Friday, December 28, 2012

Market Timing Update (12/28/12)

[PS] Near term charts and squiggles -
Chart 1 presents the top tracking counts on SPX since the Nov low, where
(red) The December high is the end of a zigzag-like ABC structure. The fiscal-cliff related decline is either (1) the initial decline of a major downswing threatening the Nov low (1343) or
(2) an X wave to end above the Nov low (1343) prior to another advance beyond the Dec high (1448).

(blue) The lower mid-December high (1439) is the end of a five-wave advance (1 or A) as labeled. The December high (1448) is wave [b]-up of an [a][b][c] pullback for wave 2 or B.  The fiscal-cliff related decline is the proposed wave [c]-down.

Chart 2 zooms in on the wave structure of the decline from the "fiscal-cliff high", where
(red) SPX is wrapping up wave [iii]-down from the cliff high. [iv]-up and [v]-down are to follow before a meaningful bounce or a new upswing takes place.
(purple) A five wave decline ended on 12/27.  A potential meaningful bounce is likely taking the form of an expanded flat.  The market is wrapping up [b]-down of the proposed expanded flat.  The subsequent [c]-up is likely to drive SPX to above 1420 but below the cliff-high (1448) before reversing for lower lows. 
(blue) SPX is wrapping up a double zigzag corrective decline as labeled. A new upswing beyond the cliff-high (1448) is likely to follow.

[EOD] Stocks -
SPX and ES (after hours) are once again at their respective prior neckline. They are also around the 1395 target area discussed in Cliff (12/21/12). See charts.

[915am] ES update -
ES is retesting yesterday's low (Chart 1 and Chart 2) as expected. ES is approaching the flash crash trendline on the daily (Chart 1).