Monday, August 8, 2011

Market Timing Update (8/9/11)

[EOD] Bonds -
Showed the recount on the 10Y U.S. Treasury yield in [EOD] Stocks -">this chart yesterday, it's worth taking a look (with today's rally updated)

[EOD] Stocks -
It's informative to keep an eye on the wave structure of futures. Despite the thin volume overnight, their price trajectories do incorporate Asia and European events, particularly in this environment.

ES -
The blue count on ES says the low is in - i.e. a five wave decline from the early July high ended at the overnight low. The current rebound is likely 1-2-1 so far.

The red count suggests only a wave (iv) of [iii] bounce at the moment and requires two more down legs, (v)-down of [iii]-down and [v]-down. This assumes that wave (iii) of [iii]-down extends .

At the close, today's zigzag rebound slightly exceeded the 0.382 retrace of wave (iii) of [iii], suggesting immediate declines if this is the case. Note also that today's rebound in ES is around 0.382 retrace of the decline since the LATE July high.

SPX cash -
The decline from the early July high ended at today's cash low (green) OR today's rally into the close is wave [c] of an expanded flat 4 (blue), requiring one more sell-off to complete the current decline.

Note that the wave labels are one degree larger than those in the ES chart above.

[240pm] post-FOMC-
see 2nd chart below. See this earlier chart(740am entry) for context
[213pm] pre-FOMC-
[740am] ES count update-
As a follow up to last night's update (see below), two tracking counts.
[1] ES finished a five wave decline from the late July high (blue)
[2] ES only finished wave (iii) from the late July high (red)
On the larger count the overnight low would be
(1) end of correction or first impulse down (very bullish to near term bullish)
(2) wave [iii] of a five wave decline from the early July high (more downside)
(3) wave (iii) of [iii] or (iii) of impulse down from late July high (more downside)

[Aug 8, 1015pm] ES count update-
After-hour crash, again, in ES. Five down ending or endless extension ( (iii) of [iii] ending) - will deal with the wave degree later.

[1] bullish count is an interim retrace of the final wave of an expanding EDT, see the matching pink star
[2] bearish count is the proposed EDT top is in the recent high, a swift retrace to the bottom of the EDT is in progress