How To Use S&P 500 Elliott Wave Scans to Spot Opportunity

Every day I compose and publish a list at www.mikesinibaldi.com of S&P 500 stocks that have the greatest percentage increase above their average volume in the past 30 days or that exhibit gaping characteristics within elliott wave patterns. Usually, these traits are a sign that institutions may be buying or selling stock and make a great list of stocks to watch for further investigation.

Today I'd like to show you how to effectively use those scans with a most recent bullish candidate.

Click here for details.

Best of Trading

$SPX: Update Proposed Count

The following charts are an update to my initial count make at : http://bit.ly/OTVgK6

Under this interpretation, a print above 1433.59 before reaching downside objectives would negate the wave labeling, however, downside pressure remains so long as 1433.90 is maintained. 

Let's see what happens.  

Best of Trading

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ElliottwaveLive is not an investment advisory service or broker dealer. None of its contributors are registered investment advisors, licensed stock brokers or CTA's. The author may hold short term and long term positions in the futures, stocks and ETF's discussed herein. The author may also trade around those positions which may be in direct conflict with your positions. Complete trade disclosures of the contributor’s holdings are posted at www.elliottwavelive.blogspot.com. See Trader Disclosure. 

Trade at your own risk. The blog site, Newsletter and all other information, material and content accessible from this Site (collectively, the "Content")  provided herein provides the context for market analysis with respect to a market's, a security or a commodity's general position utilizing the Elliott Wave Principle. The Content contained herein are the opinion and general comments of the author and is based upon information that Mr. Sinibaldi considers reliable but neither ElliottWaveLive nor he warrants it's completeness or accuracy and it should not be relied upon as such. Mr. Sinibaldi or ElliottWaveLive (collectively, referred to as “EWL”) are not under any obligation to update or correct any content provided on this website. Any statements and or opinions are subject to change without notice. The content and comments contained herein neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. 

A more and comprehensive Risk Disclaimer and Disclosure Statements is available within the left margin of this blogsite.   

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Fair Disclosure Notice: I do not have a position in any of the aforementioned futures markets or securities related to this article. 

$SPX :Proposed Count

At the present time, the decline that has unfolded from the 9/14/2012 high is in my opinion a three wave correction that is incomplete. 

Presently the 5th wave of w.(iii) is subdividing and should complete with one more push to the downside that will be followed by another up, down sequence to complete the correction.

Note: Drawing is not to scale.  

Best of Trading

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ElliottwaveLive is not an investment advisory service or broker dealer. None of its contributors are registered investment advisors, licensed stock brokers or CTA's. The author may hold short term and long term positions in the futures, stocks and ETF's discussed herein. The author may also trade around those positions which may be in direct conflict with your positions. Complete trade disclosures of the contributor’s holdings are posted at www.elliottwavelive.blogspot.com. See Trader Disclosure. 

Trade at your own risk. The blog site, Newsletter and all other information, material and content accessible from this Site (collectively, the "Content")  provided herein provides the context for market analysis with respect to a market's, a security or a commodity's general position utilizing the Elliott Wave Principle. The Content contained herein are the opinion and general comments of the author and is based upon information that Mr. Sinibaldi considers reliable but neither ElliottWaveLive nor he warrants it's completeness or accuracy and it should not be relied upon as such. Mr. Sinibaldi or ElliottWaveLive (collectively, referred to as “EWL”) are not under any obligation to update or correct any content provided on this website. Any statements and or opinions are subject to change without notice. The content and comments contained herein neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. 

A more and comprehensive Risk Disclaimer and Disclosure Statements is available within the left margin of this blogsite.   

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Fair Disclosure Notice: I do not have a position in any of the aforementioned futures markets or securities related to this article. 

ES_F Update:

The Manipulators Have Struck Again!

Over the past few days, the governing bodies of Europe have successfully talked up the markets, in particularly,.... Friday's price action was ridiculous! Yet, if readers had been watching my tweet stream, on July 24, I tweeted, " ES_F currently at 1319.5-1320.75 support . If it fails we could see a slide to 1305."


Support actually held and the market hasn't looked back. Two days later, Mario Draghi manipulated the market with his comments to support the Euro at all costs. Friday, more chatter and the market exploded (see chart). The simple fact is that the US equity market response to economic news has increased dramatically!

The above chart is the last chart that I left readers with. Read more about my initial thoughts made on July 18, 2012. 

I have modified the wave labeling and included a price channel. The initial failure to achieve 1397.5 from the 7/19 high of 1376 brought initial concerns to the wave count. The subsequent decline heightened my level of concern when 1320 held (see previous comments above), to end w. (b). The advance from w.(b) low has extended beyond the corrective price channel and suggests the presence of a third wave. As such, it would be difficult to maintain an corrective stance to 1397.5 as price would clearly remain outside of the channel to meet my initial projection where w.y = w.w @ 1397.5. Therefore, I'm updating the possible scenarios that I'm paying particular attention to. 


