Monday, August 18, 2014

Market Timing Update (8/18/14)

[EOD] Stocks -
SPX regained 50DMA, filled the middle gap,continued to subdivide higher without overlap since the first pullback. See chart 1. Nasdaq indexes are at fresh 2014 highs.

Price actions present two potential interesting wedges.
The first wedge starts at the August low and ends near current rebound high, counts as C(X) or a full wave v (truncated) or [i] of wave v.
The second wedge starts at the first major pullback of the rebound and ends this week, counts as wave [C]*-up of 2/B-up as marked. If an overnight/AM drop is absent, the proposed wedge becomes a regular small-degree five wave.

Tomorrow presents a potential time window for a pullback/high. Let's see if the market takes the opportunity.

[1145am] SPX update -
SPX fills the second gap as expected. Tracking counts in Chart 1 and tracking squiggles in Chart 2.

[910am] ES/NQ update -
NQ exceeded its July high and is at a fresh 2014 high. 

Mid-gap fill at 1965.14 today is likely, given the overnight upswing in futures and a potential gap open in cash. See Tracking the Rebound (8/15/14) for details.

At the same time, ES is wedging at two wave degrees, and NQ looks to complete a larger five wave advance and is also approaching its IHS target.

Upward breakout is necessary for extension potential. Otherwise, at least a retrace is likely See charts.

If an LDT or EDT from the August low in ES/SPX is playing out, the overhead cap is about 1975 in ES and 1978 in SPX cash.