The Market Pulse

A Recap of last nights post. 

As I stated in last nights blog post, "yesterday's rally puts pressure on the count to perform to the downside tomorrow in a big way or it is appropriate to discuss some of the alternate counts. If you missed the call, click here.

Since the market didn't follow though to the upside and fell hard, my preferred count remains that of a  fifth wave decline while remaining nimble enough to recognize that the alternate counts presented in last night's blog post would be deployed should price exceed 1190.

And here is the 240 minute chat level. For tomorrow, the count implies a 3rd of a 3rd and therefore we MUST see a duplicate of today's price action (hard down) for the count to remain on track.

Note: I'm not going to mention any downside targets until I have confirmation that the preferred count is correct. We know at a minimum that the market should draw to new lows which is 52 points lower than today's close. We have plenty of time to fine tune any further downside potential.


Let's see what happens.


Best of Trading

Updated Chart of ES_F

In last nights edition of the Market Pulse, I left readers with this chart. As I mentioned the wave structure and depth of the rally was bothersome, yet I decided to stick with the count as it appears on the chart.

While I felt that 1166 - 68 was a high probability level for the terminus of w.iv, given that most corrections don't exceed the 1.618 of w.a of the structure and that the count would be invalidated with a print above 1185... the w.i low (red dashed line).

During today's session price not only exceeded the cited fib levels, but almost hit the .786 retracement of 1191.75. This puts pressure on the count to perform to the downside tomorrow in a big way or it is appropriate to discuss some of the alternate counts so that we can be prepared for any further upside potential.

First, the wave pattern from the w.3 low is clearly sideways and NOT impulsive.  I have a great deal of confidence that what we are witnessing is just a correction  and .... when complete, will be fully retraced.  

Since there is a great deal of noise on at the 240 minute chart, I referred back to my daily chart and noticed that I could also make a case for the following two counts:

A flat w.4 or w.(2).

Each would allow for a w.c =w.a @1239.5.

Let's see what develops tomorrow. Expect further commentary on these alternatives as well as a recap of what transpired in tomorrow's edition of the Market Pulse.



The Market Pulse

Today's price action brought uncertainty to the wave count. After hours of deliberation, my preferred count shall remain w fifth wave decline but the magnitude of the move from w.iii blue low is deep and appears to be incomplete. Look for upside potential to 1168.25.

Dropping to the 7200 tick chart, I've labeled the subdivisions from w.iii low where the market is making a (W)-(X)-(Y) where w.3 circle red is complete and I'm looking down in the ON session followed by another push that completes at 1166.

While I am cautious this market, the overall short term wave count suggests that 1166-68 is a significant area to watch.

Let's see what happens and remain flexible until market either tips it's hand that the next round of selling has begun or whether a suitable alternate wave count is necessary to explain price action.

Best of Trading

Heard on the Street: S&P, DAX, CAC40, Crude Oil, Silver, Nasdaq

Announcements:

Over your investment and trading career, I'll bet you've subscribed to a few newsletters. While there may be several reasons for doing so, one thing that bothers me about a service is that there's allot of filler content. If you're like me, I just want the meat and potatoes and hold the veggies! Put another way, just show me the charts. 

As most of you are now aware, I'm building a new website that will better serve a community of elliott wave traders and enthusiast. My content and the way I present it is ever evolving and in this weeks video I will be providing a more comprehensive overview of  the global markets. While I'll spend less time on each market, the multiple time frame charts and analysis is broken down with elliott wave labels and concise commentary.

I'd like to get some feedback from readers as to whether you like the shortened version that gives you just the counts vs my previous more detailed explanation of how I arrived at the wave count. Which is more important to you?





Tags: Heard on the Street, S&P, DAX, CAC40, Crude Oil, Silver, Nasdaq

Flash Update: ES_F

Last night I told readers that 1228 was the key downside level to watch. Based upon the ON session, the opening gap and the fact that price has traded below 1228  increases the odds are that the triangle interpretation will be eliminated and the other working interpretation ( a fifth wave decline) has prevailed.

