S&P Futures: Daily Wrap Up for November 29, 2010

Today's session continued to demonstrate sloppy price action. Today's decline below w(a) blue (1174.75) forces an adjustment to the previous wave labeling whereas w.b circle is still unfolding. Unfortunately I can't determine if w.4 is unfolding as a triangle as the proposed chart indicates or if the flat interpretation will prevail. Until the wave structure clearly identifies the operative wave count, both interpretations remain valid. As a reminder, either interpretation eventually leads to a new recovery high above 1224.75.

There is one uncertainty that I am watching, i.e. should price decline below 1171, odds are that a much larger decline would ensue and my wave labeling is wrong.

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

Cyclic Momentum: Weekly is bearish but not OS. Daily is neutral. 60 min. is bullish, approaching OB.

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

Time: No analysis made.

Trade Strategy: Remain flat until w.4 wave pattern becomes clearer.


Best of Trading

S&P Futures: Daily Wrap Up for November 24, 2010

Fist of all, I'd like to wish all my readers who celebrate Thanksgiving a happy and safe holiday.


The market continues to unfold in a choppy and sideways manner that is consistent with corrective structures. As I have previously mentioned, w.4 is unfolding in either a triangle or flat correction. The extent of the current rally from 1174.75 doesn't count complete so I will be looking higher to 1203.75 whereas w(c) = w (a) to complete w.b circle. Should price exceed this level, other targets exist between 1212.75 - 1217.3 depending on what type of triangle or flat develops.

Here's the market's position:

Cyclic Momentum: Weekly is bearish but not OS. Daily is bullish but not OB. 60 min. is

OB.

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


Time: No analysis made.

Trade Strategy: Remain flat until w.4 wave pattern becomes clearer.




Best of Trading

USD: Update

The DX_F is testing structural resistance at the 80 handle. A significant break of this area would create wave overlap that bolsters my opinion that w.2 may have ended. Any advance beyond 83.64, i.e. w.(B) would confirm that interpretation and set the stage for a significant rally to above 88.8.

At the daily chart level it is possible to make an argument that w.1 (red) had ended and that we should expect a w.2 (red) pullback before pushing higher. The fact that all three chart levels are OB as measured by cyclic momentum indicators bolsters a short term bearish view. If the current advance from 75.23 is not finished, one should note that the wave count is mature. On a short term basis, I'm still going to be looking for a completed wave count for w.1 (red) followed by a corrective move. 

Let's see what develops.

Best of Trading

Stalking FCX Trade Set-Up

I am looking for a possible long entry for FCX around 90-92 whereas w.(4) correction should terminate in the range of the previous fourth wave (see KS = key support) and where w.c=w.a.

As most readers know copper mining is FCX's primary business. Looking at the weekly chart of copper futures (HG_F) as well as the daily chart level supports the interpretation for higher prices in FCX once w(4) has completed.

Look for future flash alerts!

Best of Trading

Crude Oil: Update

Current outlook for crude oil .... monthly,weekly and daily wave counts.

Best of Trading

Gold: Update

Gold has bounced in what appears to be a incomplete corrective structure. The rally has reached the .382 retracement but my expectation if for the remainder of the corrective structure to unfold in either a zig-zag or seven wave pattern. Initial target projection are 1373.8 where w.c = w.a and the .50 retracement which also corresponds to the previous w.iv circle. Once the correction has ended, prices should draw down to the 1156 area. 

Best of Trading

S&P Futures: Daily Wrap Up for November 22,2010

Last time I left the readership with the thought that the market is working a minor degree w. developing in either a flat or triangle corrective structure. As long as 1171 holds my view of the wave structure remains intact.

From the two charts that were presented in the week in review, I was anticipating an advance. That advance was achieved in the ON session and terminated just above the .618 retracement (1204.75). In doing so but failing to push higher necessitates a slight labeling change based upon today's price action but it doesn't effect the overall interpretation of structures for minor w.4. Either interpretation is still valid.

