I figured that the most likely counts were that 1190 was either {1} Minute [a] of 2, {2} Minuette (c) (or Minute [c]) of a Minute [iv] (or Minor 4) triangle, or {3} Minuette (ii) (or Minute [ii]) of Minute [v] (or Minor 5), though this last count was even less likely on the grounds that the move from 1120 parses far better as a "five". All three of these counts suggested a move down to at least the 1140s region, which is why I sold off where I did--I figured it was bottoming. Well, that and I didn't want to have any active trades open should the stock market be closed on Monday due to damages from Hurricane Irene, which is a distinct possibility.
The potency of the bounce off 1135 suggests that we are not in the triangle; if we are then we need a B-wave to go much further down than the 1168.62 afternoon low (and the triangle walls are closing in fast), or we need to finish up what would be the most pathetic excuse for a C wave ever.
Another alternative, however, is that we are still in Minuette (c) of [iv] (or, if you prefer, Minute [c] of 4). C=A with this wave, considering the bottom of (b) to be 1121.09, would bring it up to 1205.50 - a possible larger ascending triangle. This count seems to work well with the timing, particularly if we reach that towards the Monday close/Tuesday open (add one day for every day markets are closed), since it would be the same length, time-wise, as (a) - slightly over five days. You'd then have a three-or-four-day trip back down to the channel line (which would then be around 1140) in the first few days of September, then your wave (e) up, then the wave [v] down all the bears have been waiting for.
The primary disadvantage to this count in my opinion is that it would require wave [1] of c of (c) (the impulse from today's lows) to be the longest, but there's nothing saying that can't happen, so long as [3] is longer than [5]. Nevertheless, my primary count is it's still Minor 2 up. In such a case, I expect C=1.618A, or a target of just shy of SPX 1250. A breach of 1101, of course, invalidates Minor 2 as happening now.
Thanks for sharing the thoughts. I'm curious how you'd label the substructure of (iii) and (v) of [a].
ReplyDeleteMinuette (v) is clear: Submin ii is the sideways motion from 1:20 to 2:20 on the 24th. Submin iv bumps into the end of day - the last half-hour is flat, and then futures were sideways to down until the Buffett announcement which was Submin v.
ReplyDeleteMinuette (iii) is trickier. MACD on the 1-minute suggests the visible top at ~3:10 on the 23rd should be Submin iii. Dealing with that crazy gap-and-immediate-fill is annoying. I'm figuring Submin v is an ending diagonal, the up-into-the-close is Micro [3], the gap down is Submicro (A), Submicro (C) truncates. If you draw a channel line from the Submin iv low at 1153.90 (~3:35) through the Micro [2] low (~3:50), it touches that Submicro (C) of Micro [4].
Thanks for the detailed response!
ReplyDeleteSo ii of (v) is a running flat retracing less than 38.2% of i? And iv effects an even shallower retracement of iii? If you've got iv starting at 1176.84, I believe that renders iii (12.82) shorter than both i (12.84) and v (14.44).
I agree that (iii) is trickier (it looks like an unambiguous three to me). If I understand what you've explained, I get a wave i that's 0.239 of iii and 0.212 of v in nominal price terms.
No, iv starts at 1178.56, and most of its action probably takes place in the futures which don't show up on StockCharts; I think it got all the way down to 1170 cash-equivalent.
ReplyDeleteBut I can see your point. It's very easy to count what I call Minute [a] as 11 waves, which is a "three", and if it's really Minuette (c) of a triangle then of course it *should* be a three. The ambiguity of the count is telling me I should hold off on trading until it's resolved - short targets 1220-1250, long targets 1010-1040.