Primary Count: Indexes are on intermediate wave 5 down to new lows
Alternate Count: Indexes are tracing a huge triangle formation and a significant counterrally will start very soon. I don’t hold as much weight in this as I did last week. Any break of the DOW Nov lows (which it is close) would pretty much invalidate this triangle play for good…in theory anyway.
Commentary:
There is divergence, or should I say lag, between the 3 main indexes. The DOW is once again the feeblest. The SPX is the next feeble and the NASDAQ has yet to break beneath January lows, let alone challenging its November lows. I suspect, the NASDAQ will play catchup in the coming selling stages of the latter half of intermediate wave 5. But one can never be too sure.
I labeled several charts I provided as triangle plays, merely because I show my primary wave count on the 60 minute SPX chart. I figured it would be instructive to see if the triangles were still a valid formation on each index and as of this moment they are so I show the contrast between the competing top counts.
The waves continue to be choppy with periods of selling pressure often intense. The gap down was HUGE the other day (8 points), and don’t think the MM’s don’t have their eyes on it. The SPX is mightily struggling to maintain support near the 800 mark. There are no “neat” and “concise” 5 count wave channels, but there is a clear downward sloping action going on. EWI mentioned the Daily Sentiment Index (DSI) is down to 5% after the gap down the other morning. I imagine it didn’t improve today. At the Oct low, the DSI was at 3% and the Nov low was at 4%. This kind of low reading suggests a bounce is coming to shake out this bearish sentiment a bit. A gap fill to 825 would force a recount of the primary wave structure somewhat but only in the minute wave degree. But I would not count on it. Afterall, this is the BEAR of BEARS and I imagine this thing can bottom on a daily sentiment reading of near ZERO .
The DOW is near its Nov low so no telling if that mark will trigger mass buying.
With OPEX on Friday, and the PPT taking steps everyday to try and shore up market confidence, its gonna be an interesting 2 days.
Daneric – nice job. Thank you very much. Do you have any public sharts on Stockcharts?
Really fine, fine precision work! Thank you!
I really appreciate your charts it helps me to see what is really going on! It cuts out all the market noise of people coming up with random numbers.
880 – 135 = 745 target?
this seems about the same as what im calling for. here is my updated chart in photos:
http://social.stocktock.com/photo/feb-projections-update?context=latest
however, a concensus is sometimes scary
good job Daneric!