Looking at the 60 min. chart, I am anticipating a modest push up tomorrow but I am uncertain as to whether w(b) ? had ended. Don't be surprised if the market makes another push down to test the lower trendline of the triangle. Should price extend well beyond the .786 retracement in tomorrows trade, odds start favoring the flat interpretation.

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

Momentum: Weekly is OB and has turned down. Daily is bullish but not OB. 60 min. is bullish.

Pattern: W.c of wave.2. Either a triangle or flat correction for w.4

Time: No analysis made.

Trade Strategy: Remain flat until w.4 wave pattern becomes clearer.

Best of Trading

Week In Review for 11/15 - 11/19

Announcements:

Due to the Thanksgiving holiday, there will not be a week in review published for 11/22- 11/26.

The Week In Review:

The month of November has been strong for all dollar denominated asset classes as investors rationalized  buying everything in hope that the FED will create inflation and drive markets up. In November, the Daily Sentiment Index for the S&P reached 94% bulls and the AAII Investor's poll reached 57.6% bulls. Both readings are the highest since January 2007. Considering the optimism for stocks that transpired near the market's high of 10/12/2007 and the weak economy, it's not hard to reason from a contrarian viewpoint that most investors who counted on the FED's easing before and are now even more bullish than 2007 will also suffer a similar fate when they least likely expect it.

With Thanksgiving only days away here in the U.S., I think most readers expect a week of low volatility as traders are more focused on the "bird" than QE2, USD, equities and commodities. It's often during these holiday times that I take some time to review my trade plan, goals for next year and a good old fashion dose of "Chartfest"... basically, I'm looking at allot of markets. In the next couple of weeks I'll be posting the charts of crude oil, copper, USD, some sectors and individual stocks.

However, I try not to take anything for granted. Note that the following chart shows converging moving averages as annotated by the blue circles. Analysts call this condition "market compression". I find that when this occurs there is a high probability for a big market move. Also not that I've circled several places on the chart when all three moving averages converged. Draw your own conclusions but the subsequent moves seem rather definitive to me. Unfortunately, most traders don't know what direction the market will trade by just looking at the chart.  That is unless you have Elliott Wave in your trading toolbox. So let's try to explain why the market is compressing and the expected direction of the market using the wave principle.

ES_F Forecast:

At the daily chart level, I'm still working a w.4 retracement whereas the wave pattern should unfold in either a flat correction or a triangle, followed by a new recovery high. This interpretation bodes well for a market that undergoing compressing. Between the flat and triangle, the triangle interpretation (see 60 min. chart levels) would best explain the market compression that we find developing at daily chart level. Under each of these interpretations, a decline below w.1, roughly the .50 retracement of w.2 - w.3, would eliminate another high in the rally that began in July from w. (B) and call for a larger decline. While, I remain open to this possibility, I don't think the probability of such an event is high.

Turning my attention to the 60 min. chart levels, I've shown the charts for flat and triangle interpretation. Until I see how the pattern is unfolding, I can't make a near term forecast beyond what I have noted.

Here's the market's position as of the close on 11/19/2010.

Momentum: Weekly is OB and has turned down. Daily is bullish but not OB. 60 min. is OB.
Pattern: W.c of wave.2. Either a triangle or flat correction for w.4

Time: No analysis made.

Trade Strategy: Remain flat until w.4 wave pattern becomes clearer.

Conclusion: Once w.4 ends, the market should push higher in an impulsive manner. Expect a new recovery high that is telegraphed by the three moving average convergences at the daily chart level.


Best of Trading

S&P Futures:FLASH

At the 60 min. chart level the current price action is impulsive in nature. If the intermediate top is in... w.(b) then a decline in 5 waves should occur to an initial target of :

w.c = .618 w.a @1166.5

w.c= w.a at 1145 (most common target)



Note: the previous 4th wave  is @ 1153 region. There are also lower targets but I prefer to see what develops. Should the need arise I will publish them.

