Thursday, September 23, 2010

Market Timing Update (9/23/10 Close)

[4PM] The pullback has been very deep as warned in the entry below. Futures pre-market low was 1117.25/50 in ESZ0. The pm pullback came within a hair's distance from that low.

The decline so far perhaps counts as a double zigzag with a triangle wave [B], as well as a less ideal / too strong wave [C]. We'll see what the overnight session brings.

Wave (iv) can take additional decline, but anything more than a moderate lower low is not ideal. See the 948AM entry about a lower low in the cash index.

[1155AM] Count Update (ES)-
But futures has a pre-market lower low, making a count of 9 waves (perhaps missing a squiggle high, or not), which could signal the top of an initial rise (as wave i of (v)). A deep pullback (as wave ii of (v)) is likely given the strong run-up this morning.

[1145AM] Count Update (SPX)-
SPX has retraced between 0.5 and 0.618 of the decline at the moment and we have an incomplete initial impulse ( 7-wave visual so far.)
[1055AM] Count Update (SPX+ES)-
[948AM] SPX count update -
The top (or wave-1 of a much more bullish count) is in per the orange count.
The green count shows one more fifth wave push higher (truncate, extend, ED).
Leaning towards the green count based on the discussion in the [810AM] entry for now.
The cash chart could allow for one more lower low, but the futures charts says wave (iv) low is in.

[810AM] Overnight update (ES) -
This is the same chart shown in last night's [805PM] entry and updated. The decline overnight obeys the drawn trend line well, but does not look wedgy.
[1] The orange count shown in recent days is rejected.
[2] The green count survives.
[3] The current decline counts well either as a triple-three or a double-three depending on where one places the end of wave (iii) per the green count.

[4] The jobless claims report may be important and how much bull stops get taken out is also important the claims number does not generate a bounce.
[5] The overnight decline is stalling near the 0.236 retrace and the upward trend line since late August.
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