At the 60 minute chart level we can see how price has touched the lower boundary of the price channel and that I'm working a w.iii circle count. However, just because I count it as such doesn't mean that I can confirm it due to the fact that price has yet to confirm the presence of a third wave i.e. by pushing through the lower boundary of the channel. Once it does, odds are that the internal structure is properly labeled and that an initial target of 1066 should be reached.

Let's see what happens.

The Market Pulse

Humpty Dumpy Sat on a Wall...

Humpty Dumpty Had a Great Fall

Excuse me for finding humor in today's delayed  FED announcement but by judging all the twitter comments, it seemed that most traders were sitting on the edge of their seats waiting for all the King's Horseman and all the Kings men to put Humpty Dumpy back together again.

The delay in the FOMC statement must have been due to the fact that Ben Bernanke, the King of the helicopter, was playing the nursery rhyme for minutes before the actual announcement due to the fact that he knows he has failed and the CNBC market headlines now read.... " Economy in Congress's Hands as FED Runs Out of Bullets".

So while Congress, the King's Men, try to put Humpty back together again, we wavers simply laugh and find the trading answers right on the charts.

The Nasdaq

Sunday's Heard on the Street video , subsequent edition of the Market Pulse and Before the Bell update, laid out the expectations calling for a top to be made in his market. If you want to see the progressions of analysis, I'd recommend reviewing those calls as the the top was nailed. The above chart is updated though today and by all indications, the Nasdaq has fallen off a wall.

While encouraging that w.(iv) support has been breached, to bolster the bearish case, I'll need to see price trade below w.(i) crest of 2201.5 and ultimately a break below w.x circle of 2108.25 to completely put a fork in this market.  As a reminder, price action should confirm the count and trade should be impulsively to the down side in fast turnover as the count indicates that we're in a 3rd wave... the most violent and destructive wave within a five wave sequence.

And here is a 7200 tick chart. Notice I'm working w.3 of w.(iii) down and I'm setting critical resistance at 2280 to maintain the bearish view that minor w. 3 red is underway.  As long as this level holds, expect the Nasdaq to lead the other indices lower.


S&P


Both scenarios that I laid out in Sunday's edition of Heard on the Street are still viable and as I mentioned that the move down from 1214.5 would determine which interpretation was correct.

Below are the two interpretations in no certain order of preference:

Price is approaching the 1148, ideal target for w.d circle which would be followed by another three wave advance to complete the triangle and w.4 red. While a decline below 1148 would not directly negate, prints below 1228.75would (see below).

A break of the corrective price channel would bolster this view and a subsequent close below 1128.75 would effectively eliminate the triangle interpretation.

Best of Trading

Before the Bell: Updated Chart of Nasdaq

From last night's edition of The Market Pulse, the above chart was presented. As you can see price has reached my target. Please refer to my original post for further details as additional upside may exist.

Interestingly, the emini S&P traded down last night and as I woke, found that a reversal has been made. To say the least, the move has got me on the edge of my seat. However neither market is confirming the other leaving this early strength questionable.

I'm watching for a bullish trap in either market.

let's see what happens.

Before the Bell: Updated Chart on Copper

This update is a follow up to my call that was made on September 11, 2011 in my weekly edition of Heard on the Street.

At the weekly chart level, price has confirmed that the next phase of heavy selling is underway as the w.1 circle extreme was taken out in five waves (see daily chart below).

My current interpretation is that w.3 circle is underway and minor w.1 red has completed and a choppy, counter trend move will develop lasting to at least 9/27/2011, possibly into the early pat of October. Preliminary termination points are where w.2 = .5 w.1. I'll tighten up the target once w.(a) and w.(b) of w.2 are complete.

Once w.2 is complete.... the market should fall in a 3rd of a third (see chart progression) that eventually reaches the w.3 circle low of 305.5.