Best of Trading

S&P: Daily Wrap Up for November 17, 2010

Today was certainly a snoozer... that is until 2:50 est. As most of you know from my Twitter posts, identifying the current wave count on lower TF's was difficult as prices chopped back and forth. Sideways corrections are always difficult to identify the termination points because there are numerous corrective structures and combinations thereof. That brings me to a great lesson. When the water is murky... meaning a trader can't identify the wave pattern with absolute uncertainty, then stand down and wait until the water is clear. A trick that I use in such times of frustration is to find the lowest TF that I can find where the wave structure is clear. Often this will be at the 60-120-240 chart level.

After the market closed I noticed that the 120 min chart provided the clarity I needed.  Here's what I know. The current wave structure has unfolded in a 3-3 wave pattern (w.a and w.b). Any pattern that starts with 3 waves is a corrective pattern. Therefore my bias to the downside i.e. new low is still intact. Any wave structure that begins in 3 waves c can also be tricky as several possibilities exist. W.(iv) could unfold in a triangle or a flat correction. The difference is that under the flat interpretation, price will trade ABOVE 1182, most likely to 1184.75 with w.c in 5 distinct waves. Other reisitance levels are provided within the chart.

Possible targets for the termination of the triangle's interpretation (not shown) will have it's termination point located between w.a and w.b. Regardless of which interpretation plays out, traders who positions themselves correctly can capitalize on the fact that new lows will eventually be reached.

Tomorrow I'll be watching this market closely to identify the operative wave count as well as targets for the next move to the downside.

Best of Trading

S&P: Flash Update

I'm looking at a 4th wave triangle wheres w.e should unfold in 3 waves. Expect a new high up to 1184 area.

Best of Trading

S&P Futures: Trade Plan For 11/17/2010

My bias remains to the downside. Looking at the wave structure as of Tuesdays close, I believe that we are working w.(iv) with a target of 1188. Also note that the .236  retracement (1181.75) is also an acceptable termination point for forth waves. One should note that I am unclear as to whether w.iii circle has completed. Given this I am not willing to place any short trades as the retracement levels would be significantly different depending on where w. iii circle had ended. Interestedly, the ON session traded within a tick of the .236 and has completed w.b at agreement 1175. As of this post, price has traded above w.(b) of w.b indicating that the decline from 1181 is now confirmed as a corrective structure and that the move will be fully retraced. The min. target for EF_057 is 1182.5- 1183.25.

Conclusion: Wave structure confirms the expectation for a rally but we are not certain as to whether the end of the move will be 1182.5- 1183.25 or if the market will push higher to 1188 for ES1_057.

Plan accordingly.

Best of Trading

S&P Futures: Flash Update III

The market has reached new lows as anticipated. Here's an updated chart. Notice that the market is OS and on the verge of turning up. At the 5 min chart level, momentum has made a bullish turn therefore on a short term basis I'm looking higher for w.(iv). Prices should reach 1188 followed by another wave of selling pressure if my analysis is correct. Let's see what happens.

Best of Trading

ES_F: Flash Update

Recent 3 wave correction that should lead to new lows. Trail stops

S&P Flash Alert

Price is testing the lower boundary of the corrective price channel. A significant break would imply 3rd wave development and that a larger correction would be developing. Also note the MOAD line is testing the 30-ma. A break would also imply a significant trend change. See how last nights comments provided an insight to today's price action at http://elliottwavelive.blogspot.com/2010/11/s-futures-daily-wrap-up-for-november-15.html

Best of Trading

USD: Update

DX_F continue to rise from the day that the FED announced QE2. There is little in the way of resistance between the current price and key resistance of 80.17. Any trade above this level would be the first hint that the intermediate trend is under pressure. I assure readers that a massive amount of shorts are starting to cover and my expectation is that if "key resistance" is broken, then the big squeeze will be on. Should critical resistance succumb to buying pressure... well that confirms a trend change.

Bottom line: Watch key and critical resistance. All dollar denominated assets are at risk!

