11:15am – Measured move target is achieved based on bull flag setup.

1:45pm update – early setup for measured move target by Buffy is called at 10am. Target is tagged at the beginning of PM session.

2:00pm profit taking level – pattern traders will also recognize the gartley on larger timescale and definitely ring the cash register here.

3:00pm – just a quick note to remark on the correlation of a short USD (US dollar) position to equity markets.  Showing the EUR/USD cross.

10:00am – thanks to KT for early map of intraday action

1:00pm update – A test of lower bounds of rising channel.  A clean 11-handle swoon to match previous downdraught.

2:03 voodoo: yes, you also added a purple moving average line to the chart
2:04 voodoo: would you mind telling me what that represents?
2:05 KT: it is the Ensign map
2:07 KT: the large red arrows on top and now the large green arrows on the bottom are yellow dog

2:10pm update – Thanks again to KT in b-line channel for providing afternoon update to AM call. 

 

The markets once again find themselves at a precarious fork in the road.  Support is being test on the daily charts of the S&P 500 right around the 820-830 area.  Heck, even Bob Brinker has given a buy signal in recent weeks suggesting this is the level be loading up the boat along with the retest of Dow Jones 8,000.  Thanks to tip in b-line for the great chart.

From a bullish pattern trading perspective, this call to action is suggesting we are building an inverse head and shoulders setup (also known as a cup and handle pattern).  Certainly this worked quite nicely in the  March 2003 reversal sequence.  Will history repeat once again?

2:30pm update – 3rd push higher

10:05 am – The first short sale is triggered as the SPX approaches the BZ (Brach Zone) running from 867-871.

10:30 am update – Parallel channel projection suggest a bounce at these levels. A ‘b’ wave low? Thanks to tipper in b-line channel.

11:00 update – a completed gartley pattern rises to the 78% retrace level at 871. Another a-b-c measured move is in place. This will require a tight 2 point stop, since the gartley setups have been having difficulty in the last few trading days

1:00 pm update – an amazing resilient market in the face of another round of bad news. A wolfewave is running in the stampede higher. Notice that all scalp trades are best handled with 30 minute entry/exit time horizons.

4:00 pm update – the markets manage to close the AM gap down. Most bulls consider this wildly positive action in the face of ugly news. The fact that the automakers are shot down in a senate vote is certainly far below the radar on this rather rambunctious day. Except for the noon hour, intraday jerk and scream motions are limited to 30 minute scalp plays.

From an elliott-wave perspective, it appears that the S&P has completed a 5-wave up sequence and encountered resistance at the 50 dma (50 day moving average), thanks scooter.  If the markets are indeed facing a reversal sequence, at the current juncture we should expect a complex correction to unfold (abc – x – abc structure) given the rule of alternation.

I have also outlined the bullish perspective in parenthesis – the possibility that there will be one more attempt to breakout up to the ES 975 levels and the structure encountered so far is just a corrective a-b-c and not the beginning of a down impulse. The true make-or-break level will reside right in the ES 906 juncture (62% retrace level) – if the market moves above that key juncture, the bullish count remains in effect. Very confusing, eh? I am electing not to trade this sequence and instead remain an observer due to the lack of clear signals today.

12:45 pm update – as expected, the prices rise to test the 906 level in a complex wave structure. The larger pattern is once again a wolfewave setup, targeting the 888 level into the afternoon session.

2:00 pm update – wolfewave target is met.

4:00 pm update – after closing the AM gap up and target measurement, the market rebounds into the final hour.  A second wolfewave shows into the final minutes suggesting the overnight globex lows will revisit the ES 891.5 levels, perhaps even with a Thursday morning open right in the vicinity of this second pattern target.  Note that this chart is scaled to a 3min time frame.

Overnight trading manages to tag the measured move target around 895. This sets up a bullish gartley pattern as the markets open. Looking at the larger picture, the structure very much resembles a head & shoulders pattern, therefore, keep a close eye on the ES contract (S&P eminis) for a lift with resistance around the 911 area after the first hour’s gyrations subsides. Ideally, the lift will also form an a-b-c retrace structure. Thanks for the excellent charts from Buffy and midge from ensign b-line channel.

