E-Mini S&P Elliott Wave Discussion: July, 2010

What if the largest degree wave count is "NOT" a Grand Supercycle but in reality it is only a Supercycle degree. What if the SP500 Top is actually a B wave top in a larger Horizontal pattern? That would make you want to be short already. The Primary Wave 2 top that everybody is running has been trashed long time ago and is worthless to trade with anymore! Waves 1 and 2 are generally always the least extended waves and correct at the previous 4th wave of one lesser degree. Wave two's do not become the largest rallies since the depression or are they separated in just the Dow or SP500 Look at the QQQQ as it just about regained 100%, this is not a wave 2 counter rally! Look at any other world indexes and there would be "No" way you can make them fit into a 5 wave sequence as it would put all indexes well below zero!
Even a minimum basic calculation in length would put the QQQQ well under Zero with a 5 wave impulse going down.
In "all" my wave counting analytics, I have switched over to Supercycle degree and have dumped everything related to GSC degree wave counts. :)
 
BB - thanks for the comment. Could I ask that you upload your chart(s)? I can make some comments after seeing your labeling.

I do label quarterly, monthly and weekly charts but generally do not concern myself with Grand or Super Cycle wave counts when it comes to trading. I position trade and scalp on 60 min chart level and below. It would be highly unusual for me to hold a position of those durations in the futures markets. My trading and comments deal more with the primary degree and lower degrees of trend.

For the record I am already short but using ETF's.

I look forward to seeing the charts.

Thanks



Quote from "BB":

What if the largest degree wave count is "NOT" a Grand Supercycle but in reality it is only a Supercycle degree. What if the SP500 Top is actually a B wave top in a larger Horizontal pattern? That would make you want to be short already. The Primary Wave 2 top that everybody is running has been trashed long time ago and is worthless to trade with anymore! Waves 1 and 2 are generally always the least extended waves and correct at the previous 4th wave of one lesser degree. Wave two's do not become the largest rallies since the depression or are they separated in just the Dow or SP500 Look at the QQQQ as it just about regained 100%, this is not a wave 2 counter rally! Look at any other world indexes and there would be "No" way you can make them fit into a 5 wave sequence as it would put all indexes well below zero!
Even a minimum basic calculation in length would put the QQQQ well under Zero with a 5 wave impulse going down.
In "all" my wave counting analytics, I have switched over to Supercycle degree and have dumped everything related to GSC degree wave counts. :)
More...
 
Tonights post is II parts .

PART I:

The current wave structure that I am labeling as w.4 is still unfolding. Today's large advance represents w.c of w.b circle. My expectation for the ON session or tomorrow's early trade is a slight advance followed by a partial retracement of the rally that ensued from 1172.25. The optimal retracement level is a .618, which is the most common retracement for each wave of a triangle. I'll post that level once I am certain that the current w.b circle had ended.

From a trading perspective, I actually prefer the triangle over a flat interpretation as a triangle gives a trader the added confidence in knowing that the structure only occurs before the final wave of an impulsive wave (either in a wave B or wave 4 postion). Currently, that's my fourth wave interpretation. So basically, should this interpretation play out, nobody is going to be wondering how high prices can go thereafter as the triangle signals that an end to the rally is near and calculating termination points for w.5 are relatively simple.

Continued , see part II of II
 

Attachments

I've attached a chart that I presented before depicting moving average compression. Look to the far right side of the chart. Notice how the three moving averages : 30, 10 and MOAD are still compressing as indicated by the blue circle! I think this techincally argues more for the triangle interpretation ratther than the flat interpretaion. However one should note that price always has the final say.


Here's the market's position at the close:

Cyclic Momentum: Weekly is neutral. Daily is bullish. 60 min. is OB.

Pattern: Either a triangle or flat correction for w.4

Time: 4 bars from high to high during the current corrective triangle w.4.


Trade Strategy: Remain flat until w.4 wave pattern becomes clearer. There are times to be aggressive and times to let a wave pattern play out before taking a position. This would be the time to adopt the latter and wait until one of the interpretations can be eliminated. I think we'll have our answer by the end of the week.



Best of Trading
 

Attachments

This post contains 4 charts

Insight:

The ES-F and $SPX continues to unfold in what I believe is w.4. Friday's advance was interesting as it eliminated the regular triangle interpretation that I was working as my operative wave count. The minor breach of the high that was made on 11/9/2010 (1124.75) also eliminated the regular flat interpretation, leaving Elliotticians with three possibilities.

