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Saturday, March 13, 2010

In the quest to find all possible options for the longer term count I have been doing double time to find out if it was possible to have the rally from March through June of last year count out as an impulse wave instead of a corrective wave there by making it an "A", wave, or a 1-2 count. This morning is as close as I have got, with only three minor problems or concerns for this count.

The first, where is the all power-full, strong impulsive 3 of 3 wave, the point of recognition, that time when the market is screaming the train has left the station and the late buyers jump in driving momentum to its peak level of the rally. There is not even a decent size gap that is characteristic of a 3rd wave.
The 2nd problem, and by the rules is perfectly acceptable, is the size of the 5th wave which can be classified as a truncated 5th. Almost nonexistent in size, and something that often occurs following a particular strong 3rd wave, and in this case, an extended 3rd, is a valid count even thought it is not pretty or proportional to the entire structure.
The 3rd problem, is the size of the retracement from 956 down to 869 for the 2nd wave that is only 21%, far less then the normal 38-61% found in 2nd waves, but still not a rule breaker.

So over-all I believe this can be counted out as an impulse wave without any rule breaking, and only a few broken guidelines. Next up, and hopefully I can get to it today is a closer look at the wave structure from 879 to the present to see what new and different ideas I can come up with because I am not 100% satisfied on my current count that I posted yesterday and hopefully I can find something that fits a little better, or at least have a couple more options.

PLEASE feel free to rip my above count apart, any suggestions or broken rules you find will only help to get a better count and will be much appreciated!!!


  1. I really like your work so there's no way I'm gonna diss it but it seems to me you are trying to get bullish at the top. Don't doubt yourself listen to your emotions it's really simple you don't need ew or anything else.

  2. Check this :

    I've been trying to understand how Caldero et. al. can be convinced that the move from Mar '09 is a P1 up. I just can't get with that program.

  3. String, I understand your concern, that is why I wanted to see if there is any possible way to count the rally as an impulse :)

    Martin, I agree, the TA, and FA is very bearish, the only thing that worries me would be out of control inflation driving prices higher.

  4. There's no way this is a five. But it doesn't have to be. SPX can get to 1200, 1400 or even 2200 in threes, the most obvious being an ending diagonal. Fives are obvious - if you have to struggle to make something a five, its more than likely a three.

  5. @David yes it can. And with the Fed's willingness to print our way out, we could very likely keep this levitating act going for quite a while. chopping higher on low volume until one of the black swans drops from the flock providing the 'news' that sends the herd to the exits.
    Try as I might, it is hard to trade without bias, and going with the 'trend' is tough since I'm expecting the bottom to fall out if/when someone sneezes too loud.