From the larger perspective, the markets are now testing the 50dma (daily 50 moving average). This will prove to be a key make-or-break level for the remainder of this week.

1:45 update – Another measured move completes following intraday highs.

3:30 pm update – the head&shoulders pattern does assert itself.  The last rebound in the late afternoon confirms resistance at the neckline around 895.

The markets have lifted for 5 days straight, with the media cheering the largest advance since 1987. Now it is time to get back to business. The astrological influences will be getting progressively worse into mid-December as the markets are subject to set of very difficult aspects in the coming days.

1:40pm update – Markets have continued to drift lower, and the noon swoon has produced a small bear flag in the form of a measured move bounce. The chart below is the ES eminis (S&P futures contract). Bernanke is schedule to speak in a few minutes and will undoubtedly be met with a big ‘boo’ from the crowds.

4:00pm update – Markets end with a resounding thud.

What are the possible S&P targets into this lift? The following is a chart posted in the b-line traders room by Rin outlining Fibonacci and measured move target levels on the ES emini futures contract:

Session Start: Thu Oct 23 08:12:48 2008
Session Ident: #pitstock

[11:13] good afternoon
[11:20] ES .. 872.5 -> 922.5 = +50 .. am action set up gartley pattern on a-b-c retrace .. 882.75 + 50 -> 932.75 target for full bull flag measurement .. not quite there, but a wolfewave will setup on push to target levels
[11:33] It seems the s&p500 is being whipsawed more by the major oil components than anything else .. XOM, RDS, CVX making for most of index lift due to market caps
[11:40] ES .. attempting to confirm 911 intraday spike high as support
[11:41] bears will look to 918 as a possible right shoulder .. I would prefer to anticipate possibility of a broadening triangle from these levels to 934
[11:44] ES .. small h&s on 5min .. neckline 908-910
[11:47] ES 909 .. neckline test, but also a trendline off spike lows from lift .. key juncture .. http://chart.nu/ES_intraday_20081023_hs.gif

[11:48] <– has stopped trading h&s patterns .. too often they can become continuation patterns .. very dangerous play
[11:56] ES .. the bull game .. http://charts.dacharts.com/2008-10-23/H_80.png
[11:59] not my chart, just am using it for perspective to see the ‘other side’ of trade .. 19000-vol is probably a volume-based charting approach (vs. time-cycle based)
[11:59] very similar to the way that tick charts can aggregate a certain number of trades into a single bar

[12:07] ES .. small head’s up on break of rising channel
[12:09] amazing some of the insights that charts seem to bring out .. fibonacci rings completely new to me.. http://charts.dacharts.com/2008-10-23/shawn22.png
[12:12] ES .. second 10-handle swoon 917 – 907 = -10 .. 914 spike high ‘b’ -> 904 ‘c’ wave target here
[12:14] if still riding h&s pattern, expect bounce to retest neckline at 909 levels
[12:23] ES .. next trigger at test of lower bounds off spike lows .. http://chart.nu/ES_intraday_20081023_tl.gif

[12:23] keep 892 levels on radar
[12:25] entering BZ “Brach Zone” levels of 62%-78% retrace
[12:28] small h&s .. 909 neck 923 head -> +14 .. 909 – 14 = 895 targets .. tagged
[12:33] 78% retrace 886 levels .. make-or-break
[12:39] http://chart.nu/ES_intraday_20081023_x.gif
[12:41] nite, all .. that’s it for my trading day