Best of Trading

S&P Futures: Daily Time Cycles

At the Daily chart level H-H time cycles have averaged 26.75 +/- 1day while L-L averages 6 days +/- 1 day. 6 days is the 1/2 cycle of the 10-day cycle that is common to the S&P. Expect the market to reach new lows today or tomorrow setting the stage for a rally. Watch momentum for a bullish reversal as price reaches the OS levels. A completed wave count along with this condition  would confirm that the decline had ended.

Best of Trading

S&P Futures: Daily Wrap Up for November 15, 2010

Selling pressure continued today even though traders tried to buy the market at the open. The decline from the highs does not appear to be complete. The decline could be the start of w.3 as I depicted in the week in review or just a w.4 correction. The fact that selling pressure was on weak volume infers that the later is the preferred count. The daily chart show that w.4 should be a sideways affair since the rule of alternation apply whereas w.2 was a sharp correction and w.4 should then be either a triangle of flat correction. My target for the decline is 1153.25.

I've added another daily chart showing an indicator that Jeff Kennedy of EWI developed. Note what transpires as the black MOAD line drops below the purple 30 ma. Should this occur, a sizable sell off would occur. The indicator last made a similar cross right after the April top. I'll be keeping a close eye on this indicator as it confirms that more bearish scenario.

Finally, at the 60 min. chart  level I've labeled the wave structure as well as included the corrective price channel. As long as price remains within the channel during the decline... the structure remains corrective. That would be consistent with the interpretation at the daily chart level.





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

Momentum: Remains OB but turning down on weekly. Daily and 60 min. time frames are bearish but nearing an OS condition.

Pattern: wave.iv of wave.c of wave.2.

Time: No analysis made.

Trade Strategy: Remain flat. Further downside is expected but limited in my opinion. Should daily and 60 min chart levels make a bullish momentum reversal, price should rally. Once that has exhausted itself I expect another wave of selling. I'll be looking to establish a bearish position as momentum indicators and price confirm a top is in place.


Best of Trading

Week In Review for 11/8/10 - 11/12/10

QE2 vs Elliott Wave Theory. Which One Wins Out?

In this weeks review I want to spend some time looking at the bigger picture and other possible wave counts that may provide us with an additional bias as to where the market is heading. Currently I have already presented a scenario under what I will call Scenario #1 whereas Intermediate w.(c) of w.b is still underway with initial targets of 1237-38 or 1343.6. Thereafter, a decline greater than the Great Depression should ensue. This is the "Dooms Day Scenario"

Under Scenario #2: the current rally is viewed as minor w. B of Intermediate w. (B) is unfolding as an expanded flat correction whereas w. B exceeds the origin of w. A. This implies that w.B would extend higher once the current decline that began on 11/9/10 ends. I'll post termination points as soon as they can be identified ... that is if this scenario plays out. Once w. B is complete, a five wave decline would be called for that would terminate significantly below 1003.1, possibly at the 1.382 reverse fibo of the distance between w.A and w.B .

Under Scenario #3: the current wave pattern would unfold in a triangle fourth wave. The current rally whether complete or not should result in a sizable decline in three waves proportionate to a .618 retracement of  w.( a - b). This implies a possible decline below 1003.1. Of course much depends on the significances of any further advance. For sake of argument, we'll assume that w.c will terminate below 1003.1. Thereafter w.d and w.e will also unfold in three waves to complete w. IV. Thereafter a new recovery high above w.III would occur.

Conclusion:

Each scenario presented projects that price will make new lows before any rally of significant proportion. When several Elliott patterns like this agree with respect to direction there is obviously a higher probability that price will trade in that direction. I believe that its only a matter of when.

Best of Trading

Mini Gold: Flash Update

Yesterday I put out a Flash Alert that Gold had just completed a three wave correction signaling that there was a good opportunity to go short. Our Trade Strategy was to wait for the recent decline to confirm five waves down ( which it did) and to establish a bearish position with an entry on lower TF as momentum indicators make a bearish reversal against a 3 wave corrective structure with a protective stop 1417.2. The expected target was for a full retracement of the corrective structure from 1382 - 1417.2.

