Thursday, March 29, 2012

MTU Weekend Ed - Outlook (3/29/12 Close)

Note - Next update is expected to be posted around mid-April.

Shift (3/23/12) notes that a wave 4-down correction off the October 2011 low or an outright trend change has started. This week's price action lends some support to the wave 4 interpretation (Chart 1 DAX, and Chart 2 SPX, blue).  Note that the DAX is currently approaching potential support from MA50.

Chart 2 also highlights top alternative counts:
(red) outright trend change
(green) immediately bullish based on a much extended wave 3 off the October 2011 low.

Our expectation that "wave 4 retrace is likely shallow and probably time consuming in order to alternate with the deep and sharp wave 2 retrace"  remains unchanged.  In fact, wave 4 could turn out to be a triangle if it needs to consume more time and a deeper retrace is not required (Chart 3 ES).

(Mar 29, 930pm)

Market Timing Update (3/29/12)

[EOD] Stocks -
(bullish) INDU and SPX completed a 3-3-5 running flat (See 11am entry). NDX completed a zigzag decline (Chart 1). Whether this is the end of the pullback or wave (W) of a larger correction remains to be seen.

(bearish) SPX finished an initial impulse 1-down from its nominal high. INDU did the same from an orthodox high. NDX is in a bearish 1/2/[i]/[ii] formation.

(conclusion) Odds favor the bullish interpretation at the moment based on asynchronous nominal high between SPX/INDU and the overlap in NDX. Today's low is a key pivot.

[11am] SPX/ES update -
Three counts on SPX. 1-down from high or 3-3-5 (running?) flat in ES / SPX.

[840am] ES, DAX update -

Wednesday, March 28, 2012

Market Timing Update (3/28/12)

[1225pm] SPX/ES update -
Approaching trend line support.

[740am] ES update -

Tuesday, March 27, 2012

Market Timing Update (3/27/12)

[EOD] Stocks -
The decline off the current high in SPX counts well as a regular flat with C =1.68 A which fits one of the guidelines (C =0.618 A beyond A)(Chart 1, blue). It could be the initial stage of an impulse (Chart 1, red) or part of a larger 4th wave correction.

Chart 2 shows how the current decline fits into the possibility of a 2nd wave retrace (Chart 2, green) or a trend change (Chart 2, blue).

If this is a 2nd wave retrace, Chart 3 shows two possibilities: (1) wave [v]-up or 3-up extends (Chart 3, gray) or (2) an extended wave v-up of (v)[iii]-up within a greater extension (Chart 3, green).

Finally, a five-up off the March low in NDX looks quite mature (Chart 4). It's possible to count the NDX action as an expanded flat correction (especially in NQ futures) or a downward reversal . On a separate note, NDX/NQ is currently approaching fib and trendline support (Chart 5 and Chart 6).  Let's see what tomorrow brings.

[130pm] SPX squiggles -
Follow up squiggles on a lower low.  In addition, a flat is another reasonable option. See 2nd chart below.
[1240pm] SPX squiggles -

[9am] ES update -

Monday, March 26, 2012

Market Timing Update (3/26/12)

[EOD] Stocks -
While today's new high on a visual five wave advance from yesterday's low can very well be the 5th wave off the March 6th low (Chart 1, blue alt), the disproportionate size of the correction last week raise the odds of the following possibilities.
[near term bearish] Wave 4 off the Oct2011 low is a flat/triangle (Chart 1, blue). Note that INDU is yet to make a new high.
["super bullish"] Wave [iii] of wave 3 off the Oct2011 low is still in progress. The recent high is (iii) of [iii] of 3 which coincided with the RSI peak. (Chart 1, green).

Chart 2
offers a near term squiggle count.

[240pm] NDX update -
approaching potential resistance

[225pm] SPX squiggles -
Internals are not as strong as the advance in price. See the 2nd chart below.
[7am] ES update -
See Shift (3/23/12) for discussions.

Friday, March 23, 2012

MTU Weekend Ed. - Shift (3/23/12 Close)

Recent price actions in SPX suggest that a wave 4-down correction off the October 2011 low or an outright trend change likely has started (Chart 1).

Current target for a wave 4 correction is around 1315-1340.  Note that wave 4 retrace is likely shallow and probably time consuming in order to alternate with the deep and sharp wave 2 retrace.

A decline much below that level would substantially increase the likelihood of a trend change and the recent rise above the long term resistance zone being a fake breakout.   See Chart 2 and discussions in Long term resistance (3/16/12).

Regarding the current decline.  The best count at the moment, in my view, is a zigzag decline followed by an expanded flat rebound (Chart 3, blue). Alternative short term counts are labeled in green and red.

Market Timing Update (3/23/12)

[835am] ES update -

The decline so far has been overlapping. Yesterday's low now another key pivot.
On the bullish side, the low could be in.
On the bearish side, a larger corrective double three or a bearish initial LD decline is still in progress.

Thursday, March 22, 2012

Market Timing Update (3/22/12)

[EOD] Stocks -
INDU topped one day earlier than SPX (Chart 1).
From the nominal high, one can count a completed impulse down (9-waves) with slight truncation.  Bearish if the nominal high and the count play out.

From the potential orthodox high in INDU (which is the SPX high), it's a decent completed zigzag. Note that there's a lower low in SPX this afternoon - so no truncation there (Chart 2). A low / the low could be in -  unclear if it is A of a larger correction, a small degree 4th wave, or a 2nd wave pullback.

Chart 3 to the right shows the larger count and various near term options to be resolved.

[1130am] SPX update -

[730am] ES update -

Wednesday, March 21, 2012

Market Timing Update (3/21/12)

[EOD] Stocks -
If a wave (v)-up is still missing off the March 6th low, wave (iv)-down most likely ended at today's low. We have a i-up and ii-down (expanded flat) going on during the day session.

Today's low (which is a lower low in INDU) appears to be the key, at least for the near term. See Chart 1. Breaking below today's low likely confirms the next down swing.

The alternative positions for wave (iv) down are
(1) March 19th low, followed by a 1/2/1/2 setup.
(2) Today's low going into the close concluding a triangle wave (iv) down.
Both appear less likely.

[1205pm] SPX squiggles -

[820am] ES update -