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CURRENT MARKET TREND: Up 5/27/16 @ 2090
Stop-loss 2026






Tuesday, March 18, 2014

Mistake - Updated

In a previous post I stated that 2 out of the 3 bullish counts were invalidated when in fact NONE of the bullish counts were invalidated. Only a drop below 1834.43 could invalidate 2 of the counts, and only a drop below 1737.91 could invalidate the third count.

Anyway, I don't have much faith in 2 of the 3 bullish counts which I believed were invalidated anyway.


White Count: Wave 5 Expanding Ending Diagonal. This move can NOT go over 1905.
Red Count: Contains white wave i, white wave ii, then red wave (i), red wave (ii). Still valid while above 1834.43 WCI
Green Count: The whole move from 1737 to 1883 was wave 1. I can count this with an ending diagonal triangle for iii of 1 (the b wave in the chart above).

I believe the Green Count is the most valid bullish count at the moment. So based on that assumption I have figured a target on the chart. The price target box (red box) is drawn from a 50%-78.6% retracement of the move off 1737. The time box (purple box) is the time of wave 1 transferred to wave 2. The box marks 61.8% of the time wave 1 took to 100% of the time wave 1 took. If I'm looking to take a long position in the near future, I will wait until the SP-500 ends up within that box, then look at indicators for reversal signals.

I apologize for saying the bull counts were invalidated when they weren't.



11 comments:

  1. Honesty is a virtue. And so is your analysis. Thanks, Geno.

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  2. Hi James,
    Thx. Looks like SPX in Green with Expanding Ending Diagonal in C completing wave 2.

    Because of FOMC , there's a good possibility that white might play out as well.

    Much skeptical of RED count given the momentum in stocks.

    Thx

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  3. Hello Geno,

    As per your white count, w iii has 49 points. As w iii can't be the smaller, in fact prices over 1889 will invalidate the count (1834+49), correct? So I don't understand why you increase until 1905 the white invalidation target. Even in the case white w ii finished in your white a (1824), white count is invalidate over 1899 (as again w iii will be the smaller).

    One question: Concerning green wave B, we know that is expanded flats they can go further that the origin of wave A (so over last highs in 1884). At which percentage we should consider invalide an expanded wave B? Just wondering at which point green B count will be also invalidated and we should better consider red bullish scenario.

    Thanks for your comments, an my admiration for excellent job!
    Lorenzo

    ReplyDelete
    Replies
    1. sorry, 1834 + 49= 1883 (instead of 1889), and 1993 (if white w ii finish at 1824)

      Delete
    2. sorry, 1834 + 49= 1883 (instead of 1889), and 1893 (if white w ii finish at 1824)

      Delete
    3. Ok this time the good ones (I was correct, but I took by mistake value 1834 instead of 1839 for the begining of white v):
      1839 + 49= 1888 or 1898 (if white w ii finish at 1824)
      Sorry for mistakes

      Delete
  4. Lorenzo - The White count really isn't even a possibility anymore because in an expanding diagonal the 3rd leg should be longer than the 1st leg, and the 5th leg longer than the third leg. Therefore the white count is out IMO.

    My stop-loss at 1905 isn't set per a wave count, it is set above the typical run AGAINST my indicators. The Daily ADX sell signal allows for a new high 20-40 pts, above the previous hihgh, so that would give a range of 1903 -1923. I figured 1905 was a good enough spot for my stop this time around. It also allows the B wave in the chart above to travel a distance of 115*A (1890) to 125*A (1895) which in my experience has capped B wave new highs. In fact, the stop-loss even lets it run to 138.2*A up at 1900.

    Hope this helps.

    ReplyDelete
  5. Thanks James for the explanation, always a pleasure to learn from you.

    Best regards,
    Lorenzo

    ReplyDelete
  6. Hi James,
    With today's FOMC , DXY and TNX yeilds shot up. Can you please advise on equities and bonds outlook near term?

    Thx

    ReplyDelete
  7. There are periods of times when equities and bonds drop at the same time, but this is generally near lows in equities. I'm posting now to adjust the stop-loss on SP-500 shorts to 1874.15. I believe bonds are finishing a 4th wave triangle and should continue their decline from here.

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  8. Equities and bonds dropping at the same time while Dollar and Yeilds going up.Looks like it's signalling deflationary scenario, if I'm not wrong.

    Thx

    ReplyDelete