Market Timing Update (10/8/12)

[EOD] Stocks -
potentially a small degree corrective bounce from the days low.



[910am] ES update -
Corresponding ES counts to the cash counts discussed in 3-up or C-down (10/5/12). See charts.

MTU Weekend Ed. - 3-up OR C-down (10/5/12)

The Dow made a fresh recovery high while the rest of leading benchmark indexes lagged by various degrees (Chart 1). Based on the corrective nature of the pullback from the September highs, those benchmark indexes are likely to catch up with the Dow in good time. The debate at the moment is whether the pullback from the September high was over or is extending. The direction in which the market breaks out of its Oct 2-5 range (1439.01-1470.96 in SPX) likely determines the relative odds.

Hope Rally "model" update
Based on our Hope Rally “model”, U.S. stocks are around point #5 ( right hand side of Chart 2), which is likely not yet complete.






Well-defined near term risk
The direction in which the market breaks out of its Oct 2-5 range (1439.01-1470.96 in SPX) likely determines the relative odds on whether the correction from the September high is over. In other words, a fall below 1439.01 without first breaking above 1470.96 would favor a continued correction and a breakout above 1470.96 without first breaching 1439.01 would favor a fresh upswing. As noted in recent weekly commentaries, the correction from the September high is best interpreted as a fourth wave, degrees uncertain.

The above conclusion is based on the wave structure since the September high, best illustrated by that in the Dow (Chart 3).

(bullish - green) A zigzag correction off the orthodox high ended on October 2nd, with a truncated second decline. Wave 1 of a fresh upswing completed at Friday’s high.
(bearish - red) Wave A from the September high to the low on September 28th took the form of a flat. The rebound to Friday’s high is wave B which also took the form of a flat. A wave C decline is in progress.

Larger count update
With respect to the larger count since the June low, a fresh upswing is best counted as [v] of 3-up (Chart 4, green) while a continued consolidation is best counted as 4-down (Chart 4, blue).  A plausible but tail event is that point #5 of our Hope Rally "model" was indeed complete and the correction to point #6 has been in progress along a complex structure (Chart 4, red). 

Market Timing Update (10/5/12)

[1025am] SPX/INDU squiggles -
The Dow made a new high. SPX is approaching a new high. But it's prudent to leave room for a 3-3-5 flat from the recent low. See chart.


[850am] ES update -
Whether ES can break above (and hold) the potential "base channel" would be informative about the bull and bear counts. See chart.

Market Timing Update (10/4/12)

[EOD] Stocks-

Stocks are at a crossroad. In the very short term, there could be a thrust up out of a small-degree 4th wave or further subdivision up to finish a potential EDT small-degree 5th wave. The near term IHS target in SPX has been met (see 11am entry). Nasdaq COMPQ and NDX are lagging. The pending high could also be the end of an ABC (likely a flat) rebound or perhaps a potentially truncated 5th wave at a larger degree. See chart.

[11am] SPX/INDU update -
SPX approaching IHS target area. Let's see if the run up is 1 or 3-up (extending higher) or 5-up (terminal).


[920am] ES update -
Two options - if ES does not deliver a small degree 3rd wave-up based on the green or black-alt count for example, a post-triangle thrust-up or regular small-degree 5th wave-up likely completes an ABC rebound (black, red).

Market Timing Update (10/3/12)

[PS/EOD] Triangles -
Here are a couple of corresponding triangles (see 155pm update on ES below) in the SPX cash index. If it plays out, it serves well as a fourth wave triangle. On the other hand, a failed triangle can fail spectacularly.

[155pm/EOD] Stocks -
The wave structure of ES finally cleared up with three tracking counts (Chart 1). Of particular note, given a series of three-wave structures, is a bullish terminal triangle (the green count) or even a regular triangle from the orthodox high. The bearish red count suggests a higher near term high and the bearish black count suggests a near term high is in. Both the red and the blue counts suggest lower lows.


[1010am] SPX squiggles -
For the near term, a potential IHS if yesterday's PM low holds, pointing to potential target area of 1460, which coincides with the upper channel target.

Market Timing Update (10/2/12)

[350pm/EOD] Stocks -
SPX reclaiming this trendline support (Chart 1), but not yet out of a potential bear flag territory, as some tracking counts on the Dow show (Chart 2).


[1235pm] SPX squiggles -
Watch this potential support or potential small-degree terminal move.










[9am] ES update -
ES/SPX needs to overcome this potential bear flag for a push to the upside (chart 1). Keep an eye on the larger count (chart 2).

Market Timing Update (10/1/12)

[340pm/EOD] Stocks -
As it did last Friday, SPX found interim support at "this" trendline. See chart. See INDU chart for tracking counts at a larger degree.



[1pm] INDU update -
The Dow offers better tracking. Keep an eye on the larger count as well as the squiggle counts. See charts.



[815am] ES update -
The proposed rebound (see rebound (9/28/12)) is in progress. See the following chart for top tracking counts.