Wednesday, October 27, 2010

Real Time Update (10/27/10)

[EOD] Click here for the EOD udpate.

[215pm] Count update (ES)-
The rebound from today's low appears to be the c leg of an expanded flat. Leave room for one more potential squiggle low.

[1035am] Count update (SPX)-
Of the top three tracking counts, the rare expanding EDT count (red) is complete. The market needs to decline further to take out the contracting EDT count (blue) - or it could rebound here. The market needs to drop below the Oct 19 low and then the August high to take out the bullish count (green).

[836am & 850am] Overnight FX (DX, Aud/JPY)-
Still awaiting the resolution of a potential LD (bullish) or a fourth wave consolidation (bearish) in the USD index.
Regarding audjpy and spx, see if a potential ED in the works breaks prematurely.
[832am] Squiggles (ES)-
This is the squiggle per the bullish count (see the [820am] entry, point [3]). The labels from the recent high are applicable to the bearish count as well.

[820am] Overnight stocks -
[1] If minor 2 per the bearish count (red) topped at the recent high, the market needs to drop below the Oct 19 low by definition. That level is 1155.50 in the December ES contract.
[2] If minor 2 per the bearish count has one more squiggle high left, leave room for the Dow to truncate (or less likely, diverge?) as its recent high is within points of the April high.
[3] Minor wave 3 could have topped on 10/13 or at the recent high per the bullish count (green). By the spirit of alternation, minor wave 4 is likely a shallow retrace, possibly a triangle of a complex three given the wave structure so far. In conjunction with [1], dropping below the Oct 19 low alone is not a confirmation of a bearish top, but a required starting point.

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