S&P Futures: Pre Market for September 7, 2010

Looking for confirmation that a tradeable top is in place. Trade closing Friday's gap (1090.5) in an impulsive manner would be what I need to see to act.

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S&P Futures: Pre Market Analaysis for September 3, 2010

Jobs report just came out and the futures are flying higher. Does anyone think that the market manipulators get the reports before us? Of course they do.

At the time of this post, the market seems to be challenging the gap established on 8/11/2010. I don't know if the market has the muscle to close it but the thrust off of 1039.25 appears to be too strong for the current count.

Open interest and volume over the rally continues to fall ... so technicals still indicate that shorts are liquidating positions. This is only a corrective wave structure. Once this rally exhausts itself, trend should resume down.

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S&P Futures: Market Wrap for September 1, 2010

The market certainly didn't cooperate in holding below 1054.25. The previous interpretation was incorrect. Structurally, the price action is still to be viewed corrective but it appears that my comments on August 31, 2010, i.e. " keeping the possibility of a larger upside correction on the table" are unfolding. Today the market traded impulsively. The attached chart includes the new internal structure. While we have satisfied the minimal requirement to count 5 waves up by the fact that wave iii (blue) was exceeded, the market may further subdivide into a larger fifth wave. Should we fail to see any significant follow through, odds favor a wave (ii) purple completion.

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S&P Futures: Pre Market Analysis for September 1, 2010

If the overnight session is any indication, I'd have to concede that wave (ii) purple up has still not resolved itself as a break of 1054.25 is immanent. Several technicals still point to a counter trend wave structure that began on August 25, 2010. Yesterday, both volume and open interest declined... a signature of short covering. Once the buying pressure subsides, we should see the resumption of the trend which is down.

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S&P Futures: Market Wrap for August 31, 2010

My interpretation of whether wave (ii) purple has terminated is still open after another day of trading. market found support and trade has turned back up, keeping the the possibility of a larger upside correction on the table. Yet, prices still have not moved beyond the 1054 mark which would signal that some form of alternate count or sideways pattern was unfolding. While I think the price structure is definitely corrective in nature, as indicated in the light blue box range, until there is an upside break of 1054, I'll favor near term downside pressure.  What may be occurring here is a combination pattern for a developing wave (ii) purple and the market is just marking time before terminating. I'll need to see more of the internal structure before I can confirm such an assumption. Whether the market continues down hard or meanders sideways ,  the operative direction remains down with much further downside potential.

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S&P Futures: Pre Market Analysis for August 31, 2010

The Overnight session is mildly down. There is no change to my forecast from last night. Let's see what develops.

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S&P Futures: Market Wrap for August 30, 2010

From the morning's pre market review I stated that the overnight session reached 1072.75, and closed the open gap. This area was cited as resistance in Friday's week in review. Although price never tested the area again during the day session, my interpretation of whether wave (ii) purple has terminated is still open for the time being.  Currently I can only count three waves down . Counting 5 waves down confirms that wave (ii) had ended. A break below 1037.25 would bolster the bearish view.

For tomorrow, I'm looking for a minor bounce for wave iv, followed by an impulsive decline . In the meantime, I am dead wrong on my count and expectations if price trades above 1054 thereby creating overlap.

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S&P Futures: Pre Market Analysis for August 30, 2010

The overnight session reached 1072.75, and closed the open gap. Whether this is a head fake or a tradeable top remains to be seen. I'll be looking for 5 waves down to confirm that wave (ii) had ended.

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S&P Futures: Week In Review for August 27, 2010

Another week has come and gone and the only thing that the bears can say is that the market lost (6.25) for the week. The last time I made a post, I offered two scenarios for Friday. The upward wave (ii) purple scenario played out after extending the b wave down, re-testing 1037.25 in a flat correction. The pattern is close to terminating. Key resistance levels cited between 1061.75- 1071.50 and the gap at 1065.5 remain. The game plan remains the same, i.e. looking for sell signals at these levels. A break of 1037.25 would have at a minimum a bearish downside potential to 1002.75.

