2:00pm – ES registers a major breakout from consolidation on intraday charts, combined with a huge TICK reading.  Solid reversal sequence on the smallest timeframe.

At the same time, the VIX (volatility index) gets crushed and registers a possible ring high on the daily chart.

As soon as Bernanke shut up, the markets took off to the upside.

Testing the 2008 lows without the benefit of an expiry adrenaline shot

The yen has now officially tagged the head & shoulders target I posted on February 5.  This is a level to take profits in cross trades and/or tighten stops as it tests the previous inflection lows.

1:10pm – ES has tagged a parallel channel downside measurement.  Pattern target here.

Dow Jones weekly retest sequence – thanks to Buffy for the chart.

final update – note where the 1:10pm pattern completion sets a low-water mark and a wolfewave reversal takes effect.

I originally posted this wolfewave setup back on October 2008.  I became very alarmed at as the lease rate (forward hedging) picked up significantly and believed that prices would retest the $650 level.  Bad call on my behalf.  Instead, prices have continued to lift as markets exhibit sickness due to the financial crisis, and in spite of a rising dollar.  Today gold is testing the previous spike high around $1000.  Exactly at the pattern target measurement.

Normally, gold trades inverse to the dollar.  The more the dollar is subject to devaluation, the more precious gold becomes.  This relationship has held for many years, however in the last three month, we have witnessed a divergence in which gold AND the US dollar have risen together.  The only way to explain this phenomenon is that the dollar is now considered a ‘safe haven’ currency, and gold a hedge against the global bouts of competitive currency devaluation.  As zanussi commented in this blog a few days ago “Интересно, как мы будем жить, если доллар рухнет?” – “I wonder how we will live, if the dollar collapses?”

Where does gold go from here?  This chart was from 2002 as gold attempted to scale the $325 resistance level.  In many respects, this daily pattern looks eery similar to the current weekly price action.  There is also overlap which is visible on the daily gold chart much like back in 2002.  This is just a head’s up to keep a tight stop if there is no decisive breakout above $1000 on this attempt.

The gold lease rates have returned to more ‘normal’ levels following the Indian wedding season 5-fold spike in September – October.  Monitor this signal and be suspect of any sudden surge in the forward hedging activity.

11:15am – markets are playing channel games as we head into expiry.  Does past support turn into future resistance?

12:05pm – channel measurement target, measured move a-b-c completes around 782

1:25pm – another a-b-c measured move completes on momentum swing high

2:50pm – small wolfewave presents itself following measured move target and overlapping wave structure.

4:20pm – no reversal presents ifself on the wolfewave setup and insead falls to day lows to close AM gap up.

11:15am – The first pattern that presents itself is a small momentum divergence, a measured move setup.

1:45pm update – A second measured move pattern completes, pocket trade to 10am spike lows

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2:15pm – wolfewave pattern presents itself on 5min chart, overlapping wave structure

3:00pm – wolfewave target tag

4:00pm – glide to a finish

10:00pm – possible Elliott wave 5 termination sequence on hourly ES futures charts

12:00pm – retest of AM spike low

Expecting some type of a-b-c (counter-trend) structure to form here.  Reaction to the 5min/20ema is key for action into the close.

3:10pm – measured move targets

4;00pm – target tagged

11:45pm – small gartley pattern setup into the noon hour reversal hour

12:50pm – first target levels, pocket trade to support

NYSE – TICK indicator used for intraday scalp momentum readout, “momentum proceeds price action”

4:00pm close – PPT in the final hour of trading?

This NYSE advance/decline volume indicator shows how lop-sided the action becomes throughout the trading session.  Today presented an exception where the last-hour trend reversed itself into the close.  Thanks to Kongfuzi in b-line for the chart.

10:00am – wolfewave pattern setup into the close reaches target levels