Waiting for direction

5 min: There is an a-b-c (blue) up which looks like an "a" , followed by and a-b-c (red) down that looks like a "b", followed by a i-ii-iii-iv (blue) of a 5-wave structure up. We experienced overbought conditions at the top of iii blue, which is consistent with a 3rd wave and followed by a trickle-down wave iv-blue along with a negative MACD histogram. A v-blue up is still pending, likely piercing through the recent iii blue top.

1Hour + 2 Hour:  Following oversold conditions, as predicted previously, we entered into a bounce up, which compliments the observations on the 5min chart. The descent from the recent all time hight appears a 5-wave structure "a" down, which implies a bounce up "b" followed by another 5-wave structure down "c".

Daily:  Friday closed above the 50 EMA signaling that wave "a" down is complete and that we are likely in "b".

Weekly: The market pierced below the Sep 15 low, but retracted and closed higher, labeled as "a" red down.

Interpretation: We may have a little higher to go, before we resume our movement further down.

Next: We want to see the bounce up "b" complete and then we want to see a 5-wave structure unfold down.

Alternatively, if the market, following the current i-ii-iii-iv and to come v (blue) up, followed by a retraction and followed yet by another advancement in the form of 1-2-3, then the market will be moving further up. Too early to make a safe call.

Following a bounce up, Downtrend resumes

As expected, markets bounced on the daily 50 EMA and the 9/15 low, to resume their descent today closing below both aforementioned markers. This is significant, as this is a daily close below the recent iv low (blue).

Weekly: We are in a new trend  down.

Daily:  Short term descent closed below 50 EMA and 9/15 low

Hourly: On the 1-Hour chart we see again oversold conditions with a divergence on the MACD histogram

Interpretation: Have we just completed 5 waves down of a on the hourly? If yes, it implies a bounce up (b), followed by a larger descent (c)

Next: A short term bounce up away from oversold conditions is expected first. Then, if the market decides to head south, the August low is the next target, or about 5% from current levels. 

As we mentioned yesterday, the market bounced on the previous low and the daily 50 EMA (see charts from Tuesday).


Next; on hold

Wave "a" down almost over

Market reached oversold on the 1-hour chart and almost hit the 50 EMA on the daily: Wave "a" down almost over.

Next, expect a bounce up ("b")

Weekly: We have completed v of 5 of a wave that started in April 2014 - now we are looking for a new trend.

Daily:  Short term descent almost reach 1st target: 50 EMA

Hourly: On the 1-Hour chart we see oversold conditions

Interpretation: We are on hold

Next: Bounce up wave "b" expected

Weekly: We have completed v of 5 of a wave that started in April 2014 - now we are looking for a new trend.

Daily:  After wave v completed last Friday, we entered into a short term descent  

Hourly: On the 1-Hour chart we see a minute a-b-c wave down that started last Friday

Interpretation: We are on hold

Next: A daily close below the recent low of Sep 15 would confirm a larger down trend.


































Charts and Notes from Friday September 19, 2014

Weekly: We have been working on v of 5 of a wave that started in June 2013
Daily: After wave iv that took almost 2 weeks to work out, we entered into v on 9/16/2014
Hourly: On the 1-Hour chart we see that wave v completed today (also seen in the 2-Hour charts)

Interpretation: Uptrend that began on 9/16/2014 likely ended today
Next: A daily close below the low of Aug 7 will confirm the down trend.