Posts
Lots of talk this past week as the SPX had a "Golden Cross." This is the crossing of the Daily 50ma up through the 200ma. This is generally regarded as a very bullish event. It should be noted, however, that the DOW has yet to make this cross. I have not heard anybody discussing the fact that the weekly 50sma is screaming downward and should be around 950 when trade opens Monday. It would be rare that price would bust through this important moving average on its 1st sniff of it since May of 08, where it was rejected (wave 2 high). I guess anything can happen though.
A potential Head-and-Shoulders top pattern could be setting up as well. For those of you not familiar with this pattern, I would suggest going to www.thepatternsite.com/hst.html. IF this pattern does indeed come to fruition, we would be looking at a measured move of around 70 handles. This would make sense to me, as I believe that we have put in, at minimum, an intermediate top. With EVERBODY looking at this pattern does it even have a chance of playing out? The current wave structure is suggesting that it does (see chart below). There is also weekly timing (KoolsTools) that called for a cycle peak this past week (11/21 L - 3/6 L = 16 weeks, 3/6 + 16 weeks = 6/26). Maybe because everyone is watching this it will become a self-fulfilling prophecy. Then again, it may never materialize, after all, we are in a new bull market according to Cramer :)
Here is my current count for the ES. It appears that we have completed either an A or 1 down (could be an X as well) with our Tuesday low at 884.25. Looks like we have completed an EWT flat for the corrective A leg up and are in the process of working on B down. If my count is right, we would then see a C leg up to complete either a B or 2 up. I would prefer that our C up stay within the boundaries of the channel (cyan) I have drawn, although its certainly not necessary. And while we are at it, I would also prefer that the 61.8% retracement (952.75H - 884.25L) keep it in check, again though, not necessary.
Crude update. It appears that we have a completed wave structure up, a nice zigzag for A (white), and are in the process of a B down. My best guess is that B down will be a EWT flat or triangle based on the current structure. My count has crude completing an A (cyan) down and working on B up. I'm currently short crude via USO July 40 puts. I actually took 1/4 of my position off for $1.10 profit, but will hold the rest for lower prices. I am targeting the 57-61 area for profit (hopefully). As always, please do your own due diligence before placing any wagers.
Here is a nice little trade I had Friday in crude. I bought 69.17 and took 1 off @ 69.34. Moved my stop to 69.22, which was 1 tick below the little (b) high and below the triangle upper boundry line. They still got me...sigh. Was still good for .22. The neat thing about this triangle was that E put in a triangle itself.
