Parameters for equities indices in judging the bullish/bearish wave count; Natural Gas rebound plays; and welcome Trader Brian's posts at UBTNB3 blog

I'm sure a number of Elliott Wave analysts are puzzling over the wave counts as some of the equities indices like the Transports and Nasdaq are edging yet higher, while the dollar and the VIX have dropped under prior support levels to test lower. Below is a very quick candleglance overview of some indices (with the CRB and dollar at bottom, both only showing data through yesterday's close). (By the way, the XLE does look at resistance so given its chart position and volumes, the XLE may be ready to move to lower levels.) On these small versions of daily charts, I've marked trendlines that show how these indices are looking like channels - IF these channels hold, then it remains possible for the current move up to actually be a type of 3rd wave that can still have another pullback above the lower line and then another 5th wave push up to the upper line. Now - it is too early to assume that these will "work" and not break out up OR down, instead. But it is a way to get a handle on the current movement and how to assess it.

Let's also note that, even though the S&P 500 is pushing higher, it has not "broken" Tony Caldaro's Objective Elliott Wave (see links and update feeds at right) pivot of 1041. According to Tony's OEW methods, the SPX can actually push as high as 1048 without breaking that pivot. But if it gets to 1049, then he's got targets higher such as around 1060 and 1100 - you can see him writing about that in his weekend update, posted here, and daily updates at his site (those are the ones that feed in at the right side of the page).
*UPDATE - the SPX did hit a new rally high today, tagging Tony's 1041 right on by price - I'm copying his SPX chart in at the bottom of this post.

One way to summarize this is, the technical backdrop continues to maintain some "sell signals" even as price has been pushing higher and with the VIX and dollar drop. So, while there are some "continuation buy" signals out there, the picture is mixed. I'd call it a "yellow light" mode - if you think of the green, yellow, red traffic lights for Go, Caution, and Stop - this means proceed but only with Caution!

Breaking under the lower channel line would clue in that the rally is most likely over. Making a daily swing high by having a day that goes under the prior day low would be presumptively bearish, so if/when we see that, one way to play it would be to initiate or hold short with such a daily swing high having triggered, and then see whether or not the lower presumptive trendline I marked, does or does not give support. (I.e., whether or not price breaks under that lower line.) This can also be a KI$$ way to see it without getting too entangled in questions about what is the Elliott Wave count.

Sometimes an Elliott Wave count can be somewhat different for different indices and sectors. It's also possible for a wave count to be the same, with the ending wave being truncated in one index (meaning it doesn't reach a new high, or new low as the case may be).

I find it interesting by the way that gold made its new high against the dollar, by going over $1000 again, but not necessarily in other currencies ... because it was the dollar that dropped precipitously this week, duh! So even though GLD is pushing up again today, notice that its selling volumes were a little high the past two days. I don't mind giving it a bullish try but definitely honor a stop which I think can be placed at the lows of yesterday/today. If it's really a wave 3 up then I don't see why it should violate a stop at that level. Conversely, if it turns out to be a weird head fake correlated with the dollar drop, then I've got to tell you, there are still respected cycles analysts who've got it marked for having already made a very significant cycle top.

But, I can also recognize that Tony Caldaro has gold marked uptrending, and I also still have that $1192 number that it can reach as a very long-term Fibonacci "bullish butterfly" pattern - so I'll be glad to let a stop level at the low of yesterday/today speak for itself.

I also want to welcome Trader Brian who's already been making a number of great trading comments both here and at the UBTNB3 blogspot, UnbiasedTrading-No Bull, No Bear, No Bias - at http://ubtnb3.blogspot.com/. Brian is now able to and has started making direct posts there (the link is always at the right side of the page here, under the blogger name "kalkgrun". His first post, today, is Nat Gas Rebound Plays. When you see his posts under that name, you'll know those are posts made by someone who really does trade for a living! and his primary focus his swing trading, with consideration of both fundamentals (I'll forgive him for that, LOL) as well as technicals.

As for natural gas - UNG dropped from resistance yesterday, so I'm not convinced it has finished making its low for the commodities pricing and it may be some days yet before we see it finish chopping into a low and chopping its way back out again. If we see it taking its time to complete a low, that will actually give more confidence once it's done, that it's really done, so don't mind giving it some time. Trader Brian's plays are based on companies in that space, and we know that often company stock prices move before the actual commodities pricing does, so it's all good! Brian is also giving specific levels to watch, including targets and stops which is the right way to do it - get the information at his post cited above.