Monday, December 6, 2010

Market Timing Update (12/6/10)

[955pm] Triangle -
Nice triangle likely completed, and almost confirmed. If so, it completes the sideways scenario [2] below, postpones the immediately bearish scenario [1] below, and turns into an immediately bullish scenario [3] below.

[4pm] EOD -
Chart to the right - Last week was another upward reversal week follow a multi-week pullback. However, volume is the lowest among the breakout weeks during the hope rally.

The nominal high in SPX (so far) occurred in the 89th week since the bottom.

Today concludes the 21st month since the bottom .

Tracking three counts for the moment (Chart 1) .
[1] immediately bearish - wave [i]-up (black) of Hope Rally 3 (or [b]-up of a continued correction, red) ended last week in futures (or today in futures with truncation and in cash). The market is in the initial stage of a wave [ii]-down or wave [c]-down pullback.

[2] sideways - wave (iv)-down of the advance from last week's low is still in progress, probably as a triangle (green). There is some ambiguity regarding whether this afternoon's high is wave d-up of the triangle or only wave [B] of wave c-down of the triangle.

[3] immediately bullish - the wave (iv)-down correction mentioned in item-[2] above completed today. This triangle is a bit odd-looking. Wave i-up of wave (v)-up out the triangle is complete at this afternoon's high. The decline into the close is wave ii-down of wave (v)-up. Chart 2 gives a squiggle count on SPX under this interpretation.

[Real time entries] during the day session are archived at MTU Real Time.