January 31st, 2012: Update 1 – Morning/Afternoon
Posted by pugsma on January 31, 2012
2:35 pm EST: We have three really distinct possible minor 4 wave counts in-play right now:
- Primary count is a minor 4 triangle that will rattle around between 1303 and 1322 a couple more days before blasting off higher.
- 1st Alternate (blue) count is that minor 4 ended at 1300 as a simple Zig-Zag. Waves (1)-(2) of minor 5 have been put in place and the SP-500 is now ready to blast off towards 1345, where (3)=1.62*(1).
- 2nd Alternate (red) count is that minor 4 is setting up a more bearish double Zig-Zag with the 1st ZZ for wave (w) ending at 1300, an (x) wave up to 1321 and now a (y) now to a target of 1288, where (y)=(w) is underway. There is also a 38% retrace target of 1283 that fits with this 2nd alternate count.
SP-500 15-min chart (2:25 pm):
10:50 am EST: With the move above 1320.06, the primary count needs to be changed. Right now the best modification is a minor 4 triangle with the move down to 1300.49 as wave (a) of minor 4, the move up to 1321.41 today as wave (b) of minor 4, and now a wave (c) down toward the 1303 to 1308 area. From there a wave (d) to rest the 1315-1318 and finally a wave (e) of minor to end around 1308. This count will allow minor 4 to buy some time. A drop be 1300.49 will invalidate this triangle count and mean something more bearish is unfolding, like a double ZZ down to the original 1283-1286 target area for minor 4.
The alternate (blue) count is unchanged, expect I labeled the move up to 1321.41 as the end of wave (1) of minor 5 and now wave (2) is underway with target area of a 62% retrace to 1308.
SP-500 5-min chart (10:41 am):
john said
thank you
LarryH said
Yes, thank you, Steve
mikesmith53 said
Thank You Steve.
pugsma said
House Keeping Note: The February monthly password will be sent out via group e-mail late this evening and will be used for the first blog post made tomorrow, Feb 1st.
Rock said
Thank you so much Steve for the outstanding work and the timely updates.
paulsgs said
ditto
pugsma said
Minor 2 was a double ZZ that last 9 trading days from Wed Dec 7th to Monday Dec 19th. So far minor 4 has lasted 4 trading days from Thursday Jan 26th to Tuesday Jan 31st. If the triangle count is correct, then the minor 4 wave will buy a least two more days and maybe three days until the end of the week.
mika009 said
Looks to me like some type of top is in at 1333.47. It will be good to see SPX test the breakout area of 1270 which is also around 50% retracement of the rally from 1202.
mikesmith53 said
Ye old golden cross is upon us here.
ROX said
It sure is
slater9 said
when a 4th wave triangle is possible in the indexes short term traders look for the computers to fall back on using their predefined signals such as the 886 algo, blt, and red line green set. in the risk on risk off assets… some examples from today…
http://stockcharts.com/h-sc/ui?s=UCO&p=5&yr=0&mn=0&dy=5&id=p73272734425&a=230570376&r=561&cmd=print
slater9 said
the key is to not get greedy knowing that price will probably zig and zag… get in… get out
http://stockcharts.com/h-sc/ui?s=TSO&p=5&yr=0&mn=0&dy=5&id=p33621234118&a=225261611&r=9857&cmd=print
slater9 said
uco was .886 algo,tso was blt, and here ,cde was red line green set
http://stockcharts.com/h-sc/ui?s=CDE&p=5&yr=0&mn=0&dy=8&id=p92374087374&a=225859247&r=9036&cmd=print
slater9 said
nothing is certain, the only edge a short term trader has is his discipline…predefined entry, tight stop . clear target…
http://stockcharts.com/h-sc/ui?s=APC&p=5&yr=0&mn=0&dy=10&id=p58566360522&a=214950700&r=8286&cmd=print
slater9 said
breakout traders are a nervous bunch and are willing to sit through a couple of touches of their entry….. here the computers caught them liquidating as well as taking the merchandise off the hands of those late to the trade…. using .886 algo
http://stockcharts.com/h-sc/ui?s=X&p=5&yr=0&mn=0&dy=7&id=p44512162530&a=145726892&r=8649&cmd=print
aselden42 said
If possible could you respond to Mika009′s question in comment #6 above, because (as I understand it) we shouldn’t see a break below 1300ish until we complete Minor 5 up to near 1400 and then come back down. Is that right?
mikesmith53 said
1st paragraph of the morning post above should help you
pugsma said
Aselden42: Minor 4 can’t retrace into the minor 1 high of 1267. That is the only definitive requirement we have for minor 4 at this point. I’m watching primary count triangle here for minor 4 that will hold above 1300. However, there are other possibilities for a deeper retrace to 1283 (38% retrace). We’ll just have to keep an eye on things as minor 4 plays out to it’s conclusion.
Chrys said
CNBC lead article …..Stocks formed the much-heralded “golden cross” on Tuesday, but traders are waiting to see if remains there at the close before calling it a sign of an uptrend.”
Maybe we need a larger correction.
mikesmith53 said
If it happens will be interesting to see if the windsock hits the buy buy buy button tonite on Mad Money.
beethovenmozart said
Steve, I think your alternate count has a flaw. The third wave is the shortest of the three impulse waves.
pugsma said
B: Nah, it’s good as iii is slightly longer than i.
mikesmith53 said
Big shout out to cnbc for keeping the doubts going in the last 24hrs. Guy clled apple down to $270. Agal said SPX in a broadening top. Aguy on the floor said a new bear is imminent and Jimmy Rogers no no no to US equites.
JA said
How does the saying go…bull markets like to climb a wall of worry?!? Keep it coming CNBC. When we’re at 1380-1420 and everyone is calling for new highs then maybe take some off the table for a few weeks.
TMF said
Cmon lets see some impulsivness to the upside here !
http://stockcharts.com/h-sc/ui?s=$SPX&p=1&yr=0&mn=0&dy=7&id=p20681326974&a=235740797&r=1265&cmd=print
pugsma said
I just put up and updated 15-min chart and added a bearish near-term 2nd alternate count in red for the double ZZ down to 1282-1288. There are 3 completing minor 4 counts going right now and I have the triangle as my primary.
Chrys said
Triangle = indecision….appropriate ahead of the jobs report on Friday.
pugsma said
Chrys: Yes, and one other point I need to make clear is that the triangle could also work as an (x) wave for the bearish 2nd alternate count.
KaZoom said
If SPX closes near here today, daily MACD confirms bearish cross: http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p07620685169&a=254364627&r=5007&cmd=print
pugsma said
KaZoom. Not unexpected. Look at the daily MACD bear-cross during minor 2 of this same major [3]-P1-C1 on you chart. It would be contructive watch the rising daily MACD trend line tag near 10-12.
Chrys said
Steve – with so many options what about wave (b) going to 1333 before reversing? No sure what pattern this is.
pugsma said
Chrys and All: Don’t forget the purpose of good TA and even E-wave counts. It’s to improve you odds for making the best possible trade. It’s not for getting EVERY single wave count right.
That said, what wave are we in by my overall larger wave count? That’s right, a minor 4 wave. There are targets down to about 1283 (38% retrace) and wave minor 4 must stay above 1267 to remain valid within the larger major [3]-P1-C3 wave structure. So we wave hit a typcial wave 4 retrace target of 23% at 1300. We don’t get know if wave minor is over 4, but we do have some idea of what to watch for, as this wave comes to an end.
johnrr said
When in doubt – I stay out.
thanks Steve
mika009 said
One of the best thing to do!
Thanks Steve.