective waves.

Should this be incorrect, price can not trade through the 78.085 level. This would enter wave (i) territory, thus negating the current count.

This sure has channeled like crap the last couple of months. Price acts like it has yet to go through its minor degree wave 4.

I would love to be bullish this market, but I just can't get a clean impulse off the lows. There is 4-1 overlap right out of the gate. Perhaps it's a "cheater" as these do occasional happen.

Friday is setup for a decent KoolsTools cycle peak.

As pointed out last week, there is huge RSI divergence.

Bottom line - I'm still cautiously bearish this market.

All prices basis continuous contract.

GOLD
The gold market rebounded this past week, perhaps being the beneficiary of a flight from equities.

Nothing has changed with my current view of gold. Minute [v] of minor C of intermediate (B) is where I have structure.

Although not shown on the chart, my alternate would be that we finished minute [v] at the 1025.80 H. There is also the remote chance that we finished [i] at the 1025.80 H.

I believe that minute [iv] completed at the 985.50 L. It's a very nice ABC corrective. If this is correct, it appears that we may have put in minuette waves (i) and (ii) of [v].

Based on structure thus far, I'm not expecting price to make it to the triangle target at 1076.80. It's certainly possible that it does, however, its going to take a mighty [v] to get there.

We narrowly maintained channel support on a close basis. This should not be an issue, assuming the count is right.

This is a potential concern of mine. Sure looks like a double headed monster to me.

Should this fairly nice looking H/S play out, it measures down to the 940's. This is suggestive of a short-term top being in place. Not exactly what I'm looking for at this stage - hence the concern.

The cycle this past week played out as I thought it might. Whether it was an inversion or just a plain failure, it worked out. No cycles that I can see for this coming week.

Bottom line - I remain cautiously near-term bullish. Should we take out the 985.50 L, I will assume that two headed monster is in play.

All prices basis December contract.

Weekend Update - Grains

2009-10-02T16:15:00.009-05:00

CORN
The corn market closed down on the week after looking like it might breakout in the early part of the week.

My current interpretation has the corn market in the beginning stages of intermediate wave (3) of primary [5] of cycle c . My alternate view is that we are tracing a primary [4] wave triangle.

There is the possibility that primary [5] completed at the 302 L, however, I don't believe this to be the case.

The 347.50 H held, which was a key level of resistance. Structure still has not given any definitive confirmation as to what it wants near-term.

Drilling down intraday, the leg up off the 310 L appears to be corrective. This suggests that we may have a smaller degree minor 1 and 2 in place. We can't rule out that (2) has not yet finished.

If I have assessed structure correctly, we should begin to see hard downside impulsive price action. Friday was certainly a good start.

Though not shown on chart, 3 = 161.8% of 1 at 286. Intermediate (3) = (1) at 276.75. This fits in with the minimum objective of [5] at 278.25.

Key levels this week remain the 347.75 H and the 310 L.

I have included a fib set should (2) need additional work, or primary [5] being complete.

All prices continuous contract.

SOYBEANS
The bean market sold off hard this past week, particularly on Friday.

Based on my interpretation, structure is in intermediate (C) of primary [B] of cycle b. My alternate view is that primary [C] completed at the 1040 H and we have started cycle c down.

I have added a second alternate at the bottom of the chart. This is a speculative primary degree [B] wave triangle.

It appears that intermediate (B) was in fact complete at the 977.75 H. This means that we are currently in (C), if this is correct.

We are very near the lower boundary of the channel line, which may act as support. It is unclear if 5 waves down are finished, as there is always the chance of an extension, but it does look close.

This would be a convenient place for structure to turn. If not, (C) = (A) at 829.75.

I don't see anything of importance in the cycle area scheduled for this coming week.

All prices basis continuous contract.

WHEAT
Nothing new in the wheat market this past week as it continued to sell off.

My interpretation of structure has wheat in minor 5 of intermediate (3) of primary [5] of cycle v. My alternate view is that primary wave [3] is still in process.

It appears that minor 4 has completed at the 477.25 H. If correct, the minimum objective for 5 = 61.8% of 1 - 3, which sits at 439. Equality with 1 comes in at 414.25.

Intermediate (3) = (1) at 417.50.

The first clue that wheat is bottoming, will be a decisive break of the channel. RSI continues to sport a positive divergence on the daily time frame. Something to watch.

We are scheduled for a KoolsTools cycle low on Thursday.

At this point, structure suggests the downside is unfinished.

All prices continuous contract.

Edit: failed to mention that there will be a full moon on Sunday, October 4.

ES

2009-10-01T21:28:00.004-05:00

The equity markets experienced hard downside price action today. Range was an impressive (for the ES) 31.50 handles on another big volume day.

Has the "Great Bear" returned? Price action took out the last remaining level of support (1034.25) that would allow any bullish interpretation.

The preponderance of evidence suggests that we have topped. Is it THE top? That's yet to be determined, but I believe the odds are greater than 50% that we may have entered the next phase of this market.

