Wednesday, September 29, 2010

Market Timing Update (9/29/10 Close)

[1111PM]ES update -
Some thoughts regarding why a large triangle wave (iv) is not on the top of the list. But it is prudent to keep it in mind as the general shape in many indices does look triangle-like.

[1] In ES, it is at odds with RUT and TRANS.
[2] In SPX/INDU/COMPQ/NDX, it is also at odds with RUT and TRANS. Moreover, the new high in cash indices yesterday demands yesterday's high as wave b of the triangle, which may require truncation of wave b of the triangle in COMPQ/NDX as well as ES.

[4PM]Stocks -
The actions in the $RUT in recent days have been informative.

The end is in sight.
If the proposed wave iii of (v) does not extend -
- the top is within the reach of one more small advance (blue count ) if not already in (pink count)
- whether one counts recent waves as an ED or not, or when the proposed unorthodox ED started
- note that the proposed wave iii of (v) is short than wave i of (v), implying that the top is also conveniently capped. One can do his/her own calculation.
- The RUT is now finally above the June and August highs, nicely completing the table in That's All Folks! (9/24/10), as George H pointed out intraday.

Oh, the caveat - the above logical conclusion depends on the proposed wave iii of (v) not extending. We'll take it one wave at a time.

If wave iii of (v) does extend, the top will likely reach the top end of our target range of 1158 - 1164 and approaching the 0.786 fib retrace. Conveniently, the $RUT will show the way if the next up leg exceeds the cap for the proposed wave v of (v).

Comments in yesterday's EOD update continue to be very much applicable. Please refer to those comments and help save some on-line real estate. But here are the updated charts and squiggles on SPX and ES.