Tuesday, August 24, 2010

Market Timing Update (8/24/10 Close)

[11PM] All you can squiggle -
* the larger picture -

* the current sell-off -* bottom fishing -

[7PM] More tactical contingencies -
Here are the SP500 cash index charts.

Chart 1 - Two counts under P3. These are the same counts discussed in the [4PM update]on the E-mini.

Chart 2 - A potential triangle in progress within the context of a larger [X]-wave, a(B)-wave, or a P2-down (long term bullish).

Naturally, a triangle would describe the range bound market over the past few months well. In addition, a triangle at the moment tracks "all" indices -SP500, COMPQ and RUT.

[4PM Stocks, Euro, Gold] Tracking two bearish and two bullish near term counts currently - all within the context of a larger bearish trend (Chart 1).

The bearish counts are labeled in red. The difference between the two is where (i)-down of 3-down ends. The more bearish count has (i)-down already complete in a nested 1s2s formation. The less bearish one has (i)-down as a LD yet to be completed.

The "bullish" counts are labeled in blue and in bordered pink. The chart should be self-explanatory. The current decline is wave [b]-down of 2-up. Dropping below the July low will invalidate this interpretation.

Chart 2 offers a squiggle count of the SP500 cash index. Unless we have a truncated wave C as indicated (which is less likely in my view), this rebound is likely to take extra time as well as price to complete.

If the recent decline in Euro is a corrective ABC structure, Euro is approaching support and a rebound (as C of (2) or something a lot more bullish) is likely. Chart 3

Gold appears to be in the middle of a fifth wave advance at multiple degrees or an extended small-degree 3rd wave. A new high is in sight if this is the case. Chart 4