Note: These patterns below are subject to multiple interpretations which may require further development in order to conclude that any particular pattern is of higher probability than the others. 

1. First, I think it's important to actually look at the CASH market. Here is a possible leading diagonal scenario that would explain the initial advance. You'll notice that there is a clear distinction between the emini contract high on 7/19 and the CASH.  The price objective at 1399.48 would only be applicable IF the July 19 high of 1371.21 is w.A and where w=C of w.2 = .618 w.A. Complicating matters is the thrust from the 7/24 low.... w.C should not have an increasing slope when compared to w.A. Therefore, this scenario is suspect.  

2.  Under scenario 2, the leading diagonal is now labeled w.1 and subsequent price action should follow the script laid out. IMO, the test for this scenario occurs on any meaning full retracement. To maintain this wave count, critical support of 1329.24 can't be violated.

3. Finally, I'm keeping in mind that this larger quarterly pattern may be applicable and what we are seeing right now is the beginning of a five wave sequence to end w.d.


Let's see how things develop. 




Best of Trading

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ElliottwaveLive is not an investment advisory service or broker dealer. None of its contributors are registered investment advisors, licensed stock brokers or CTA's. The author may hold short term and long term positions in the futures, stocks and ETF's discussed herein. The author may also trade around those positions which may be in direct conflict with your positions. Complete trade disclosures of the contributor’s holdings are posted at www.elliottwavelive.blogspot.com. See Trader Disclosure. 

Trade at your own risk. The blog site, Newsletter and all other information, material and content accessible from this Site (collectively, the "Content")  provided herein provides the context for market analysis with respect to a market's, a security or a commodity's general position utilizing the Elliott Wave Principle. The Content contained herein are the opinion and general comments of the author and is based upon information that Mr. Sinibaldi considers reliable but neither ElliottWaveLive nor he warrants it's completeness or accuracy and it should not be relied upon as such. Mr. Sinibaldi or ElliottWaveLive (collectively, referred to as “EWL”) are not under any obligation to update or correct any content provided on this website. Any statements and or opinions are subject to change without notice. The content and comments contained herein neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. 

A more and comprehensive Risk Disclaimer and Disclosure Statements is available within the left margin of this blog site.   

The Market Pulse

What a day today was. This daily chart level of the $SPX shows that the decline gained momentum, as measured by by the ROC. Volume was the highest since 5/2010 and has been increasing from 1346.1, a clear sign that institutions are dumping shrs (distribution days) at an alarming rate.  In such cases, one doesn't want to be in front of that train wreck.

Here is the chart I showed in this weekends video. I  had mentioned that I was taking a more conservative approach by using a less aggressive wave count and that I didn't think that the market would make another low UNLESS the move was a fake out.

Clearly, the failure of the market to make a larger w.4 bounce indicates that a more aggressive count is in order. W.3 red is the extended wave of w.(1) {not complete or shown} but determining which wave is extended within w.3 of w.(1) is practically impossible to identify at this juncture. My best guess, is that the market is still subdividing within a 3rd of w.3 as the past two trading sessions were the steepest declines and traveled the greatest distance in the least time. The technicals show above seem to confirm this opinion.

BOTTOM LINE: As soon as I can identify a significant turn, I'll discuss it's implications as well as provide an updated wave count. Until then expect the market decline to continue, even though it's severely oversold. 

Best of Trading

Heard On The Street : Panic and Chaos

ATTENTION: New readers and loyal subscribers....

...Imagine the chaos and panic that may hit world markets --

 then decide how you'll protect your money on Monday...

Traders,

The past week has certainly been challenging to say the least and after the S&P downgraded U.S. debt, any glimmer of hope that traders had at Friday's close may evaporate.

What if the market is unable to catch a bid come Monday morning? Watching the market free fall without a plan to protect yourself won't be fun. After all, most portfolios haven't recovered since 2007 and the losses could be much greater this time around.

Since my July 17, 2011 call , I’ve been warning readers that the end of the bear market counter-trend rally was coming. In fact, my 2007-2011 analogy of the emini S&P demonstrated the fractal nature of the market, how the pattern would progress and the targets associated with the call. In fact, I've sent out multiple updates on Twitter and through my Monday- Wednesday-Friday blog posts keeping you abreast of the markets. 

I'm guessing that subscribers like you either protected yourself from the market's recent carnage or were already prepared to discuss it with your investment advisor and take advantage of it as a result of my forecasts ...

... but if my forecast didn't raise your eyebrows because you don't realize the benefits of Elliott Wave Analysis I can only hope that the events of this past week will change your mind.

