Weekend Update ES

ES We may have finished minor A up Thursday. I say may because it's not very clean after the 994 H.

We had 5 waves off the 994 H, however, there is huge 4-1 overlap. The only structure that is allowed with overlap are diagonals, both leading and ending. Do we have a leading diagonal?

Technically, we very well could. This would be a leading expanding diagonal, as opposed to contracting, which is more common. According to Prechter, "A leading diagonal in the wave one position is typically followed by a deep retracement", p. 41 Elliott Wave Principle. We had a retracement that ticked the 78.6%.

I'm not sure folks. Even if it turns out that it is indeed a LD, it is a very unsatisfying beginning to B. I will begrudgingly use it as my preferred count until proven otherwise.

There is still the possibility that this is wave (iv) and A has not yet completed. That would mean we have another little leg higher in (v). The majority of the evidence points to A being finished, and based on structure that's my belief.

It does appear that we have 5 waves coming off the 990.50 H. Perhaps this ugly minuette (i) has completed and we are ready to start impulsing. It should be noted that we broke the 2-4 channel.

(iii) = (i) at 974.75. The reciprocal to our 78.6% is the 127.2% at 970.50. A Pi ratio is also there. Lets see how price interacts at that number.

The next few days will give us a clue as to what type of structure this minor B will trace. A zigzag would be a pleasant surprise. Please Lord don't let it be some congested drawn out triangle...I'm begging!

I really don't have anything major on the timing front. Wednesday should be a daily cycle low day. There is a moon that comes in Wednesday as well. August should be a cycle peak on the monthly. Kool if your tuned in - please chime in if you have anything good.

SPX Here is my big picture view. Nothing has changed (yet). I'm questioning the 3x's zigzag. Prechter and gang changed their count to a 2x's zz. It really doesn't matter...you get to the same spot at the same time.

Weekend Chart Update #2

Crude It was a wild week for crude. It lost 6% on Wednesday, then took it all back Thursday. Friday continued the power move.

I believe that we completed a minute [b] wave Wednesday/Thursday globex. If I have my degree's right, we should have completed minuette (i) and (ii) (a beautiful zigzag) at the 64.96 L. This would mean we are currently tracing (iii).

(iii) = (i) at 70.04. Based on structure thus far, I expect that price to get left behind fairly quickly. The 161.8% sits at 73.18, while the 2:1 comes in at 75.14. These fib projections are basis September. The continuous contract are slightly different.

The daily picture shows that we are near a confluence of resistance. The previous channel line, the current channel line, the 78.6% AB=CD projection, the 70.7% retrace from the high - all sit directly ahead.

The 1 bar daily projection is at 74.62. I'll speculate that we eventually reach that target - maybe sooner than you think.

I managed to get a slug of USO calls Friday morning :) I dumped the majority of them towards the high of the day for +.85. I still have a smallish line and will see how this (iii) wave plays out...if I'm correct in my wave structure assessment.

Dollar Index The dollar was one of the few assets that didn't have a good week. Thursday's bearish harami was followed by a big bearish reversal candle Friday. This was after a fake breakout of the 2-4 line on Wednesday.

5 of intermediate (C) looks to still be tracing. If you drill down to a 15 minute chart, it appears that it is very close to completing a small triangle ((iv) of [v] of 5 ?).

The 10-day Daily Sentiment Index closed at 9.7 on Friday. The March 2008 bottom registered a low of 10.8. Structure says this pig is imminently close to an important bottom, while the sentiment indicators agree.

Dollar strength should have ramifications on other markets.

Gold GC had a nice bullish reversal candle on Friday, which was preceded by Thursday's bullish harami.

Should 964.80 be taken, then we will have to adjust our minute [ii]. AB=CD is at 985.20.

It sure has the look and feel of a triangle - doesn't it? Unfortunately, a triangle can only be in 4th's, B's or X's (p. 41, Elliott Wave Principle).

My preferred count is bearish and my alternate bullish. Hopefully, there is resolution soon as to what structure it is in.

30 YR Bond Bonds enjoyed a good week. As bond prices move higher - yields drop and vice versa. That is exactly what happened this past week.

