9/19/11 - No Robots Today

It baffles me that anytime the market rapidly goes up in the last hour of trading it MUST ALWAYS be the fault of the hedge fund algorithms, the EEEEVIL ROBOTS that are supposedly out to screw up ordinary technical analysis.  Especially when it fits into an EW pattern so well.  In fact, with just a slight modification of Friday's analysis - a modification rendered necessary by the open, not the close - it fits with my count quite well.

(The action in the futures complicates this somewhat, as they fell and now it overlaps my Submin i - this lends credence to my alternate count in which the up move was [C] of b.  I sold off my SDS in the premarket for a slight profit and am currently all cash, but I will short again at <1160 SPX).

This count calls for a move at least into the 1220s.  We created a new gap down which will not be filled until 1216.  The upper 1240s is still a potential , but if 5=1 we will not manage it.

The first downswing from the wave (iii) top is clearly five waves, with a near-total correction for its wave 2 and a truncated fifth.  In retrospect, I should not have labeled this wave "a" of a triangle, as what would have been the "c" and "e" waves were threes, and I don't think a 5-3-3-3-3 triangle is EW standard.

It is also possible that my Submin "b" of (iv) is actually a W-X-Y correction, with my [C]-[D]-[E] as the (A)-(B)-(C) of the [Y] wave.  This allows for the possibility of it actually being a wave 2, which plays into the case that is most immediately bearish, and is the case we might have to consider if the SPX futures drop below 1185.25 tonight, and especially if the 1174 cash-equivalent is breached.  This case has 1220 as the top of a W-X-Y Minor 2, and the sharp move up this afternoon was C of 4 at some degree (possibly [C] of iv of (i) of [i], but maybe even (C) of [4] of i of (i) of [i]).

No need to invoke algorithms or hypothetical manipulators here.