LATE NIGHT RAMBLINGS

From a simplicity standpoint, this chart speaks volumes to me.  The contained price action within the channel virtually screams that we have not had a fourth wave to any major degree as of yet, which would also give weight to the nested, not third wave unwinds in the NYA and the SPX.  However, we are smack in the middle of the zone where a wave C extension from the 2011 lows (green 2/B) would separate itself from a full blown third wave rally which would be just shy of 5000 on the Nasdaq Composite.  I would be very comfortable stating that I believe this year will be capped by the 138% mark noted in the extensions table and unless you are a trader, you might as well chalk the entire year up as 'no growth' to your portfolio.

BEARS BLOW IT................. HUGE!

The complex corrective structure on the RUT played out perfectly with a 1% gap down, but after that, the bulls showed up en masse and put a floor under the market and added a rocket to price action.  Ultimately the RUT exceeded the 1144 line in the sand for a nested decline set up and locking in a three wave decline.  I had ditched a more bullish interpretation of the SPX a couple of weeks ago when the decline got deeper than I had anticipated.  As a fault of my own, I didn't wait for the count to prove itself invalidated by overlapping a point that would violate the rules that govern Elliott Wave structures.  The NYA was the chart that had me favoring the original more bullish interpretation as a result of the would be wave (3) in the SPX failing to make new highs in the NYA.  Below is a pictoral of the discrepancy.

 

TARGET TAGGED AND REVERSE

Best laid plans are best laid plans till they go awry.  RUT will be the focus today as it hit the skids right between the numbers we were looking for yesterday (and it is my bus crash mechanism of choice).  Everything was going along great right up until the close where a would be simple minded flat turned into a train wreck that I hate even trying to label.  I genuinely hate complex structures as they seem to never turn out as you'd think, and presently the only thing that is giving a positive signal that it may be right is the fact that the S&P Emini is breaking south from its triangle which I thought for sure was a final fourth wave before a fifth wave higher.

So with that, the all too improbable Double Three Elliott Wave structure has a much higher probability of playing out than I originally gave it credit at the close of business today.  If you are the squeamish sort I suggest you turn your head now because this could get messy.  The nefarious WXY, the Swiss Army Knife of Elliott Waves.  Basically, if we can't figure out what is going on rationally we'll toss one of these in there.  In all seriousness though, this is one of the few that came out cleanly from an aesthetic point of view (mine).  A gap down below 1130 tomorrow morning pretty much seals the deal on the structure and the count.

The bigger picture charts remain unchanged to any degree worth noting so I didn't bother with them.  Good skill.....  I'd call it luck, but a lot of the time they are one in the same.

  

BEAR CAPITULATION?

The bulls went to town again today with another 20pt. run.  Per Zerohedge, this has been the best run in 13 months.  There are a few things that make me skeptical of the run thus far even though it has been rather impressive.  First up is the Russell 2000.  This has been the go to chart for me for the past week or so as it is showing weakness compared to the other indices and has the potential to outperform to the downside if/when this thing lets go.  Needless to say, this is my vehicle of choice when the bus crashes.  It is currently set up nicely with what would appear to be at present a nested wave (2).  Anything above 1144 and I'll have to concede to the bulls on this one.

This was a fun little chart and some keen observation by one Mr. Dundies over at Deep Wave Analytics today.  He noted that every oversold condition on the RSI had been met with new highs since mid year of 2013, except for this one.  Oversold and still a good ways from new highs.

Lastly is our S&P 500 Short term chart.  While an impressive rally, just because it is fast doesn't make it impulsive.  We're coming up on a confluence of things that has a decent potential to kick off our next larger wave C decline into the 1600's.  At the 1827 area we have wave c equaling wave a which is a common Elliott Wave target for corrective waves.  Also in that area there is a gap from back on 24JAN14.  Lastly the 78.6% Fibonacci retracement level also finds itself parked right in the middle of the other two creating quite a coincidence area.  The elevator drop could be special from up here.

A little caution has to be warranted for both sides, so have your gameplans ready and don't deviate.  Good luck peeps. 

NEAR TERM TARGET ACHIEVED

Here we are.  So now what?  It was a very impressive run up from the lows, but until the market shows us it wants to do something else beside the projected path, then we'll stick with it. Sorry for the brevity, but its been a long weekend. 

BULLS SHOW UP TO THE DANCE



The bulls showed up today in force like we were looking for.  However, now is really not the time to get complacent on a rally, because if this thing wants to turn south in a hurry, this would be the place for it.  A simple abc correction complete in this area would imply another nested wave to the downside.  Also of note is the upper channel boundary coming into play.  

The Russell 2000 has only put in three waves from its all time highs so we need to be on the lookout for either a more complex fourth wave or nested waves to the downside.  The bounce relative to the S&P was relatively muted, so it has the potential to put in a lower low on a retrace of the other indicies completing its five wave sequence down.

BOTTOM IN. REALLY?

Letting the price action come to us worked out nicely as we had one more low left floating around.  The new low in the S&P lined up nicely with what appeared to be incomplete structures in both the Nasdaq Composite and the Russell 2000 which now seem complete with today's price action.  Expectations from here are a retrace back towards green ii/b and 1800. 

BOING!

We got the bounce today we were looking for after yesterday's scary decline, but now the question is was this just a bounce in the fifth wave or is this a much larger correction that is starting out? At present there isn't enough price action to make a definitive choice, so we'll leave it up to Mr. Market to fill in the void and give us more clarity.

EXPECTATIONS MET AND THEN SOME

Dip buyers worst nightmare was what today was.  I would like to give some serious props to a couple of individuals over at Deep Wave Analytics for calling the running flat back on Friday afternoon because that is exactly what expectations for price action following one would look like.  A very weak/failed correction followed by one massive selloff.  With longer term channel support coming up and this being the final wave of the sequence, a bounce should be in order in the coming days if not directly.  Be aware, stay prepared and don't get scared bears, you'll get your turn again after a brief retrace.  Good luck peeps.