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Rally Again?

My ES and YM buys last Friday had been taken out when their trailing stops got hit during the over-night bad session in Asia.   Again, as if in always, Europe saved the day by not following the Asian meltdown and thus ES is back to rally mode off the over-night lows again, as always.  Asia almost always got spooked by Greece (the US too) while Germany's DAX kept countertrading Asian panic meltdowns.

The Euro is now a potential 1-2-3-4-5 selloff from Oct 2009 on the daily chart but the 240min 24-hr chart is still indicating a missing iv-th up and v-th down sequence for the 5th wave.  Euro is bouncing off the weekly support;  therefore, traders are buying Euro now expecting a rally or a least a bounce off the double bottom support.


Since the ES is a little bit more beholden to Euro and the DAX than Asia;  it is imperative that we expect ES to bounce (or rally) if and when DAX and/or Euro bounce (or rally).

Unless proven wrong;  I consider ES to be forming an A-B-C (black count) expanding flat on the 24-hour 120min chart for trading purposes.

I will try to buy the pullback using the 5min chart.


OK;  we've got a Meltdown Monday (spooked by CNBC stream of bearish comments since early morning session with Dow 5,000 target - they can easily move markets by making such extremely bearish comments).  The second time since after several months of Monday Rallies.


XLF is now in the 5th wave run down.  Instead of consolidating the 4th for a day or two, it immediately went into the 5th down with maximum allowed target o14.96.  I sold the 4/5-th FAZ long position at 14.60 from a buy of 12.13.  Still holding the last 1/5-th position.  Not bad performance for FAZ;  I wish I bought more (hindsight is always correct) at the bottom.  Also, still holding 1/3 SDS long position bought at 30.22 average price.  Just in case XLF and SPX just keep melting down.

I bought ES using the 610 tick chart divergence buy signal at 1115 when (12:07 noon) it was able to form a 1-2-3-4-5 from the early morning run down.  Speculative since the 5th can go into extended range with maximum allowed 1102.25 target (but seldom happen anyway).  Tight stops and will trail 1/2 position so that 1/2 will make a little profit and the other half making a little loss just in case the 610 tick chart divergence buy entry is too early.

This is now the wavecount based on the daily chart fine-tuned into the 120min 24-hr charts target ranges:



The last chart differs from the early morning TA of expanding flat.  The daily chart (To 5th or Not to 5th?) target will be above the 1220 last high IF and When the 5th down truncates as indicated on the daily chart. 

The 120min chart posted early this morning (with an expanding flat pattern) is a conservative wavecount just in case the daily 1-2-3-4-5 with a truncated 5th down wavecount is wrong.

These analyses are for short-term traders.   I buy SDS and FAZ at the top;  then buy ES and YM at the intraday bottoms (also some SSO) for daytrading only.  Tight stop loss provision(s).  Then sell them in stages once the trade(s) become profitable.

Happy Hunting.