Crude

Crude was clobbered today for almost 4%. Range was huge at $4.23 with about 1/2 that coming in globex.

I have to say that I was surprised by price action today. It appeared to me that we had a nice 5 up and was setup for upside follow through. Not.

I do however, think that this makes a much nicer minuette degree leg down. Check out the daily chart. You can now clearly see a 3 down from the highs last week.

If my interpretation is correct that crude is tracing a double zigzag for a minute [b] wave, then price must not breach the (x) wave low of 66.94.

If (b) is complete, then price should start impulsing higher for its final (c) leg. I would like to give the all clear, but there is a chance there is some minor downside work left.

If you have noticed, the 50 day sma has been supporting price the last couple of days. Also, the dollar sure didn't hurt crude today. I found that kinda strange.

Very nice positive RSI divergence at the 69.13 L.

Bottom line - I think crude is nearly done tracing this minuette (b) wave. I know where I'm wrong.

ES

Based on the globex action, it appeared we were in for a nice trading day. Unfortunately, we had less than a 9 handle pit range on mild volume. A yawner.

We gapped down in globex and sold off to the 1013.25 L. From there we grinded, overlapped, and chopped our way a little bit higher.

We broke both supports mentioned in the weekend update, however, we never closed below the 1014.75 L on the bigger charts. Where does that leave us?

Wished I could tell you matter of fact exactly where we are. It's all a WAG at this point.

My belief is that we still have continued work on the upside left to complete. I don't believe structure is telling us that we are ready for a sell-off. Not yet anyway.

I could be dead wrong. And I sure don't have enough confidence in my upside belief that I would even think about holding overnight long positions.

In my opinion, the easy money has been made on the long side. Those of you that hold in "hopes" of getting back to even are playing with fire. Who knows, I'm probably wrong again - or is that still :)

There are a couple of ways of looking at structure here. Some bearish and a few bullish. I said that I would assume that minor C completed if we took out the 1014.75 L. I lied, at least for the time being.

I just don't see price action as impulsive off the 1038.75 H. Perhaps they are messing with us so that it is unrecognizable to the masses. I need to see additional price action in order to make a better guess.

I can tell you with certainty, structure from the 1013.25 L is not impulsive.

Lets see what tomorrow brings. Maybe they can keep me awake after the crude pit closes.

Weekend Update-ES

ES
Has the counter trend bear rally run its course? The necessary requirements are in place.

This is a 60 minute pit session chart. Notice the beautiful looking structure. This shows cleaner, much nicer looking waves from the 975.50 L.

I show two counts on this chart. My best guess is that structure has not finished tracing the last minute [5]th wave. Yet, you could certainly make the case that [5] is finished, which would complete minor C up.

The issue that I have with the C being finished scenario, is that it does NOT appear to be an impulse off of the 1038.75 H. I think it counts much better as a double zigzag (w, x, y).

This suggests that structure has not finished its upside work. I could also be wrong in my interpretation. That is why I will use that as my alternate count.

I show minuette (i) and (ii) complete. If this is correct then we should be entering the meat of (iii) of (v). When globex opens tonight, I would expect price to start moving higher, if not gapping up.

If price action does not start higher and instead moves down, or worse - gaps down, I would be very worried if I were a bull.

Notice that we are right at the channel line. This needs to hold for the bullish case to be made.

Important levels are the 1022 L and more importantly, the 1014.75 L. Should the 1014.75 L give way, I would immediately assume that minor C has completed.

As stated above, all the necessary requirements are currently in place for a significant top to be in. This would include both time and price.

We have extreme bullishness. As a matter of fact, more extreme than we had at the 07 high according to the Daily Sentiment Index.

This leg of the advance has most certainly been weaker, based on the internals, than the preceding minor A. Just about everything is showing a negative divergence, including RSI.

W.D. Gann said that you can look for tops in the 90th - 99th day or week. We will be entering the 99th week of trade from our top in 07.

Prechter came out on Friday with a short and sweet interim report. In it he said "traders should move back into a full short position today." He also said, "given the extent of the rise, there is no longer much reason to allow for a more complex corrective pattern to unfold."

Could there be a little bit further to go on the upside? According to my count - yes. But folks, we are almost there. I believe the next phase of the market is very close.

If your one of those that rode this to the bottom and back, the market gods have been kind enough to allow you to be able get out with at least your shirt, should you choose to do so.

My belief is that you wont get a second chance. Whether this is "THE" top, or just a top, wont be known until after the fact. Be careful out there.

I apologize for not being able to get this update out sooner. It takes a lot of work, and more importantly, a lot of time to put these updates together.

The only way I know if anybody is actually reading this, is the occasional comment, but those are few and far between.

Edit: as I finish this up, globex has opened with a gap down to the 1025 level. This is not good news for the bullish case. Again 1022 is a level that needs to hold. Should that fail, then 1014.75 is the line in the sand.

Weekend Update #2

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

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

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

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

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

All prices basis continuous contract.

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

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

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

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

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

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

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

All prices basis continuous contract.

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

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

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

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

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

All prices basis continuous contract.

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

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

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

Notice how price was rejected at the corrective base channel.

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

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

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

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

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

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

All prices basis continuous contract.

Weekend Update - Grains

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

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

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

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

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

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

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

All prices basis continuous contract.

CORN
The corn market remains in its downtrend.

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

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

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

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

All prices basis continuous contract.

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

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

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

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

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

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

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

All prices basis continuous contract.