Wednesday, October 26, 2011

Market Timing Update (10/26/11)

[345pm / EOD] SPX, INDU update -
The decline from the recent high still appears corrective so far. Without a new high in any key benchmark, it is prudent to leave some room for additional near term weakness.

For example, the red count in Chart 1 (SPX) shows an incomplete correction with a very complex (b)-up. One the other hand the blue count in Chart 1 shows a simple zigzag and the possibility that the low is in.

It is also interesting to note that the neckline of IHS in INDU (Chart 2) has been offering support repeatedly.

It's also interesting to note the possibility of an expanded EDT or a regular five C in transports if it has not topped, as outlined in the 1140am entry. See this chart.

Finally, Chart 3 and Chart 4 present tracking counts on NQ and NDX. Of particular interest is the possibility of a potential ascending triangle B wave (see NQ) if the low is not in.

[1140am] DAX update and another look at Transports, SPX squiggles -DAX - The proposed corrective rebound pattern highlighted in the 920am entry played out. DAX broke to a lower low. Ambiguity in the larger count remains.
TRAN - expanded EDT or a regular five C if it has not topped.
SPX - most likely a corrective decline, tracking counts
[11am] NQ, INDU, SPX update -
A series of threes. INDU at the neckline, again. SPX - see the 2nd chart under the 1015am entry

[1015am] ES squiggles -

[920am] DAX, ES squiggles -
ES - see if the base channel holds, 0.618 retrace ahead
DAX - see if a potential triangle and a EDT holds.
[730am] DAX, ES squiggles -
ES has more or less mirrored DAX overnight. The next advance will shed light on whether it is c of (x)-up or (iii) of [iii]-up. Naturally, the overnight low is a key pivot.