By contrast with yesterday, today there was tension between what the ChartsEdge daily map was showing and the probable Elliott Wave count we were working with that called for the gap down this morning to be part of a third wave to point equities lower. Instead, equities took a reversal right from the opening and from then on looked very consistent with the ChartsEdge map for today - part of the reason I've revisited with Elliott Wave count (chart at right). Price also went above standard Fibonacci levels for the hypothetical wave count, with price finally flagging about the 200-hour moving average (as you can see in the chart). It's possible that today marked a wave 2 pullback if the entire movement down into Tuesday's low was the wave 1. In the chart at right I've marked this, using the numbers 1,2,3,4,5 to total wave (1), and the letters "a,b,c" to total wave (2). Since the waves marked as "a" and "c" are almost exactly the same length, the symmetry can be right and the potential price channel has good symmetry. The main caution is that, with the strong push up right at and into the close, it's too early to say "this is it."It's possible that after-hours price movement may start to indicate whether or not this wave counting will prove correct. As I noted on the chart, I'm not really feeling certain about the wave 3 as marked - the look of its internal subwaves 2 and 4 don't look quite right to me. But it does meet the technical rules of Elliott Wave counting.
I've used my default Elliott Wave label for this post, which refers to Tony Caldaro, but I do not know yet whether - and if so, how - he may be revisiting the Elliott Wave labeling for these price movements. [**UPDATE at 5:10 pm - Looks like Tony is seeing essentially the same - don't know if he calls the wave 2 complete but then again as I also pointed out it would be too early to do so, cannot be certain until we see what the next move is. I'm adding Tony's hourly charts, at the bottom of this post, from his Elliott Wave Lives On - Objective Elliott Wave public charts at http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.]
As my title for this post indicates, this really is of more concern to daytraders than to swing traders, because of the short-term nature of these moves. Sure, we care for swing trading positions ... but once price fell under the price channels and wedges that were leading into what looks like the top of the rally a couple of weeks ago, we turned net short from a swing trading perspective and today's movement up - while very nice for a one-day move and terrific for daytrading positions even from the open - is not at all enough to alter the swing trading perspective. I posted earlier this afternoon how the daily SPX chart is looking, and today's close didn't do anything to change that.
What about the Bradley model? Well it's certainly interesting to factor in, especially since tomorrow is marked as a turn date in that model, but I don't consider it a "set it and forget it" approach (you can compare how it looks (use the "Bradley" label to see it in prior posts here) to the price equities already traced this year and see why). What I do keep in mind is that the 26th day of the month is traditionally a weak time for equities, and that window dressing is not uncommon into the end of June ... so I'll be watching to see how that squares up with the Elliott Wave counting. Of course we should also be looking back at the ChartsEdge weekly cycle forecast - and I know that Andre Gratian in his weekly update posted here (also his intraday updates to subscribers of course) has also been referring to the cycles that he tracks.
I was watching currencies today to see if they would make any definitive movements but didn't really see any I'd consider defining - but it was obvious that bonds made a good movement up and that's looking consistent with our view of bonds that we've been showing for quite a while. Not only with the probability that US bonds have made a low but possibly a trend reversal pattern that's really working out now for the long side. What TLT will have to contend with next is potential moving average resistance - I'm adding that chart below so you can see it too. I'm also posting a variety of other charts (CPCE, breadth technicals, and how the dollar, gold, oil, etc. are looking) at my UBTNB3 blogspot (link at right).
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Thanks Tony! Folks - I don't know that Tony has called the wave 2 as complete but evident he's seeing the same general framework for the move down. (Only difference, if you are following his counts, he's got the different counts on SPX versus DJIA for what the rally high 2 weeks ago topped off - either the whole rally, or just first major part of it).
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