Thursday’s 512 point Dow and 60 point S&P loss was just part the beginning, not the end. And if you are a bull, the losses you’ve taken so far could get much, much worse. 

What if you had know in advance, like my readers, that my target level for the S&P was 1166? What if you had that number in your pocket since the July 30, 2011 call and that the level was briefly surpassed on 8/4/2011 before staging a minor reversal.

It’s not too late for you to realize the educational benefits that I provide and the power of the Elliott Wave Principle. Sitting on your hands and waiting for the Central Banks around the world to come up with another ingenious plan is the worst move you could make.

Introducing Signal Watch RT  ® -- a premium service -- providing insightful, real - time intraday elliott wave analysis

There's one request that I've heard from readers again and again and that's more live, hands - on real-time wave analysis. Now if that sounds like something you might want to hear more about, Signal Watch RT ®, may be the solution you're looking for. You'll know what the market is likely to do and when it is likely to do it.

Next month, watch for a complete list of features and benefits and pricing but today I want to thank you personally for joining our community of  Elliott Wave Live readers. Roll up your sleeves, lock the door behind you, watch the video below NOW, then peruse my achieves (lower bottom right fold) and join my blog if you agree that my work is insightful.

Best of Trading,

Mike Sinibaldi 

Heard On The Street

ANNOUNCEMENTS:

1. You'll notice a few changes to my video productions. I'll be adding a table of contents so that readers have the choice of either viewing the entire video or select specific areas of interest.
2. I'd like to thank everyone who provided feedback on my blog. Of those comments, here are a few requests that I would explore further.

• Several readers have asked for more intraday forecasts of the ES futures market's direction. What other Markets would you be interested in receiving on an intraday basis?

• What is the best method of providing intraday forecasts? Flash Alert or Live Trading Room?

Please comment directly to this feed if you have a google account or send a Twitter direct message to @elliottwavelive .


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THE MARKETS:

The broader US indices have decline for six straight weeks. News headlines have quickly soured and concerns about a global growth slowdown remain. The Nasdaq and the Russell 2000 both turned negative for the year and there's just not buying interest at this point.

The question remains... are we witnessing a correction or an escalating situation that could lead to another crippling economic downturn? To find out, watch this weeks video edition of Heard On The Street.

Heard On The Street

In this weeks video edition of Heard On The Street, I'll be reviewing the monthly and daily charts of ES_F and $SPX as well as revisiting the chart of the Gold/Oil Ratio.

Enjoy.

Heard On The Street

In this weeks Edition of Heard On The Street, I take some time to explore the cyclic behavior of the S&P and present a bearish and bullish case for the upcoming week of trading. Watch this video to learn where the market may be headed and why.


Best of Trading

The Market Pulse: NASDAQ and S&P

The Market has virtually no net gain or loss since March 2, 2011. By now every trader has their eyes on what appears to be a triangle pattern. With tomorrow's jobs report, traders may finally push the market in the direction of the "new" near term trend. So look for some volatility tomorrow.

Earlier today I tweeted that the NASDAQ was the weakest of the indices. I think it's important to cover this market since the greater possibility exists that the NASDAQ may lead the other markets down. Price has tested the 50-sma on five occasions. A print below 230625 would have further bearish implications, yet support is lurking just below the market at 2303 and 2281 - 2282. I wouldn't doubt that a stop running exercise will unfold. Should any sell off have substance, my near term target is 2258.

Turning my attention to the ES_F market, you can see that the market is yet to challenge the 50-sma and price is oscillating along the lower elliott channel line. As a reminder, a significant break of this line on a closing basis and a print below 130275 would negate any idea that a triangle was unfolding. Keep in mind that the March contract expires so the equivalent in the June contract is 129825.

If the wave structure is a triangle fourth wave, then w.e circle may have been struck at 1312.27 that was  followed by a minor five wave advance and as of the close... a choppy second wave is developing. This interpretation would be confirmed with a print above 1325.74. Thereafter, price will make a new recovery high to beyond 1344.07 in the $SPX and 1343 in the ES_F.

In conclusion, tomorrows trade centers around 1325.74 (bullish) and 130275 (bearish) in the continuous contract or the equivalent in the June contract is 129825 (bearish).


I hope you found this information helpful.

Best Of Trading

The Market Pulse: USD, Commodities and ES_F

So, the political unrest in the Middle East has spooked the Market. If you watched my weekly video featuring the S&P, Gold, Oil and Copper... the only minor surprise was that the S&P turned tail a bit below my target area of 1346.25-1347.25.  I've received many e-mails from subscribers asking if I'm still looking higher or whether the top has been made for the year in US equities.

Here's a hint! It's still all about the US Dollar.

