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Swing It Babe!

Since the 1-2-3-4-5 (potential Last Trip for the Spx on 30min chart yesterday) did not materialize today =  GOOD.


I was afraid it could be the last run and Spx would be headed toward 1040 support (or worse).  This failure to finalize a 1-2-3-4-5 run as per yesterday's 30min analysis makes it possible to re-label the vertical run up as a 1st wave rather than a 3rd wave this giving SnP500 a chance to extend the rally from July 1st bottom for another 2 to 3 weeks.

Assuming we consolidate tomorrow in preparation for more rallies ahead (more rallies require more preparation time), this is what I expect as a potential scenario on the 60min chart:



Keep in mind this is highly speculative and the markets have infinite ways to frustrate whatever expectation a trader has in mind.

The objective for tomorrow (or Friday) is to be able to buy a pullback and thus lessen the risk factor just in case the markets decide to go into a sell-off rather than a rally.

The 200dma and/or 10dma are viable supports in case Spx goes down tomorrow.


Good luck.

Aug 5 EOD Update:

It looks like SnP500 does not want to go lower low and instead is doing a higher highs higher lows pattern:


It is an admirable performance by the bulls today being able to prevent a break below the 1116.82 Daily Chart Measured Right Shoulder "Failed" Resistance.

But then, the Jobs Report will determine how the markets will actually perform tomorrow.

I was able to buy ES at the 1116.50 to 1118.50 range (half load).  Now with stop loss at b/e just in case the Jobs Report turns out worse than expected or something bad happens in Asia/Europe.

-  I sold some LYG today (I bought excess load in May and June average 3.20 price) since it is now a potential 1-2-3-4-5 with 5th extended target of 4.84.  Maximum allowed target is 5.63 with 5.18 major fibo confluence resistance level. 

-  Will sell some excess NBG load bought in May-July (ave 2.60) at the 3.40 resistance level.

These stocks may go lower low once the expected next run down happens so be careful if you bought them based on my "Investing Again" Instablog last May.

Post Jobs Report Update (Aug 6):

Bulls got clubbered today with decidedly worse than expected Jobs Report.

This scenario is no longer valid:


I don't have high probability scenario right now since SnP500 divergence short signal triggered today but the price pattern is still that of a stair-step higher highs higher lows on the daily chart.  A very hard to trade pattern at the moment.

-   Euro$ keeps breaking above the maximum allowed target of 1.322 for the v-th of the 3rd wave on the daily.  Therefore, I assume the i-st wave of the 3rd is not the longest wave and the v-th is the longest:

Euro$ is now good for trendtrading using scalping techiques but not advisable to daytrade (holding more than 1 day) since it may reverse any day.  It is also excruciatingly painful to short when the v-th kept spiralling up since an extended v-th has a very wide target range.

Aug 6 EOD Update 3:40 pm:

Just in case traders cannot understand what happened today.  This is the intraday wavecount:


The run down has a truncated 5th.  But there are two other wavecount interpretations wherein they both would go lower low.  The truncated 5th scenario won today.

Also =

I bought SSO today at noontime ($37.26) for an scalp and sold 1/2 at $37.56 fibo retrace resistance then sold the other half before the close at $37.99.  For pocket money.  

Not suitable for those not used to scalping.


---  $VIX

$VIX is triple bottom today.   The 4th test usually breaks the support.

Investors are not afraid there will be a meltdown.  At least for this week.

VXX is I don't know.  Traders seem to be jumping the gun on VXX since it is the trading vehicle for the $VIX/$VXN.

---  Treasuries

$TNX 5th down is the shortest wave based on current price structure:


Investors are buying IEF more than SHY or TLT signifying medium term uncertainty rather than short-term or long-term.  TLT is still lower high on the daily chart.   Thus investors are more prone to buy equities for long-term hold (if they do buy equities).

Once SHY and/or IEF start going down due to divergence sell signals on the daily chart;  that is the time they are supposed to start buying equity stakes.

But for now, there is a potential for the IEF to spiral upwards on the weekly chart.

Basically, Investors have extra cash (not by selling stocks) but they would rather buy IEF than stocks or buy puts to protect their stock portfolios.