Best of Trading



The Market Pulse

In yesterday's edition of Heard on the Street , I detailed a likely scenario for the Nasdaq, that I think it is worth reviewing, in that, the market and it's wave structure was clear to me. My point being, why do traders struggle and beat their heads against the wall trying to figure out what a particular market's position is? Why not trade by finding easily recognizable patterns and then trade your plan?

Let's quickly recap the call and what transpired before moving on to the S&P.

Above is the chart that I left readers with looking for a decline to 2252.50. Prices decline to 2254.25 and then rallied to new highs. The new high fulfilled the minimal requirements for w.(v). The fact that price has broken back below the w.(iii) crest could be problematic for achieving any further upside, especially as the DOW and S&P do not confirm such behavior, yet....



.... at this juncture we can't rule out the possibility based upon this chart. I"m not going to rehash the material and the case for further upside (See Heard on the Street for more detail). Breaks below 2254.25 would most likely indicate that w.(v) of w.2 red had completed.


S&P

A Triangle

Today's price action didn't bring any clarity to the picture. Several interpretations remain, the top two being that w.5 is underway or a w.4 triangle is still unfolding. The above chart shows the triangle interpretation. Notice that I've identified the wave structures in 3 waves where w.(c) of w.d circle = w.(a) at 1170.25. This is my minimal target expectation with further downside to 1148 where these first three legs would represent a larger a-b-c consistent with the 240 min time frame (see below).

A Fifth Wave Move

The move from the w.ii crest can also be counted as a perfect impulsive wave. I haven't labeled the internal subdivisions but w.iii = 1.618 w.i and w.5 = .618 w. {i-iii} if you do your homework.

Regardless of which interpretation is correct, both views continue to look down, consistent with yesterdays call. At the time of this post, the market is down 8.25, a good sign. The next move down will determine which count is right.

If the w.5 count is correct, then the ON session and tomorrow's trade will be relentlessly down on fast turnover. If it isn't, then odds are that the triangle count is more likely.

The key takeaway from each interpretation is that eventually, price should carry below 1097.

Let's see what happens.




Best of Trading

Heard on the Street

A Week of Confusing Price Action

Yesterday I spent 6 hours looking at multiple markets and concluded that there's allot of difficult chart patterns and questionable wave counts. Complex corrective phases are often the culprit, offering uncertainty until the wave pattern is nearly completed.

In this weeks video, I'm updating you with my counts for the emini S&P, Euro and Nasdaq.

Best of Trading

Subscriber Request : EUR-USD

At the daily chart level the Euro is tracing out an impulsive w.C of w.(a) of the larger weekly W-X-Y (Double Three) or contracting triangle pattern. Preliminary targets for w.5 of w.C of w.(A) completion are 1.3272- 1.3429.

Note:  w.C = w.A @ 1.3439 (not shown on chart). Breaks above 1.4047 invalidate this count.

Put it all together by watching this weekends edition of Heard on the Street.

Best of Trading

Updated Chart on ES_F

Here's a possible count detailing price action into the 1210.75 target. Price has traded slightly beyond this key level. With technicals weakening and a bearish shooting star candle that will confirm at 10:30, odds favor a possible reversal here. Breaks below 1181 would bolster the case.

Best of Trading

Before the Bell: More Manipulation of Markets

Announcements:

As a result of my ongoing efforts to build my new website, some readers may have noticed that my intraday Tweets and content posting has been cut back to just M-W-F. I appreciate your understanding and patience.

When my schedule permits, I will make every effort to follow the market intraday and make blog entries.


The Emini S&P:

Here's a quote I read from the Associated Press, "Global stocks remained buoyed by the decision of five top central banks to provide unlimited amounts of dollar loans to the banking sector, easing one of the concerns driving the recent turbulence in financial markets of late."