For many weeks, I have spoken about the "all in one" concept where commodities and equities move inversely to the USD. Above are the charts of several commodities and their inverse relationships to the USD. You might argue that my case is weak as several commodities such as Copper, Soybeans, Corn and Wheat are on the decline even as the UDS falls.

I offer the weekly chart of the CRB Index that shows that the larger degree trend is still up and the only reason for the short term disconnect between the USD and commodities is due to the the w.(4) decline. Thereafter, commodities will resume their assent. Could a case be made that the top is in, i.e. w. V (green)? Certainly, but we don't have any evidence to support such a claim. There are no trendline breaks, nor violation of structural support. We have to look higher.

That brings me to my opening statement regarding the USD's role in anticipating a trend change in equities.

BOTTOM LINE: The USD continues to coil. When markets continue to go sideways, and you have to force a wave count, you're asking for trouble. There is no way that I can make a bullish case for this market if a triangle is forming. At best, I see an advance to w.e and then further selling pressure.  Without a break of 86.55, I remain bearish on the USD. If my analysis is correct, that implies that the run in commodities and equities MAY NOT BE OVER!!

The Market has a habit of inflicting maximum pain to market participants when nobody expects it. When you think about all the manipulation that is going on, how fitting it would be to run stops of all the late to the party bulls and then turn right around and burn all the Bears that re-entered the market thinking that the market had made a major turn.  I'm keeping this thought in the back of my head as the wave structure unfolds to the downside.

When a market weakens, watching market leaders can tell us allot about the health of a market.  Leading stocks like AAPL, NTFLX, and AMZN have struggled this week. NYSE volume rose across the board, logging back to back distribution days in the S&P and DOW. Since Jan. 1, 2011, there have been 7 distribution days indicating that institutions are selling.

So here's how I'm viewing the market. The market has made an initial five wave decline. Since there are no channel lines and structural support that have been broken, I can't fully embrace the fact that w.2 circle has ended. I've labeled the chart accordingly. 

Here are the internal subdivisions of the recent decline. Regardless of whether a top is in place, what's important is that I am expecting a countertrend rally in the ON and daily session. Look for failures between 131850- 132025, followed by another round of selling.


Best of Trading

Heard On The Street

The last time we spoke I was looking for a new high in this market. Friday's price action carried the market to a new high... one that reached the targets stated in the 2/9/11 post of 1326.75 - 1329.25. If you review that post v.s. the wave count that I have presented here tonight, you will notice that I have changed the substructures of w.5 (red) to reflect greater proportionality between waves w. ii (purple) and w.iv (purple). Notice that the declines are harmonic in both price (14.03 and 13.07) and in time (15 and 14 bars) respectively. While the last few price bars from w.iv (blue) can be counted complete, I think that the market will extend higher in one final push.

Should the market extend higher it is important to note that currently w.(iii) < w.(i), therefore, w.(v) can't extend further than 1341.8 in $SPX and 1340 for  ES1-057 or w.(iii) will be the shortest wave and that would break the rules and guidelines of EWP. So from a trading perspective, we now have our lines in the sand where price MUST reverse or the count is incorrect.

We'll see what this week brings.


Best of Trading

The Market Pulse

The last time we spoke on 2/7/11, I was looking for a decline on Tuesday to complete w.iv of w.(v) and for w.v to terminate between 1326.75 - 1329.25. The market traded near my targets to 132225 and leading up to today's market open, the Million Dollar question is whether the 132225 close completed w.5 red or if w.i circle completed and the market will continue to extend and subdivide as I have labeled the chart.

(As a reminder, I do not trade first waves after a top or bottom as they are dangerous... especially if you are wrong. I use first waves as confirmation that a trend change has occurred. As such I need to see a five wave decline to get bearish. )

A promising open had me looking for confirmation that a top was in place. As the day unfolded several waves began to overlap and when I compare the ES1-057, ES-057 and the $SPX at the 60 minute chart level , I am unable to confirm with certainty that a top is in place.

The clearest wave count I have is on the 30 min. chart of $SPX. Here I've identified the wave structure from the w.iii crest as a completed w.iv. If this wave labeling is correct, we should see a new high tomorrow.

However, I can easily make a case for an alternate count whereas today's price structure was a leading diagonal... w.i circle.

Finally, here is the ES1-057 contract. Again, I've labeled the structure as a completed w.iv and expect a new high.  If w.v of w.(v) = .618 {waves (i-iii)} then the termination point is 132925 which is the same level that I called for on 2/7/11. Also note that the bollinger bands have contracted and that is an indication that tomorrow could exhibit volatile price action. So be alert for a directional trade set up.

As always, I'll let the price action tell me if my labeling is correct or incorrect. A decline below 131175 in  ES1-057 and 131489 in the $SPX would mean that a near term top had been struck.

I hope you found this update informative.

Best of Trading