Thursday, September 13, 2012

Market Timing Update (9/13/12)

[EOD] Stocks -
SPX is now obviously on its way to the black point #5 based on our Hope Rally model (Chart 1). Whether that will be the end of the Hope Rally or there will be 6-down and 7-up to follow remains to be seen.

The question at hand is how much upside potential is left for the current run.

On the bullish side, squiggle count can accommodate a small-degree [iv]-down and [v]-up if one counts the wave 4 low ending with a triangle (Chart 2).

On the bearish side, wave 5 could be approaching its end if one counts the wave 4 low at the nominal low (Chart 2). We have discussed these counts in recent updates.

Also on the bearish side, the wave structure in the DOW now presents a potential bearish EDT since the June low(Chart 3). If so, INDU should be capped by 13786, and realistically by 13600/13650. So caution is required.

[1255pm] SPX update -

[8am] ES update -
Near term ES structure - The most bullish one being the green wave [ii] with an terminal triangle wave (c). The most bearish one being an expanded flat (potentially at several degrees, e.g. black (c)[ii]-down or red [c]4-down, etc).