Wednesday, September 22, 2010

Market Timing Update (9/22/10 Close)

[805PM] Futures Update-
The after-hours action appears corrective still, raising the possibility of a large expanded flat with an ED as wave c.

Alternatively, one can count the whole structure as a triple three.

If this is the case, wave (iv) (or iv) could be over either before or after the initial jobless claims report tomorrow AM, depending on whether the report triggers a spike down or spike up.

[4PM Stocks, USD, Gold]

The working count is that today's pullback is part or all of a fourth wave correction (Chart 1).

If the correction is complete, the market is most likely building a nested 1-2 based on squiggles (Chart 2 on INDU and RUT). Note that the PM low needs to hold for this immediately bullish count.

Today's low is likely important to remain bullish for the immediate near term, especially considering all indices have satisfied the minimum requirement of a retrace.

Note that the green labeled count can accommodate further pullback without violating one of the EWP cardinal rules. In that case, we'll have a combo (or a triangle) and a fourth wave that stretches further in time.

Perhaps the strongest support for the green labeled count is RUT, where the current pullback appears too deep. The RUT is also interesting in that
[1] It is leading to the down side as well as to the upside intraday (see Chart 2).
[2] It has been the laggard, yet to take out the June high.
It's a glass-half-full-or-half-empty case at the moment.

USD index
The real time update at [758AM] is worth mentioning.
[758AM] Overnight update (USD Index) There is a chance that USD index has bottomed per one of the following count. Time will tell.


Gold has likely finished its (iii) of [v]-up, with a smaller chance of the current top being wave i of a much extended wave (iii) of [v]-up.