The Deviant Standard

Traders' preparation for volatile markets.

Browsing Posts tagged Market Commentary

The market showed us early that our expectation are busted.  The 10,184 fire line is at a 76.4% reteacement of the mvoe down from June 3rd highs and would also be near a=c for a revised counting of this correction .  If we take out June 3rd highs then broader counts need to be reconsidered.

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The continued strength of pre-market futures as we approach the open suggests we’ll also see a deep retracement in the cash indices.  A 76.4% retracement of yesterday’s move down measures up to 10,016.41.  It l0oks like our long-term FibGrid projection level will be in-play early on.  As suggested in our daily commentary, watch this level. 

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Nothing, in theory.  Our Wednesday evening issue used our Elliott Wave theory analysis to advise:

At the end of five waves we should get a bounce.  If our count is valid, that bounce should not take out Wednesday’s high. 

This morning’s bounce in equity index futures is a deep retracement of the move down.  That stresses our outlook, but it gives any short entry hear the top defined risk.  Either makes a great entry or will lead to questions about our outlook. 

Keep in mind that we expect foreclosure statistics and jobless claims this morning.

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Our 11:11 top call was a tad early, but the same technique found the actual top and both were good trades.  Only one was profitable, but both were good.  In today’s issue of The Deviant Standard (PDF) we have an exposition of the techniques that workd, an update on the additional downside we’ve been expecting and great setups to watch for the model portfolio tomorrow.

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Enough said?  Not convincing, but tradeable for my system.  Waiting for confirmation to load up the truck.

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So far, this late morning new high on idices is showing divergences.  We’ll look for an end to a five waves up (possible as an ending diagonal)  while maintaing those divergences so signal a possible turn.

Link to 3 min chart: http://screencast.com/t/MTQ2NjQwZDg

Link to 1 min chart: http://screencast.com/t/NmQ1ZTNlZmEt

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Figuring out when we might get our correction was the big rock in the road.  Now that it’s been moved out of the way, we can see the little rocks that block our path.  You know… trivial questions such as, how far the correction will go.  My limited thoughts on the subject in today’s issue of The Deviant Standard (PDF).

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Dow 9907 to  9917  has our first cluster of possible targets for the end of (ii) (if we’re not already done early at 9896.30).  If we blow by those targets, we’ll look for new ones.  9871 area remains a possibility at this time.

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We got our identifiable 5 waves down into [C] to complete b.  Despite being a slightly deeper retracement than expected, it ended right near a Fibonacci-proportioal relationship to [A] at 76.4%.  And virtually right on one of our FibGrid minor levels.  Even though the depth of the correction will give us some pause, our opperating asusmption remains.  As I write this, but after drawing the chart that accompanies these comments, price has turned down again.  Taking out the low where we’ve placed b would again put the count in jeopardy. 

If we continue to move up, we’ll look for a five wave structure that could help us figure out a turning point.  In the early going, we should keep our eyes on 9895, 9915, 9930, 9950, and 9970 (rough numbers).

[click image for larget view]

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[B] continued to push higher, but not beyond the end of a.  It also now shows a clear three waves up, bolstering our current view.  If [C]=[A] then we should see b end around 9845, roughly the 38% retracement of a.  [C] = 1.618[A] is at 9815 nearby the 61.8% retracement of a, which sits at 9811.  Given the size and shape of the move down so far, the latter is likely a better target.  All of this asusmes our presumed wave count is correct.

 

[click image for larger view]

[Update 1:54pm]

If this count is anywhere near correct, it’s straining the bounds with the Dow at about 9790 and the 76% retracement of  a.  There’s no new chart to accompany this update.  But prices need to turn up here or we need to re-assess our count.

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