Interestingly, yearly cycle work dating back to the 1987 low confirms the general direction of the market and wave count.  Several yearly cycles anticipate a low by 10/29/2010. The 9-month shorter term 1/2 cycle of the 18-month cycle crested at the top of wave 2 circle purple (1216.75) and is now working down. A bottom of the cycle is anticipated by 1/31/2011. Only the 18-month cycle argues that the market may hold up a bit longer before resuming the decline to much lower levels. A crest of this cycle is anticipated as of 1/31/2011 and pushes out the cycle lows to 10/31/2011.

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S&P Futures Market Wrap for August 26, 2010

In today's pre market analysis I indicated resistance for wave (ii) was between 1061.75- 1071.50. Possibly, we would close the gap at 1065.5, then turn south. I also set critical support at 1044.75. The market traded to 1060.25 and turned south for the remainder of the day. A minor breach occurred at critical support but not enough to conclude that wave (ii) had ended.  

For tomorrows trade, I will be looking at two possible outcomes as shown on the attached chart. If trade continues down in an impulsive manner, we need to see 5 waves down to truly confirm that wave (ii) had ended. A push up and a break of the red trendline would leave the door open for the gap to close at 1066 or any of the above mentioned resistance levels stated from last night.

 

Tomorrow we have the GDP report before the opening bell. I expect some early volatility.

 

Best of Trading

S&P Futures: Pre Market Analysis for August 26, 2010

Not much to go over as the overnight session  is on stand-by awaiting the jobless claims number at 8:30 est. The chart shows the resistance levels for a proposed wave (ii). As I mentioned last night, the wave either compleeted yesterday or will develop in a more complex manner. Therefore, all I can offer at this point is a range of resistance between 1061.75- 1071.50. Possibly, we close the gap at 1065.5, then turn south. Let's seee what develops.

I'm setting critical support at 1044.75. Any trade back down under this level would indicate that wave (ii) had completed and that wave (iii) of iii circle (green) of 3 (blue) had begin.

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Market Wrap for August 25, 2010

In yesterday's Market Wrap post, I mentioned specific target areas that I was looking for today. We hit the first target (1038) and turned tail to the upside. Notice the divergence of the MACD histogram. This is typically found between a 3rd and 5th wave as it confirmed that wave (i) purple was completed.  I must admit, the wave structure would have counted better if there was one more decline below 1038 but I can count a complete 5 wave structure down from wave iv (1080.25). The fact that it didn't results in a slight relabeling of the internal structure of the move down from 1098.5, but  it doesn't change the direction or the overall interpretation which was down going into today's session.

For tomorrow, this sets up a corrective rally that either completed at the close of today's trade or will develop in a more complex correction. Look for targets and further analysis tomorrow morning.

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Pre Market Analysis for August 25, 2010

As expected, selling pressure resumed in the overnight session. See my market wrap posting for support areas at http://elliottwavelive.blogspot.com/2010/08/market-wrap-for-august-24-2010.html

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Market Wrap for August 24, 2010

The market is currently working wave iii circle down and it appears that further selling is on order on a near term basis. At a minimum, wave iii circle = wave i circle at 1038. There are also other potential targets at 1034 and (1030.25 - 1030.5; respectfully, the  .786 retracement and the monthly S1 pivot support). As the wave structure unfolds, I'll revise these targets if need be.

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Pre Market Analysis for August 23, 2010

The overnight session is trading up confirming my "week in review" analysis. There's additional supporting evidence that critical resistance of 1083.75 is a significant area to watch. First, we have two fibonacci  resistance levels at 1086.5 and a 1.382 reverse extension at 1084.25 on the ES1 chart.

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Weekly Wrap for August 20, 2010

A Trading Lesson and Set Up

Last time I posted, I depicted two possibilities for Friday's trading. They were:

#1. That we are working wave i blue of wave (iii) purple of 3 (blue). If this is the operative count, then we should see further selling in the overnight session or into the first part of Friday's trade.