Here's what transpired:

Right after the close, the three wave correction against the decline from 1417.2 - 1403.8 completed at the .618 retracement of 1409.4 and whereas w.c=.618 w.a @1409.9. I have shown the lower TF at the 20 min chart level but the 5 min. could also be used to fine tune the entry with a smaller capital exposure (stop) just above 1409.4. Notice the green vertical line indicating the bearish momentum reversal. While it is hard to see, there is 1 price bar just before the gap that gave a trader a very low risk opportunity to place a short.


As you can see the decline from 1409.4 has indeed fully retraced the corrective structure from 1382 - 1417.2. Momentum has reached OS and has diverged with price. A bullish reversal has also been made.
Time to take profit.

This was a great trade and the best part is that the Gold trade is crowded. At the daily chart level there is potential for a much larger decline so I will be monitoring the wave structure to identify another set-up.

Best of Trading

USD Wave Count for November 11, 2010

Attached is a chart of for DX_F at the 240 minute and Daily chart levels. Note, should price trade above the previous w.4 (78.51) at the daily chart level, most likely w.2 circle had terminated and a trader should expect a prolonged rally in which price should eventually trade above 88.8. 

I know what your thinking right now.... that is I've lost my mind because QE2 is going to decimate the dollar. However looking at the 240 min chart, notice the capitulation as the Fed announced QE2; also bullish sentiment was just 5% which is 2% lower than the previous reading registered when the Dollar bottomed in late 2009. Nobody wanted to be long the Dollar then either. Furthermore the chart shows that minute w.i circle (not shown) will not be reached until minuette w.(iii), w. (iv) and w.(v) are in place. Therefore I continue to look higher in this market whereas w.(iii) = 1.618 w.(i) at 80.01 being my interimm target.

Best of Trading

Best of Trading

Mini-Gold: Flash Alert for November 11,2010

Mini Gold appears to have completed a three wave flat correction against the .786 retracement and 1.272 reverse extension of w.b circle. The decline from 1424.6 appears to be in five waves. Even if a top in Gold  is not in place, the wave structure has possible target implications to 1374.8. Even if I'm dead wrong about the decline, we should still achieve a .5 - .618 retracement of w.b-w.c. I'll try to narrow the target clusters as more of the wave structure is know.

Here's the Market's position at the time of this post:

Momentum: OB on weekly and daily time frames. 60 min chart level is also OB but has turned bearish.
Pattern: ABC correction completed
Time: No analysis made

Trade Strategy: Wait for the recent decline to confirm five waves down. Look to establish a bearish position with an entry on lower TF as momentum indicators make a bearish reversal against a 3 wave corrective structure with a protective stop 1417.2.

Best of Trading

S&P Futures: Daily Wrap Up for November 10,2010

On Monday I stated that price action either began a complex w.iv decline or it ended at the 1214.75 low. Yesterday a new high was struck that might indicate that w.3 had been struck. However, today's decline still leaves the potential for a more complex forth wave at the daily chart level. What's important is that we recognize that the decline from 1124.75 is an unfolding forth wave (either w.iv or w.4) on lower time frames. Therefore on a short term basis I am looking down. Downside targets are between 1180.5 - 1153.25 ( the .236 and .386 retracements of wave 3) on the daily chart level. A close beneath 1126.75 on the daily chart level would create wave overlap that would signal that a significant top had been struck. In my next Week In Review I will be discussing several alternative wave counts that lead me to believe that a significant decline is still in forthcoming.

After the close Cisco reported earnings that beat but the stock sold off hard. The NQ_F are down significantly while the YM_F and ES_F are also down. So unless this is a fake out in the ON session, I expect weakness at the open.

Here's the Market's Position as of the close:

Momentum Indicators: OB on Weekly and Daily chart levels but both have turned down indicating a possible selling opportunity. 60 min chart is bullish and in OB territory.


Pattern: At weekly chart level: w.iv or w.4 of w.c of wave.2 ( or other alternative counts instead of w.2 - all with bearish implications)

Time: No change from previous comment.

