Wednesday, September 1, 2010

Market Timing Update (9/1/10 Close)

[6PM squiggles and targets] Here's the squiggle count on SP500 cash index on the 1-min chart, along with potential target levels.

The squiggle structure on the e-mini is (not surprisingly) somewhat different. It has always been a challenge and an art to identify the one to emphasize and to reconcile the two.

On the cash index, assuming the advance from yesterday's low is a regular five (which is quite reasonable), potential targets (for this segment of the advance, at least) are 1085, 1090, and 1099. See chart for more details.

[4PM stocks] The market resolved to the upside as suspected (see discussions in yesterday's EOD update). Odds now strongly favor this advance as minute wave [ii]-up of minor wave 3-down OR minute wave [c]-up of minor wave 2-up. The difference is whether the June and the August high will be taken out by the current advance.

Chart 1 tracks the top 3 relevant wave counts.

(black) From a time perspective, there could be more upside potential after a wave (x) pullback if [i]-down ended yesterday. In other words, the coming top could be just (w) of [ii]-down.

(red) If [i]-down ended last week, [ii]-up is tracing out a large double three and should be done after the the current advance. Follow the squiggles. The final leg could either be a three or a five from yesterday's low.

(blue) The most bullish count is a [c]-up of 2-up in progress. No need to over-count the squiggles before the June / August highs are taken out. Chart 2 highlights a confirmed turn and the potential upside potential.

Chart 3 and Chart 4 offer squiggle counts.