Tuesday, August 17, 2010

Market Timing Update (8/17/10 Close)

SPX- Two top counts depending when the presumed (i)-down of [i]'3-down ended (Chart 1 on the SPX e-mini). One of the count suggests a potential end of (ii)-up at today's high.

BLUE-(i) ended the Aug 12th pre-market low - (ii)-up is an expanded flat. The decline into the close is [4]-down of c-up of (ii)-up. Expect higher highs tomorrow to complete (ii)-up.

GREEN-(i) ended at the yesterday's low - (ii)-up is a flat that may be complete at today's high. Alternatively, (ii)-up is a double three (flat-x-three) where the decline into the close is the x-wave.

The bond mania - The bond mania most likely had ended at the 2008 peak (in price and trough in yields). There are two ways to count the 30-year bond price since its 1981 low (yield high) as being corrective and one way to count it as a completed impulse wave. If this is the case, bond yields will not make a new low. However, the analysis also suggests that there's additional room in the current rally in bonds.

More details regarding the bond mania, including wave counts and charts, will be provided in the weekend commentary.