While this persistent manipulation is frustrating in that it blows up short term wave counts.... it doesn't change the larger degree bearish view.

In Wednesday's Market Pulse, I features two existing elliott wave counts, of which the chart above was invalidated  on a break above 1199.75.

However, as in any corrective structure, there are still multiple ways of labeling the structure and often the count is unclear, sometimes until it's complete. This is why attempting to trade a complex structure can be hazardous to your account.

In this weeks edition of Heard on the Street , I'll be showing how the intraday price action still fits within the larger degree bear trend. Until then....

... here is the other interpretation, the contracting triangle. Notice how I was looking for a decline yesterday that never materialized and the wave structure continued to subdivide. Thanks Central Bankers!

Here is the updated chart through yesterdays close. The ideal target remains where w.c circle = .618 w.a circle at 1210.75.

Technicals already show divergence therefore the wave structure at this juncture is mature. Let's see how the lower intraday time frames look at the open.


Best of Trading

The Market Pulse

In Monday's update, I left readers with two interpretations... one where w.5 was underway and the other had w.4 red unfolding as a possible triangle (see chart below).

In both interpretations, I told readers that I expected the market to push higher (see here ) and it has.

The first chart represents the w.5 interpretation and has been updated through the close of the daily session. Should this interpretation be correct, there will be no guessing tomorrow or in the ON session. Price will fall impulsively and in a thrusting manner.

Should this not occur, odds are that the triangle pattern is playing out. If so, price will fall either in the ON session or in tomorrow's trade to approx. 1143.25 setting up a rally where w.(c) = w.(a) at 1210.75.

And finally, here is the 5 min. chart level where I Tweeted, " watching 1194.25 for c=a " The actual high printed just beyond this key level. The low represents either w.b circle of the triangle or w.(i) of w.iii circle of w.5 red. Let's see what develops.

Best of Trading

The Market Pulse

In Sunday's edition of Heard on the Street, I showed this 240 minute chart, as a W-X-Y w.4 red. You'll note that I have only made some degree changes i.e (w)-(x)-(y).

In that video, I said that I had to allow for further upside potential as long as price remained above the lower boundary of the corrective price channel and 1138. Although not on a closing basis, today's price action price was significant and does support the current labeling. For tomorrow, I'm looking up to complete w.(ii) at the 70-77 retracement levels.

However, if you've followed me long enough you know I'm big on having the wave personality match the pattern and today's closing bar is a large bullish engulfing pattern that engulfs several bars. That just doesn't sit right with me. Call it intuition but since I'm looking up with the preferred count, I'd like to offer an alternate count that still would fulfill the rules of alternation for corrective patterns.

I've laid out this elaborate count with the anticipated levels for waves, c,d,e circle of a triangle that will be followed by another round of selling to complete w.5 down.

In conclusion, whether w.4 is complete or still unfolding,  the probability is extremely high that an intermediate bottom is yet to be made.

Let's se what happens tomorrow.

Best of Trading

Heard on the Street

In this weeks edition of Heard on the Street , I'm going to take a look at the emini S&P, Copper and the DAX.

Watch this video as I'm sure the coming weeks will be pivotal for each of these markets. More economic data comes out this week that may show that the economy continues to contract. The chart of Copper, a proxy for economic activity, is already flashing warning signs. As you will see, I fear the worst is yet to come.

The Market Pulse

In last weeks edition of Heard on the Street, I left readers with this chart. I've added channel lines tonight. Notice that in both the impulsive decline and the corrective rally from w.3 red, price remains within their respective channels.

In the case of the latter, the move from 1138 appears to be impulsive and deep which causes concern for the overall count from w.4 red. Yet, as long as price remains within the corrective channel, the structure should be assumed to be corrective.

Drilling down to the intraday chart level, I have two counts. Both counts are looking down if w.a circle is complete that will be followed by another up sequence to complete either w.ii circle or w.Z of a triple three. The difference between the two patterns can be distinguished by the depth of the rally whereas:

• w.ii circle can't exceed 1229.75 and
• w.Z will exceed w.4 red

....and both , when complete will be fully retraced and resolve to new lows.



