Tuesday, May 31, 2011

Market Timing Update (5/31/11)

[EOD] Stocks -
Nice advance in stocks with low volume and decent internals.

A number of tracking counts are still on the table (Chart 1). The rally into the close has, not surprisingly, managed to deliver tricky a 7 wave advance since the May 25th low (Chart 2). We'll see if the market can eke out a 9 wave advance over the next few days.

Chart 3 updates the QE fractal in $RUT.
[10am] count update (SPX) -

[830am] Overnight update (ES, DX) -
ES - There's enough overlap and retrace to rule out a nested 1s2s down scenario, leaving the LD-down count still on the table (red). The most likely count is a completed zigzag-down to the recent low with a running flat within the zigzag (blue). The recent low could be the end of the correction or the first leg of the correction (Chart 1).

The first five-up from the recent low may have completed based on a version of the squiggle count in (Chart 2, blue), or the overnight high is the top of the small degree 3rd wave of the initial five-up (Chart 2, green).

For DX, Chart 3 gives an update of the squiggle count from its low. Blue=bullish, Red=Bearish.