Monday, October 24, 2011

Market Timing Update (10/24/11)

Transports -
As shown in the weekend commentary, transports exhibit a clearer wave structure, which likely puts the market at a small-degree 4th wave going into the close.
As the 60-min chart shows, the 0.618 retrace is within the range where C=0.5A and C=0.618A.
[EOD] Stocks -
NQ (Chart 1) is less than 3 index points shy of a higher high while NDX (Chart 2) (as well as COMPQ) managed a higher high. A higher high in NQ (which looks likely) will present the first serious challenge to the bearish thesis (i.e. the decline from May or July is the first leg of sell-off). A new high in COMPQ which is still some distance away presents a 2nd serious challenge.

Independently, SPX appears to be on track with its wave C (or 3) advance since the October low as discussed in Chicka Chicka Boom Boom (10/21/11) (Chart 3). And INDU is marching towards its IHS target area (Chart 4).

If the bearish count plays out, the market should be rolling over any minute now. See the Red and Purple counts in Chart 5. The blue count in Chart 5 shows the bullish count.

[215 pm. 230pm] SPX update -
zooming out a little, and zooming in a little, see chart

[1140 am] DAX, SPX, NDX update -
Full (small-degree) 5th wave extension in SPX, still no higher high in DAX at the close, and no higher high in NQ (2nd chart below next to the 1030am entry) (although NDX managed one).
[1030 am] SPX squiggles -
End of this break-out wave is approaching (as [i] of C/3 or C/3). Note [v] = [i] at the moment as marked.

[840am] DAX, ES, NQ update -
No higher high in DAX, NQ still lags, new high in ES. See Chicka Chicka Boom Boom (10/21/11) for details.