Trade Strategy: Looking to establish a bearish position as 60 min momentum indicator makes a bearish reversal. Downside targets are between 1180.5 - 1153.25.
Best of Trading

S&P Futures: Daily Wrap Up for November 8, 2010

The market made little progress in either direction today. This was expected as the wave pattern suggested that last Friday's close was a mature w.3. Today's price action either began a complex w.iv decline or it ended at the 1214.75 low. I have attached the 60 min chart to complement the weekly chart level that was presented in the Week In Review. Note that I have designated two sets of w.iv's. Since today's price action may not have completed w.iv, I can't project any w.v of w.3 of w.b termination targets. Regardless, once the correction is done, a new high should follow that will earmark the end of w.3, followed by a w.4 decline and another fresh high for w.5 of w.c of w.b (See Week In Review weekly chart archive)

One thing that clear is that the FED has manipulated the market again much like it did in late 2002 and 2003. The thought process is clear. Inflate and kick the can (the bigger problem at hand) further down the road. In the meantime, investors and traders alike love the backstop. They say, "Don't Fight the Fed". While this certainly has merit, the wave structure tells another tale. However, let me digress for a moment. It's true that most Elliotticians saw what was to be the largest collapse since the Great Depression go up in smoke. That's not poor technical analysis, it's market manipulation and now we have to deal with it. Bottom line: The decline that began as Primary w. 3 down has evolved. When market's evolve, as technicians we must transition from one pattern to another. We accomplish this by looking at alternatives and making our assumptions based upon what we are sure of. Here's what I am certain of based upon Elliott Wave Theory (see weekly chart) :

1. The decline from 1590.5 that terminated at 665.7 is a 5 wave structure.
2. Five wave impulse waves are always followed by three wave corrective structures that when complete are fully retraced.

Given this, the only question to be answered is how far the market will travel before the larger downtrend will resume. In the upcoming posts, I hope to provide some answers to this question.


Best of Trading

S & P Futures: Week in Review ( 11/1/10 - 11/5/10)

The wave structure is now exhibiting a new personality . One that no longer allows me to maintain a stance of looking immediately lower in a big way due to the fact that prices has now exceeded the upper corrective channel by a significant amount which usually signals the presence of 3rd wave price action. Secondly, a new recovery high was made that exceeded the April 4/26/10 high of 1216.5.  Elliott Wave rules state that w.2 can't exceed the origin of w.1, therefore I can no longer label the decline from 1216.5 as the start of a w.3.

Attached is a weekly chart showing my current view of the wave structure. Note my expectation is for another push higher followed by a decline that should be a sideways. The decline can't breach 1127.5 under the current interpretation.

In Monday's daily wrap up I will be discussing the upward potential of this new interpretation as well as possible alternative count.

Best of Trading

S&P Futures: Daily Wrap Up for November 3, 2010

From Monday's post, the wave structure called for a new recovery high. The combination of several somewhat positive economic reports, the election results and the FED's QEII announcement provided comfort for traders to push the market higher.

Bottom Line: Price made a new recovery high and has filled the gap (green resistance line) but market indicators and internals continue to lag. Conditions are ripe for the reversal that I have been calling for. However, I would be remiss if I didn't mention that the drop dead limit to maintain this wave count is the April high of 121650. So essentially, it's do or die for the Bears.

Here's the Market's position as of the close:

Momentum Indicators: OB on Weekly and Daily. 60 min chart is bullish but not in OB territory.


Pattern: final wave.v of wave.c of wave.2. W.2 may have completed with the new recovery high.
Time: No change from previous comment.

Trade Strategy: Looking to establish a bearish position as 60 min momentum indicator reaches OB, then makes a bearish reversal.
Best of Trading

Crude Oil #CL_F #QM_F Final Update

Price traded to a high of 85.375... just shy of my established target range of 85.5 - 85.925. Since making that high, price has traded back below key support of 83.875. Depending on how a trader managed the long term contract, either your stop was triggered or you trailed your stop as suggested and locked in even more profit. We now have wave overlap that signals that at least a short term top has been struck.


