Tuesday, October 18, 2011

Market Timing Update (10/18/11)

[4pm] Stocks -
Eventful day, report of potential France-Germany agreement on a euro 2Tr expansion of the rescue fund.

The top tracking counts discussed in Retrace or Breakout (10/14/11) remain intact. Chart 1 refreshes these counts on the 60-min frame. SPX finally broke above the multi-week/month resistance (pink line). We'll find out if it sticks soon. Currently, there's some negative divergence on the 60-min frame.

The very near term tracking counts are also tracking (Chart 2). It's interesting to note that ES, RUT and MIDcap did not make a higher high today. We'll find out if it will soon.

On the squiggle level (Chart 3), we probably have a truncated small-degree 5th, which serves as
(a) the end of an impulse from today's low
(b) end of wave (iii) from today's low
(c) end of a zigzag from today's low with a potential triangle connecting wave.

[330pm] SPX update -
A powerful upward surge on Guardian report regarding France-Germany agreement of an significant expansion of the rescue fund. Curiously, ES hasn't made a higher high yet. Here are the tracking counts on SPX cash. Let's see how the cash market closes.

[220pm] SPX squiggles -
5-up or triple zigzag off the low approaching its end in SPX cash. ES shows potentially bearish flat.

[12pm] DAX and SPX update -
see charts, also see the 2nd chart below for an update of SPX squiggle tracking on 1-min chart.
[1010am] SPX update -
5 wave decline from the nominal high in SPX cash approaching its end
[7am] ES, DAX update -
Likely completed 5 waves down from the nominal high in ES and DAX