[13:33] NDX /naz100 is resolving symmetrical triangle on the daily chart to the downside .. it doesn’t have the benefit of an oil lift, and may be a way to view markets without the weight of bigcap refiners
[13:34] all indicies .. are rubbing the lower bounds of this continuation pattern a bit raw .. 4x knock sequence / setup
[13:35] ES .. in (yet another) bear flag a-b-c sequence / breakdown
[13:36] http://chart.nu/ES_intraday_20081023_abc.gif
[13:38] ES .. resolving daily triangle to downside .. 4x knock is openning up the basement door
[13:39] ES .. third knock to left .. trendline off spike lows from 10/10 .. KEY pattern resolution levels .. http://chart.nu/ES_intraday_20081023_4x.gif
[13:40] this is where the frog meets the boiling water
[13:43] ES .. overlapping structure on 5min visible suggesting nerve canal struck
[13:45] a wolfewave lurking in this jack-knife situation .. http://charts.dacharts.com/2008-10-23/DYoung11.png
[13:48] have found that wolfewave should be taken with almost 3-5pt stop .. the failed patterns usually lead to “upcrash” scenarios .. haven’t had a clear down crash situation (YET)
[13:53] ES .. ww setup .. http://chart.nu/ES_intraday_20081023_ww2.gif
[13:56] trigger will require wide stop .. first ww setup I am not 100% confident in based on larger timeframe technicals
[13:58] GC /gold .. monstrous wolfewave on weekly .. am giving it to 650 and looking for narrow range bar before any entry .. http://chart.nu/chart?w&m_start=9&y_start=2006&filter=8&ticker=GCZ8
[13:59] ES .. ww trigger @ 871
[14:02] basement door opening .. is this the ‘downcrash’ level?
[14:04] VIX .. a wolfwave there, too .. dunno what it really signals, however .. http:/chart.nu/chart?m_start=2&y_start=2007&filter=21&ticker=VIX
[14:05] indicies .. ALL symmetrical triangle resolving to downside here
[14:11] ww setup .. http://chart.nu/ES_intraday_20081023_ww3.gif

[14:12] wide stop required for fear of downcrash and technical levels
[14:17] gonna have to call this inflection point the “wolfetrap” .. failed pattern signal is almost as strong as a bull or bear flag
[14:18] mesasurement possibilities on pattern failure .. http://chart.nu/ES_intraday_20081023_xx.gif
[14:23] XAU /gold miners .. back to levels when gold was breaking above $300 .. HUI looks the same .. http://chart.nu/chart?m&filter=5&ticker=XAU
[14:24] Greenspan Concedes to `Flaw’ in His Market Ideology .. http://www.bloomberg.com/apps/news?pid=20601087&sid=ah5qh9Up4rIg&refer=home
[14:34] ES 871 .. last upswing > previous downswing
[14:44] ES .. small a-b-c bounce to test lower bounds of multi-day symmetrical .. keep lower bounds off spike lows on radar for next breakdown.. http://chart.nu/ES_intraday_20081023_wwt.gif

[14:47] not with the choppy lift we are getting, now .. was happy just for the ‘god trade’
[14:49] ES .. small h&s .. seen it once, expect it twice .. http://charts.dacharts.com/2008-10-23/midge71.png
[14:52] h&s pattern .. usually evolves from a rising / falling channel .. the break of channel sets neckline .. retrace to lower bounds of rising channel sets the right shoulder
[14:55] nice one, ADM .. fwiw, the charts I am using often come from other sources – most notably ensign’s great bunch of traders in b-line channel
[14:57] irc++
[14:59] NQ /naz eminis .. http://charts.dacharts.com/2008-10-23/Kongfuzi54.png
[15:03] e-wave .. a excellent primer, with some charts from Mary (best realtime e-wave trader I’ve met) .. http://www.ensignsoftware.com/tips/tradingtips50.htm#Application%20?
[15:03] a must-read for gartley pattern players
[15:05] small h&s target completed around 860 (10-handle)
[15:09] a-b-c retrace in progress
[15:09] ES .. target measure at 885-888 levels
[15:10] impulse on this one is up
[15:12] ‘c’ complete on tag of measured move
[15:13] impulse is UP
[15:14] ww target may even get tagged
[15:14] am not betting on it, tho
[15:16] ES .. update .. http://chart.nu/DJI_intraday_20081023_abc.gif
[15:25] ES established spike high as support on pullback .. http://charts.dacharts.com/2008-10-23/av_5000807.png
[15:27] JY /yen .. cup&handle breakout on monthly working nicely
[15:31] nite, all .. over&out .. exhausting day
[15:56] ES .. wolfe in pack .. 3rd push .. http://chart.nu/ES_intraday_20081023_3x.gif