Elliott Wave Analysis:
As of the close of Friday's session, the following interpretations remain that attempt to describe price movement.


  1. Expanded flat
  2. Running Triangle
  3. W. 4 completed and w.5 is developing

Some readers may argue that in highly leveraged markets, a minor break doesn't negate the regular flat correction. I'm inclined to disagree. Both the ES_F and $SPX made new highs! The rules of EW also dictate otherwise. In my experience placing emphasis upon a wave count that violates a rule almost certainly proves incorrect as more data is added to the right side of the chart.


Attached are the charts for each interpretation including the their wave labeling. With regard to all three charts, my short term bias is higher, possibly to the 1.272 - 1.382 RF (1239-45) for interpretations 1 and 2. Should trade advance beyond these levels, the w.5 interpretation is more likely. Please note that as of this writing, I'm not placing a high probability on the w.5 interpretation because the guideline of alternation would not be met. W.2 unfolded in a sharp correction and therefore the technician should be looking for a sideways correction in w.4. To conclude that w.4 had ended at 1171 would mean that both w.2 and w.4 unfolded in a sharp corrective manner.


Here's the market's position at the close of Friday's trade:


Cyclic Momentum: Weekly is slightly bullish. Daily is bullish and OB. 60 min. is bullish and at the verge of OB.


Pattern: Either a running triangle or expanded flat correction for w.4


Time: no analysis made


Trade Strategy: A top is near but I prefer to remain flat until w.4 wave pattern becomes clearer. There are times to be aggressive and times to let a wave pattern play out before taking a position. This would be the time to adopt the latter and wait until one of the interpretations can be eliminated. Should w.4 still be developing there is plenty of time to jump aboard w.5.



Best of Trading
 

Attachments

Quote from EWT:

This post contains 4 charts

Insight:

The ES-F and $SPX continues to unfold in what I believe is w.4. Friday's advance was interesting as it eliminated the regular triangle interpretation that I was working as my operative wave count. The minor breach of the high that was made on 11/9/2010 (1124.75) also eliminated the regular flat interpretation, leaving Elliotticians with three possibilities.

Elliott Wave Analysis:
As of the close of Friday's session, the following interpretations remain that attempt to describe price movement.


  1. Expanded flat
  2. Running Triangle
  3. W. 4 completed and w.5 is developing

Some readers may argue that in highly leveraged markets, a minor break doesn't negate the regular flat correction. I'm inclined to disagree. Both the ES_F and $SPX made new highs! The rules of EW also dictate otherwise. In my experience placing emphasis upon a wave count that violates a rule almost certainly proves incorrect as more data is added to the right side of the chart.


Attached are the charts for each interpretation including the their wave labeling. With regard to all three charts, my short term bias is higher, possibly to the 1.272 - 1.382 RF (1239-45) for interpretations 1 and 2. Should trade advance beyond these levels, the w.5 interpretation is more likely. Please note that as of this writing, I'm not placing a high probability on the w.5 interpretation because the guideline of alternation would not be met. W.2 unfolded in a sharp correction and therefore the technician should be looking for a sideways correction in w.4. To conclude that w.4 had ended at 1171 would mean that both w.2 and w.4 unfolded in a sharp corrective manner.


Here's the market's position at the close of Friday's trade:


Cyclic Momentum: Weekly is slightly bullish. Daily is bullish and OB. 60 min. is bullish and at the verge of OB.


Pattern: Either a running triangle or expanded flat correction for w.4


Time: no analysis made


Trade Strategy: A top is near but I prefer to remain flat until w.4 wave pattern becomes clearer. There are times to be aggressive and times to let a wave pattern play out before taking a position. This would be the time to adopt the latter and wait until one of the interpretations can be eliminated. Should w.4 still be developing there is plenty of time to jump aboard w.5.



Best of Trading
More...
 

Attachments

Here's a question for my readership. Does anyone know how I can post multipe charts within the same post? Seems aweful combersome and difficult to get my point across when I have to seperate comments and charts.

Thanks
 
Quote from EWT:

Here's a question for my readership. Does anyone know how I can post multipe charts within the same post? Seems aweful combersome and difficult to get my point across when I have to seperate comments and charts.

Thanks
More...

Post it at an image storage site and then use the img code to link to it. Simply, you can't upload multiple attachments to the same message post here at ET.

Mark
 
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