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Advanced Technical Analysis - Intraday Flash



Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

Not very much to add to the price action of the last few days save for the counts we have appended to the 13 minute charts and the fact that we feel more confident in the "down-up" sequence we have been looking for before we get the next good risk/reward setup.

That down-up sequence, if it did not already start at yesterday's peak in the NDX, could start from a new peak in the DOW and SPX today or tomorrow from the INDU 10480 +/- and SPX 1174/77 areas. A 1-2% internal 4th wave decline should then ensue for a few days before a 5th and final wave rally takes prices to another swing high in all three indices. As we have stated, there is a good set of Fibonacci resistances at the SPX 1200 +/- area which would roughly correspond to the INDU 10600-10650.

The pattern in the NDX is a bit more advanced and it seems to be closer to an internal 4th wave low before a final 5th wave move up (5th wave up from the lows registered on 10/25), so there too we'll allow for a bit more corrective sideways to down action over the next few sessions before a final rally is expected to take hold that should, by internal measures, be weaker than the other impulsive moves up. At this stage, the count is open to so many acceptable interpretations that a high confidence analysis simply cannot be made.

This is why we remain focused on identifying "5" clear waves off the lows that all three indices made on 10/25. That "5" wave move, should it come with hourly Demarks, hourly divergences in momentum, breadth, ticks, and volatility, could very well mark a cycle degree (major) peak. Even if it does not represent such a large degree peak however, it will still represent a good risk/reward bearish interpretation given all the parameters we outlined above.

For now then conservative interpretation favors remaining on the sidelines awaiting that potential "5" waves up from 10/25. A more aggressive approach could suggest a possible uptrend on any pullback in the next few sessions that shows short term divergences for a 5th wave thrust to our existing SPX 1200 target. Our Fibonacci time window for the SPX of 11/12-11/18 remains valid; as importantly, the price pattern we describe above of a down-up sequence correlates nicely with some sort of actionable peak in this time frame. Given the wave pattern off the Oct 2002 lows and the March 2003 lows, along with some remarkable (read: record) longer term sentiment readings, we remain of the view that this whole move off the October 2002 lows is a cyclical bull market within a secular bear market. And once complete, the bear market trend could resume. Whether that event takes place at SPX 1200 +/- remains to be seen. But traders should at least appreciate that the conditions are there for such a peak to be registered.

No positions in stocks mentioned.

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