11/17/11

Triangle - if it was one - broke.

The primary count is bearish, namely, that Subminuette "i" of (iii) of [i] of Minor 3 (or, if you prefer, Minuette (i) of [iii] of 1 of Intermediate (3)) bottomed today.  The natural reaction is for a correction (dead-cat bounce) to occur.  We sort of saw this in the last candle of today, but notice that this bounce (even though half the world screamed "Manipulation!") ended up not making it all the way to the interim high made just an hour earlier.

And futures in the early going don't look so hot, though again... futures in the early going.

As I noticed on yesterday's post (refer to the picture), the action from the 11th to the 16th resembles a downward-sloping head and shoulders.  A little unorthodox, perhaps, as the head is actually at a lower price than the shoulders, but that's what it looks like.

Logical upside targets for a correction are 1230 (38.2%), 1236 (50%), 1243 (61.8%), and 1252 (78.6%).  The "triangle" lower trendline has already passed 1230 and 1236; it passes through 1243 on Tuesday the 22nd and does not make it to 1252 until Monday the 28th (it would still take until the 28th if the markets were open their full hours on Black Friday).  The neckline of the head and shoulders hits 1236 Monday morning and 1230 Wednesday afternoon.

The bull count is that this is the C wave of B/2 down (e.g. Minute [b] of a still-ongoing Minor 2).  C=A is at about 1200 if 1277 was the B of B/2 high, but just as I think 1264.25 is the orthodox high of my bearish (ii) of [i] of 3, I think it would be the orthodox high of a bullish B of B/2, in which case C=A is at about 1187.  C=1.618*A is at about 1140.