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Saturday, July 16, 2011

Weekly Review ~ July 9 - 15 2011

STOCK INDEXES SPX AND WILSHIRE 5000
Last Friday the count was Minute [iv] of Minor 5 http://2.bp.blogspot.com/-JMAVufolncE/Thdqj9QBoHI/AAAAAAAAJeM/X7JbnqHJxfw/s1600/spx5.png   We were looking for more pullback perhaps, but at the least, the base channel was expected to hold.

On Monday, we got that further pullback, yet I mentioned the down selling pressure was way high to be a Minute [iv].http://1.bp.blogspot.com/-IO8DAR8y7aw/ThtdJR398QI/AAAAAAAAJek/pdv_5DewEzs/s1600/spx5.png However we were willing to see one more day of trading before switching again to the [e] wave of Minor 4 triangle count. http://4.bp.blogspot.com/-mj83_CcEuyE/Th9US_NZZBI/AAAAAAAAJgE/H4rO8Cx6LDA/s1600/spx60.png

On Tuesday we had a fulfillment of a 5 wave down pattern and switched counts to the [e] wave count. It is supposed that this 5 down is the first leg (a) of an (a)-(b)-(c) 5-3-5- zigzag [e] wave of Minor 4 triangle. http://4.bp.blogspot.com/-puMR5DKczvg/ThyzmgVEdJI/AAAAAAAAJfM/CKTlzKaamDI/s1600/SPX5.png

We were looking for a (b) wave sideways correction with a price high in the 1331-1333 SPX range. We got the bounce to 1331-1333 on Wednesday http://3.bp.blogspot.com/-g_f46rMl9pQ/Th4IDEEIzOI/AAAAAAAAJf0/-UEQaJ8zTfw/s1600/5+spx.png speculating the market was forming only part of (b) of [e].

Thursday the market exhibited more corrective-looking wave patterns http://2.bp.blogspot.com/-4vaCI8bieH8/Th9P9Un3jhI/AAAAAAAAJf8/H9AJAPBgOW0/s1600/SPX5.png and speculated that there will be even more sideways weakness on Friday.  That appears to have been the case on Friday http://4.bp.blogspot.com/-96dF5Cm9Jj4/TiCfIV5pnzI/AAAAAAAAJgQ/P1LSUc78izM/s1600/spx5.png

WHAT WORKED:
1. Going into this week, I was generally cautious about the market figuring it was, at best, in a Minute [iv] sideways pattern (with perhaps more price weakness). The backup count, Minute [e] wave of Minor 4 triangle was always waiting in the wings upon more price weakness.

2. Calling a break of support at 1331 for the market to move down to 1317 area. Thats what happened on Monday.

3. After seeing a pretty decent 5 wave pattern down and labeling that wave (a) of [e], marking resistance at the 1331-1333 area for a (b) wave.  That price area capped a rally and forced a reversal.

4. Generally being cautious all week not calling for any big moves either way as we had no confirmation of a finished (b) wave pattern.

WHAT DIDN'T WORK:
1. Speculating that the dollar gap up Sunday would get filled soon http://2.bp.blogspot.com/-HHSXi96DbyE/ThpqONWdYEI/AAAAAAAAJeY/bF-JGKZj1Qw/s1600/2011-07-10-TOS_CHARTS.png. It did eventually get filled, but not until it had attempted a breakout and run-up much higher.


GOLD AND CURRENCIES
On Monday we speculated GOLD was consolidating for a push higher. I patterned a triangle on a chart but it turned out to be a flat only. http://4.bp.blogspot.com/-DN1mAwvBCtk/ThuORFwn1GI/AAAAAAAAJfE/wlLX8Irf6Z8/s1600/gold.png

Gold then did get that push higher http://4.bp.blogspot.com/-XRTpSEwLHDI/Th4Bz-2GGoI/AAAAAAAAJfk/pU91DEH_OIA/s1600/gold.png

BONDS
Still awaiting a move down in yields to challenge the blue box virgin wave space http://3.bp.blogspot.com/-WuZfZ3-st0c/ThuM0vRSYVI/AAAAAAAAJe4/S_hET9IKtgc/s1600/30+year.png Prices continued to move that way this week.  Perhaps a (c) wave down in equities will produce the final wave down in bond yields.
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