#2. I also have labeled the chart for a W-X-Y, "Double Three" flat pattern that would complete around 1100.75 whereas wave W=Wave Y. This aligns well with the upper boundary of the corrective pattern. I would look for the channel to provide resistance! Should this scenario play out, I'd expect trade to turn tail quickly from today's close as trade can't go beyond 1066.25 for a regular flat correction.

As food for thought, I said that if price exceeds 1066.25, there is still another alternative labeling  that would call for an expanded flat correction. Under this scenario, trade would make a new low, then retrace up beyond 1100.75.

Often when several scenarios present a greater tendency for trade in one direction you have to play it. The odds favored a decline (66%) and a 33% chance that trade would move higher. I'm not going to go over the trade but there were several ways to enter the market to the downside. Let's look at what occurred.

What we got was #1 as price traded below 1066.25.  Indeed the higher percentage played out. Scenario #2 was eliminated on the break of 1066.25 but it is still to be determined if the expanded flat alternative is still in play.

The Trade

Regardless of the current wave labeling, the count suggests that trade continues up from the lows set on Friday. Current price action looks choppy and contains overlap ... a classical signature of countertrend moves.  So the question to be answered it what's the hypothetical trade. We'll, if the current labeling is correct, price can't overlap 1083.75. If it did, the possibly of the expanded flat interpretation may still have some life. Traders should be looking for sell signals against critical resistance (1083.75). The ideal stop rests just above this level (1084). How one accomplishes this is determined by your trade plan with the underlying wave count confirming the completion of 3 wave up from Friday's low of 1061.75.

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Market Wrap for August 19, 2010

The Market took off to the downside right after the negative Jobless Claims number was released at 8:30 EST. Prices traded heavy all day and in an impulsive manner. I have provided a chart tonight showing two possibilities. I realize that there is allot going on in the chart so let me explain. If anyone has any questions,please e-mail me.

First there is a base channel drawn from the top of wave 2 blue. It provided structural resistance at 1098.5. There is also another channel draw which is a corrective channel. Notice the upper boundary crosses 1100.75 (more on that in a minute).

I have depicted two possibilities here:

1. That we are working wave i blue of wave (iii) purple of 3 (blue). If this is the operative count, then we should see further selling in the overnight session or into the first part of Friday's trade.

2. I also have labeled the chart for a W-X-Y, "Double Three" flat pattern that would complete around 1100.75 whereas wave W=Wave Y. This aligns well with the upper boundary of the corrective pattern. I would look for the channel to provide resistance! Should this scenario play out, I'd expect trade to turn tail quickly from today's close as trade can't go beyond 1066.25 for a regular flat correction.

Here's the tricky part. If price exceeds 1066.25, there is still another alternative labeling (not shown) that would call for an expanded flat correction. Under this scenario, trade would make a new low, then retrace up beyond 1100.75.

In conclusion, we have two scenarios calling for a new low and one that calls trade higher. Tomorrow is Options expiration. Let's see.

Best of Trading

Pre Market Analysis for August 19, 2010

After the initial knee jerk reaction to a negative jobless claims number, the market has settled down. There is nothing of significance here. See last nights Market Wrap for working operative wave count and alternatives.

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Market Wrap for August 18, 2010

Interesting day in that what appeared to be the start of something big to the downside fizzled. By 3:30 pm est., the market had clawed its way back up to challenge the near term top of wave (ii).  Until a break of 1089.5, the current wave count stands (see chart). However, the deep retracement does cause some concern that a more complex wave (ii) is still unfolding opening the door to further upward prices (see chart 2). The chart is not drawn to scale for any projections but shows the general direction of an alternative wave structure that may play out. Until 1066.25 is broken, I can't take the alternative count off the board. 

Best of Trading.

Pre Market Analysis for August 18, 2010

There is no change to last nights commentary. The ON (overnight session) is flat.

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