$SPX 15 Minute: Little divergences building on the market, we might be close to a bounce. Above the downtrend line increases the odds of that outcome.
$SPX 60 Minute: Looks like ABC(C = wedge). Price tested the gap this morning which served as support. There's still a window for another splash lower and remain within the wedge structure. Above 1,310 should confirm the down move is over unless the correctional phase is expanding, which is also viable.
$SPX Daily: Let's look at the market from a Fib count. From the top it's 3 days down then 5 days up. If tomorrow could scratch another lower for this move it will be day 8. It doesn't have to play that way, just pointing out the Fib count in days. Technically, today might be the bottom of this little phase.
Rosey's Rules: Reader Questions: Honing Your Trading Plan . Rule #5:
Chances are when you think the wave count has finished, there's probably one or two more minor waves in the count before it's done. Anyone can count 5 waves up or an ABC but it's rarely that easy, otherwise everyone would use it and we'd call it Elliott Wave Science.
See the chart below. I've labelled 5 ways up, which we see a lot of in the EW world. I'm not comfortable with this wave count and I've seen it used to support the very bearish and bullish counts. I'm skeptical we've complete 5 waves up from the June 2010 low:
Then the question has to be what is the likely wave structure up? Below is a possible finish to 5 waves up. It calls for wave V of 3 to push higher then 4 down and then 5 up. I prefer this view over the currently over subscribed to view that we have finished 5 already. If this is the case, then sometime in May or June is 5, and supports the notion of sell in May and go away. What I like about this is it satisfies my own rule #5 because it's rarely as easy as counting 5 waves up, but more importantly, the following waves should create exhaustion, something missing from putting in a typical top of significance!
$GOLD: I said yesterday, I thought we might have a little more upside left and we got some today. Divergences in place. I wouldn't mind a weak attempt at a new high to finish this off and then maybe we pull back.
$WTIC: I'll say it again, there's still a good chance of a little more upside in oil, then maybe a pull back. A bounce from here would bring the lower BB up and then pinch the BBs allowing for a more significant pull back.
Watch Watch list:
KONG: Finally, a little breather. We might get a little more to burn off the RSI, but it could be followed by a push to $10!
GLL: Divergences in price and seems to be setting up for some kind of near term bottom.
UNG: Today's move just didn't have the right legs. Maybe a tad lower to build an inverse H&S bottom. Above price resistance is far more bullish.
From My Trading Desk: Early in the day I closed my long on UNG. The intraday looked weak, so I took a small gain. I closed a fractional short on KLAC for a small gain for similar reasons. I actually liked the idea of getting small early in the day. We did buy a fractional position of GLL. Nothing big, just a starter position.
I couldn't find much in the way of charts that looked worthy of trading today, so I'm glad we downsized a little. The market is still in No man's Land. We have enough to label this correction down done, but there's no price confirmation upward yet. Mr. Market is playing it close to the vest so far, so I think we'll try to do very little tomorrow.
Happy Trading
J.D. Rosendahl, Rosey