ES

ES finished down with a bearish candle combination for the last two days. Range was 20.75, which is misleading, as half took place during globex. Volume expanded from yesterday.

We gained a little bit of clarity with today's price action, although, far from anything definitive. It appears that minor B is in full swing. I think that a close under the 989.75 L would be a deal closer. Notice that level acted as support today.

I have the count labeled as a zigzag. I believe that it counts best this way. We clearly had two sets of small 5's down to the 1000.50 L, then notice that we had price overlap (on a close basis) with the retrace.

I may need to ratchet up the degree's one notch. The key will be if price prints 998.50 on this retrace. If it does, it confirms the zigzag. If not, then its possible that we have a 1-2, 1-2 situation and we are entering wave 3 of 3.


b retraced 70.7% of a, which leads me to assume that we will see the 141.4% projection of a at 985.75. The 60m projection comes in at 984, while the 15m terminal projection sits at 980.

Watch for the potential of a Bullish Butterfly that could setup in the 983 area.

I do have to admit that I like my previous count of an expanded flat. It's hard to tell at this point what the precise structure is. The bottom line is that we should see continued weakness.

Look how the 100 lotter's unloaded on the retrace. Somebody was going to get crushed here...it wasn't going to be the gold line :)

This is the perfect example of why I pay attention to this indicator.

This coincided well with the 15m deadly at 996.50.

Crude

Crude had a very narrow range day - just a $1.48 range. It put in a doji on the daily.

5 1/2 days and counting in this consolidation. The never ending (iv) wave. It has to make a move sooner or later.

We did get a little 5 wave advance off the 70.09 L. Maybe that's the start of something bigger.

Based on structure, I have no reason not to believe the break will be higher. Stay patient - the magic 8-ball says we should have range expansion tomorrow.

ES

ES finished the day positive, thanks to an eod push. Range was awful at 9.5 handles. Even worse was volume, completing the second lowest volume day of the year (1/2/09).

I have no clue where the count is. This [v] wave has been absolutely maddening to figure out. EWI says they "think" [v] ended at Friday's top, so we will go with that (they are as clueless as the rest of us).

It does appear that we completed a nice zigzag off of the 1016 H. Perhaps we get a double zigzag down to start off minor B.

It wasn't a surprise that price rejected, however temporary, at 1007.75. It appears that the leg off the 998.25 L can count as a 5. This suggests that the retrace will be a zigzag, more than likely of sub-minuette degree.

There is also the chance that this stoopid [v] wave has yet to complete.

I continue to believe that we are in a topping process. Everything from structure, momentum, breath and everything in between says we are due a retrace from the big advance off the 865.25 L. It's coming whether you want it to or not.

The big's were really non-committal until the last 4 minutes of trade.

One thing is for sure, we are short-term overbought.










A lot has been mentioned lately about how the Federal Reserve is funneling money through the big banks to prop up the equity markets. They accomplish this through their Open Market Operations, both Permanent (POMO) and Temporary (TOMO).

When they purchase Treasury securities from these selected dealers, which range from $1.5B - $7.5B, the capital infusion allows them to leverage the money and basically ramp the markets.

It makes all the sense in the world to me. Whether you believe that or not, there is a high correlation to positive closing days and the Fed's OMO's. Here is a schedule of upcoming auctions.

Weekend Update ES

ES The ES continues its topping process. Did we have an ending diagonal? Maybe...maybe not.

I'm just not sure. This whole structure off the 7/29 lows has been BS. Nothing but choppy overlapping waves that is extremely tough to discern (but easy to trade). In a word - corrective.

For the time being, I will assume that the orthodox high is 1006.50, which was an ending diagonal and minor A has completed. I have a count on the chart, but it is speculation at this point.

I will keep scalping like a demon and continue to take their money. The count will resolve itself soon enough.

Speaking of taking their money, please tell me that Kool and I were not the only ones selling this pig at 1015. I had 17,638.832 numbers in that area AND the boundary line AND a completed structure AND divergence (denoted by red circle). Free money folks.

SPX Here is my big picture view. As I stated last week, EWI has changed their count to reflect a double zigzag.

This is probably a better interpretation, but not without unanswered questions. As I also stated, there is really no difference because you end up in the same place at the same time.

The next good timing (KoolsTools), on a daily basis, is a cycle peak that comes in 15 trading days on Friday the 28th. This comes from the 5/15 and 7/8 lows.

Folks, you don't need to know where the next 50 points are going. Find out where the next 4-6 are headed and you can live like a king.

Weekend Update #2

CRUDE The crude market spent the majority of the week consolidating.

Nothing has changed in structure to alter my current interpretation. My view remains that crude is tracing out a minute [c] leg to finish off minor B.

I'm still assuming that price reaches the daily projection (KoolsTools) around 75. This should be a significant resistance area, as the 127.2% projection of [a] and the June highs are right there as well.

Here is how the subwaves are looking. It appeared that we were going to finally move on out of this minuette (iv) wave on Friday. Unfortunately, Jim Kane threw his 88.6% in the way.

There is the possibility that (v) could be an ending diagonal, as shown by my alternate count. Remember, ED's are a 3-3-3-3-3 structure. It appears that we completed what could be the first 4 legs.

Notice also that wave iii is shorter than i and the converging trend lines. We would need another 3 wave leg up that is less than $2.66 to satisfy this pattern.

I will be paying close attention to this when trade opens Sunday night.

DOLLAR INDEX The dollar put in new swing lows Wednesday and then abruptly exploded higher to finish the week.

We may have put in an important bottom this past week. The downside structure looks complete. It also appears that the move off the 77.52 L is impulsing. Notice the channel break as well (I think that first fake break was warning sign).

Our first area of resistance should be the 4th of lesser high at 79.81. If we take out the 81.97 H, then I think that will more than likely lock in the bottom.

If price trades below the 77.52 L we know (C) is not complete.

GOLD The gold market turned down in the latter part of the week, perhaps due to the dollar strength.

It appears that minute [ii] has completed. Notice the 78.6% projection of (a) is where price turned. This is the top of what Michael Jardine refers to as "the death zone."

If I'm correct in my overall assessment of gold, then we should start to see some acceleration to the downside. This appears to fit with the dollar structure.

Our first objective would be to take out the 930 level. Again, our line in the sand is the 996.90 H. If price were to trade through that level then the alternate count comes into play.

30 YR BOND The bond complex spent the week losing ground.

I have made some minor changes to the count. It appears that intermediate (4) has completed, though not a certainty. If completed, then we should be starting down in a minor set of waves that would finish (5).

There is also the possibility that (4) will turn a triangle.

Notice how minor 2 was stopped in its tracks at the channel line.