Let's see what develops tomorrow.


Best of Trading

Chart of the Day: XBI

A Bearish Warning

The stock market has fallen hard since May 3, 2011. Most sectors and stocks never escape the claws of a bear market. Today's chart of the day is ticker symbol $XBI , the S&P Biotech ETF. The chart, in my opinion, provides a warning that the resumption of the bear trend is underway in the Biotech sector. It also clearly illustrates an ongoing five wave sequence.

At the weekly chart level, XBI completed cycle w.b at $75.93 and fell hard along with the broader market. To date, three waves have been completed, possibly four if w.(4) doesn't turn into a complex pattern.

If the interpretation is correct, and w.(4) is complete, then price should  make a new low to where w.(5) = .618 w.{(1)-(3)} at $51.32 to complete w.1 circle.

As the wave pattern and count suggests, a long term bearish view of this ETF would be appropriate that eventually draws price well below w.a ($42.95).

I'll be making periodical updates to this post for those readers who are interested in following along.

Best of Trading

Before the Bell: Updated $ES_F Chart

At the 120 minute chart level, price has challenged the lower boundary of the corrective price channel. If this interpretation is correct, a decisive break will occur that draws prices to new lows.

And here is my current elliott wave count for the decline that began at 1229.75.  I'm giving this count some wiggle room as there are other ways to count this (see ALT) but I believe that the triangle w.4 red breaks up the subdivision of w.(3) well. The depth of the counter-trend rally that is currently taking place should confirm the count. If correct, I do not expect price to print above the .50 retracement level. Should price make a much deeper retracement, but not exceed 1207.5 (the invalidation point for the overall interpretation), then most likely the ALT count is correct.


Let's see what develops.



Best of Trading

Heard on the Street: Do you trade what you see or trade what you think?

Do You Trade What You See or Trade What You Think?  

ANNOUNCEMENTS:

• This weeks holiday edition will only focus on the emini SP Futures as I want everyone to know where this market is headed and the supporting evidence that leads to my conclusions. The videos will return to following several markets in the week ending 9/10/11.
• By way of keeping you abreast of the progressions of my work... my blog-site has simply outgrow itself, has it's limitations and can't best serve the community of EWL 's followers.  As a result, I'm excited to share with everyone that I have formed SINIBALDI ANALYTICS, a private financial and investment publishing company and content provider of "The Market Pulse", "Heard on the Street" and "Global Gains" newsletters. The company is also engaged in providing educational trading services to long and short term traders.
• I have begun working on the website www.elliottwavelive.com . The site will maintain access to free content, educational resources, the blog, a forum and offer premium services. Look for updates soon.

Before The Bell: Updated $ES_F chart

Last night I left readers with this chart and I'd like to expand upon the subdivisions of w.(v) which at the time didn't count well. Well I slept on it and with a fresh pair of eyes, I decided to look at additional chart levels to gain more confidence in the fact that w.iv circle had ended.

Here's my findings:

At the 360 min. chart level the wave pattern from 1193.5 looked like an ending diagonal which as you know is a terminal pattern. Also note the selling pressure that came in right at my 1227-28 target as shown by the long upper tail of the candle. This bodes well for the previous conclusion that w.iv circle had ended. Yet I wanted to dig deeper... looking at tick charts to get a birds eye view of the subdivisions.

From w.(iv) low, I can count a series of 3's for each subdivision of waves {i-v}
of w.(v). Subsequent price actions counts well, working w.(iii)  but I'd like to see another down sequence to complete w.1 of w.(iii) for the count to remain on track. Of course the market doesn't care what I'd like but it would be great if it would oblige me!

Ultimately 1193.5 needs to be broken for the bears to really get excited.

Let's watch the open.

Best of Trading