I have replaced my count with the alternate scenario. This implies structure completed minor C of intermediate (Y) of primary [B] at the 1075.75 H.

Yes, it's far from that perfect idealized Elliott Wave structure, but it is what it is.

I am showing a 120 minute pit session chart because after the 1065.75 H it is a mess trying to get a clean count. Sub-minuette i finishing at the 1053.25 L is just a guess. It's more likely that it actually ended at the 1041.50 L. It's not all that important at this stage.

We should be close to finishing up a sub-micro degree wave structure (not shown).

The daily 1 bar projection sits at 1022. At a minimum, there should be some type of reaction once fulfilled.

The daily 50sma is currently at 1016.25, another level worthy of our attention.

Minuette degree targets include (iii) = 161.8% of (i) at 1002.25, and the 261.8% projection of (i) at 962.50.

Watch the base channel boundary line. This could be a support level.

As discussed in last nights post, I was forced to bail on my calls. I ended up netting out a profit, but chicken feed really. Not to bad when you can be 1000% wrong and still make some beer money :)

Bottom line - I have no choice but to be near-term bearish. There is just no bullish alternative. If your a bulltard, the best you can hope is that this is an intermediate degree (X) wave unfolding.

I suppose it's possible that we somehow finished minor A at the highs. There are better odds of me giving up VO. In other words - don't bet the ranch on it folks :)

It's time to sell this pig!

Crude

2009-10-01T21:02:00.002-05:00

The crude pits were a little tamer today, which was not unexpected. Range was $2.26 on above average volume.

I show two separate ways of basically getting to the same place, same time, that is minuette (a) completing at the 71.39 H. Doesn't really matter which is correct, they imply the same thing.

It is possible that the 71.39 H finished the wave iii (or [3]), suggesting that there should be one more leg higher.

Notice the RSI divergence. This is suggestive that the move off the 65.05 L has finished, although, not a certainty.

If this assessment is correct, we should find ourselves in a (b) wave corrective. Once complete, we should see minuette (c) higher.

We did have what appears to be a nice flat off the highs that retraced to the 38.2% to the tick. I suppose it's possible for this to be (b), however, I don't believe that's the case. I would expect something bigger in both price and time.

Anybody notice how the crude market bucked what the dollar did today? Every market has their own structure. Sometimes they fit with other markets - other times they don't.

Crude

2009-09-30T20:59:00.003-05:00

HUGE day in the crude pits. Price closed up almost 6% on big volume. Range was $4.50.

Well, obviously sub-minuette v was complete. I show that happened at the 65.05 L, which would have been on Friday. This should conclude minuette (c) and minute [c].

Structure off the bottom probably counts best as a double zigzag a wave, although I show a i on the chart. Regardless, we had a heck of a 3rd wave today, which is either a iii or [3] .

It appears that we finished whatever degree 3rd wave at the 70.72 H. If so, we are currently tracing a 4th.

If I have assessed structure correctly, we are working on the [d] leg of a minor B triangle. Price should not trade above the [b] wave high of 75.89.

We have to careful here as the waves start to contract, it is easy to over estimate the degrees.

Once [d] completes, we should see an [e] leg lower before we "thrust" up and out of the triangle.

iv should finish up fairly quickly then we should see a more meaningful retrace after v is done.

ES

2009-09-30T17:21:00.005-05:00

The equity markets had a strange day. Big swings back and forth. Range came in at 22 handles, while volume was huge.

Based on my interpretation, we finished minuette (ii) down and then traced out a sub-minuette i and ii waves. Should this be correct we are setup for big upside day tomorrow.

I got my deep corrective, as we retraced 78.6% of (i). In the process, we actually busted the channel, but quickly regained it.

Notice that we came close to the same channel on the wave ii retrace. This is an important channel. We need to maintain this support for a continued bullish view.

We now have upside targets based on the initial structure of minute [v]. iii = 161.8% of i at 1075.75, while the 261.8% of i is at 1093.50. (iii) = 161.8% of (i) at 1089, while the 261.8% of (i) sits at 1118.50.

Someone mentioned the possibility of a bigger triangle setting up in eChat today. I looked at this scenario last night and came to the conclusion that it is possible, however, the leg up from the 1035.75 L clearly traced a 5 wave structure.

Remember, triangle legs are always 3's. I suppose this could be a "cheater", which does happen, regardless of what the purists say. It's possible, just low odds imo.

I got myself a slug of October 103 SPY calls this morning near the lows. They shook me out of 1/2 of them for a $.55 profit, but I still have plenty to take advantage of a very bullish (i)(ii) , i-ii scenario - should this play out.

It appears that the KoolsTools cycle low came in as expected.

Any trade below 1041.50 is cause for concern. I will dump my calls should we trade through that level. Although not a deal breaker for the bullish case, it severely wounds it.

Bottom line - I'm near-term bullish. Structure suggests we have higher price ahead. Should my assessment be incorrect, I will change my strategy accordingly.