It appears that minor B completed on Monday. Minor C should see five minute waves up.

AB=CD at 124'20. I suspect that we will see price exceed that projection. If so, the 127.2% comes in at about 127 (nice coincidence) with the 161.8% at 130'19.5.

I'm satisfied that (C) completed at 111'21.5, thus completing primary [A] . The proportionality is not there compared to 2 for this to still be minor 4. However, that is my alternate.

I will be looking for price to trace higher this coming week.

Weekend Chart Update #1

Beans The bean complex had a great week. They took out some resistance early Wednesday and followed with a big wide range candle Thursday.

The [1] [2], (1) (2) count is in jeopardy. The critical resistance level is 1071.75(red line), the high of [2]. If this level is taken, then we have to assume that b needs more work, or something else is at play.

We closed right at some resistance Friday. The 2:1 is at 1045.50 with the 88.6% directly above it. Also, notice the dark green trend line. This originates from the 7/7/08 H.

When you scale down to a smaller time frame it appears that we may have finished, or very close to finishing, a 3 wave. We don't have a whole lot of margin for error here.

Wheat The wheat market appears to be tracing out an expanded flat for its wave [4].

AB=CD at 547, while the 127.2% sits around 558. You will notice a dark red trend line that starts from the 12/5/08 L. This did a good job of stopping the intermediate (A) leg and I suspect it will do the same for the (C) leg, should price reach that level.

At the conclusion of this flat, I'm expecting price to continue its downtrend to complete an important bottom. We will also be able to put a new channel in when [4] is finally complete.

There is a possibility that the intermediate (B) wave is actually [5]. If you drill down you could possibly wrestle a ending diagonal out of it. I don't believe that is the case.

I'm looking for this counter-trend rally to resume next week and possibly continue into the following, but ultimately finding its way lower to complete [5].

Corn The corn market followed the rest of the grains and put in a counter-trend rally.

If my interpretation of structure is correct, corn completed its primary [3] wave. It has currently reached the 23.6% retracement area. There is also a gap from 7/2 that looks ripe for filling (highlighted box).

The 4th of lesser degree is also in the area. The rest of the retracement ratio's are on the chart should it need a deeper retrace.

Corn, like wheat, is setting up for an important bottom.

Standardized nomenclature and color schemes

Grand Supercycle: [I] / [a] - cyan
Supercycle: (I) / (a) - yellow
Cycle: I / a - red

Primary: [1] / [A] - green
Intermediate: (1) / (A) - orange
Minor: 1 / A - violet

Minute: [i] / [a] - red
Minuette: (i) / (a) - cyan
Subminuette: i / a - magenta

Micro: [1] / [A] - silver
Submicro: (1) / (A) - green
Miniscule: 1 / A - orange

I will be using this labeling starting this weekend.

Crude

Crude took back yesterdays pounding and put in a bull engulfment candle to kick start its C leg. Another monster range day at $4.53, or ES equivalent of 90+ handles. Volume was just as impressive, the strongest since 5/7/09.

They finished off B in globex and left no doubts we were in C. It appears that we should be fairly close to completing 1 of 5, if my assessment is correct. You could argue that we are currently tracing (3).

AB=CD at 72.29. Retracements from the high include the 61.8% at 68.95, which is basically the high of A. There is also confluence around the 70.30 price with both the 70.7% and the 78.6% projection of A.

The one bar daily projection is all the way up at 74.62, which currently seems like a stretch, but you never know.

This market is very buyable after it traces out its 2 wave IMO. I will be looking to put on a long line via calls. As always, please due your own due diligence before placing wagers.

KoolsTools Time Cycles say we could have a daily peak tomorrow. This might coincide with the completion of 1. The next major peak we should be watching for doesn't come in for another 11 trading days.

Again folks, this doesn't mean price is going up for the next 11 days. It means that in 11 trading days, wherever price is at, should be a peak day. Price could very well be lower for the peak.

This is my trading chart. Wanted to show you what the entire days action looked like off the 62.70 L. That vertical blue line shows why I have (1) and (2) labeled the way I do in the above chart.