Best of Trading

Crude Oil #CL_F #QM_F Flash Update

Crude Oil continues higher and has now made a new recovery high. At this point it is prudent to move the stop to just below the last swing high of 83.875.






There are four reasons for doing so:

1. Once a new recovery high has been reached, the minimum requirement for a completed w.v has been established even though the wave count may/may not show a completed five waves up.
2. If w.v is still unfolding to upper targets (85.00 - 85.9250), then trade has no business below 83.875. If price drops below this support area, then wave overlap has occured. From a Elliott Wave perspective, this confirms that w.v had terminated.
3. Depending on where a trader entered the market, it locks in $1000 est. profit on the long term contract.
4. Placing a stop where the market tells me that I'm wrong i.e. looking for higher prices,  makes sense.

As a reminder, the wave structure is now very mature i.e. the risk at this point is greater trading the upside than down. While I still expect that the upper target of 85- 85.9250 will be met, my trade plan allows the market to take me out of the trade rather than exiting at a pre-determined area. This way, should price blow by the first target, I'm still in the trade looking for more upside. Traders may want to trail their stop with any further advance in price.

Trade Summary:

• Short Term Contract- Sold @82.025
• Long Term Contract - 1 contract long from 81.45
• Protective Stop - moved to 1 tick below 83.875
• Target : 85.00 - 85.925
• Trade Management: Manage the trade on your own by trailing the stop with any further advance

Best of Trading

Crude Oil #CL_F #QM_F : Flash Update

Crude Oil is making a run at a new recovery high as the trade plan and wave analysis called for.

Current Trade Summary: Assuming a trader entered near or at the termination of w.e as described in my opening Flash Alert http://elliottwavelive.blogspot.com/2010/10/crude-oil-flash-alert-for-october-29.html



Entry 2 contracts @ 81.45

Short Term Contract - Sold @82.025

Long Term Contract - Open

Protective Stop - moved to 1 tick below 82.675

Best of Trading

S&P: Daily Wrap for November 1, 2010

Not much has changed from what I posted in my week in review. I still am expecting volatility and a new high. A break below 1167.75 would negate the immediate upside potential. Should a new high be struck after the FED's announcement, I am not expecting a sustained rally. If so, my analysis of the wave structure is incorrect. If I'm right, there's plenty of downside potential to cash in on. Bottom line, I'm not to eager to jump right in. I've been this way for what seems to be an eternity by now. My patience will pay off.

Here's the market's position as of the close of today:

Momentum Indicators: OB on Weekly and Daily. 60 min chart was slightly bearish but held what typically is support in bull markets.


Pattern: final wave.v of wave.c of wave.2

Time: No change from previous comment.

Trade Strategy: Remain flat past news events but looking to establish a bearish position as 60 min momentum indicator reaches OB, then makes a bearish reversal. Price and the wave count should confirm a top is in place.

Best of Trading

Crude Oil: Flash Update II

Price has traded above the upper boundary of the triangle and the corrective channel. While a new recovery high has not been met, the wave structure looks impulsive. So far so good as price action is now confirming my analysis. You can read the first flash update at : http://elliottwavelive.blogspot.com/2010/11/crude-oil-flash-update.html

Best of Trading.

Crude Oil: Flash Update

On 10/29/2010, I posted a Flash Alert that expected a final push down to 81.325 (.618 retracement of the c and d waves) or a possible test the center line of the price chart. Thereafter, expecting higher prices after completion of w.e. I suggested that aggressive traders may want to consider an entry as w.e completes.

W.e terminated at 80.575, just a bit lower than the center of the channel line. (see chart) and have rallied near the upper trendline of the triangle. A break of this area is essential in confirming that my wave analysis is correct. Momentum is now OB so traders might consider setting up a risk free trade by moving stops up to break even for single contract trades. If trading multiples, consider taking profit on the short term contract and move the protective stop to break even. 

W.v Cluster Targets:

85.475- 85.925

87.8-88.325

Best of Trading