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Wednesday, February 3, 2010

Wednesday updates

After the close, the number of possibilities continues to grow for the short term counts, with none of them standing out as the most likely. One thing for sure, today was a day of consolidation stuck in a six point trading range tracing out corrective waves. The big question is which one, a "X" for the double zig-zag, maybe a 4th wave to complete five full waves up from 1070, or part or all of a "B" wave, and I am sure there are some I missed. We also never made any higher highs, nor lower lows, so that trend is neutral.
The indicators on the daily charts are still over-sold, while all the shorter term charts are mixed. Reminds me why I dont like trading corrective waves, the odds diminish to 50/50 if you are lucky. Best to just sit it out until you can get the odds back in your favor, and find an edge.
Breadth for the day was only 1.59:1, decliners, on low volume, again, boring.
Levels to watch tomorrow, include 1082.86 for a lower low, and 1104.59 for a new high, breaking one of these will eliminate some of the possible counts.
For anyone interested in currency trading, EWI has a free week of their counts and charts, if you are interested there is a link at the top of the blog that will get you set-up.
FWIW, I stayed in cash over night in Wall Street Survivor.
Click here for a real time chart!!!
12:12, With all the short-term corrective waves going on with in a tight trading range the Bollinger bands have started to tighten up.
9:37, I sold my 25% short position in Wall Street Survivor for a 2.37% profit, now 100% cash, and waiting for another edge. Click here for a "Live" chart, real time!!!
9:26, The Russell is selling-off much harder then the other indexes today, over 50% of the rally have been lost this morning. The short-term indicators are now in over-sold territory, and that fits well with this being a "B" wave.
Click here for an updated chart, in real time!!!
9:00, This count now is picking up steam as the move up from 1070 is back to looking more corrective after the sell-off this morning, that is rally seems to count best as a three wave structure, and if so would invalidate the expanding flat option, which needs a five count impulse wave to make the final "C" wave. Breaking below 1088 would confirm that.
In the above count we most likely finished the "A" wave, and now are in the "B" with the "C" still to come, which could be a three wave count setting up a triangle, 3-3-3-3-3, or a five wave count for a flat, also possible that the a-b-c, of "A", could be part of a double zig-zag, a-b-c-x-a-b-c.

8:13, The VIX is showing a nice falling bullish wedge pattern now, which when it breaks, will most likely be to the upside, and should signal the start of the 3rd wave down in the indexes.
Click here for a live and updated chart!!!
7:32, This is just one option, another option is that we finished the 5th wave down on Friday, and the rally is wave "A", instead of wave "C", as this chart is labeled. The micro count can be counted out in more then one way also, either this is an impulsive wave from 1070, that is a five wave structure, or it could turn out as a three, or seven wave corrective count, a-b-c-x-a-b-c, and until it is finished all the options need to be considered.


  1. Hi Columbia! Any idea or would you like to guess on a wave count?

  2. Just saw your recent post. Thanks. You sure do know your waves fellow!

  3. Good stuff Mike! Thanks for pointing out the VIX pattern.

  4. Sensible analysis as usual. Solid work.