David,
Re :MAs
This may be hindsight, and maybe playing with the charts to much, but the best fit Elliotte reading I found just now is looking at the 5 days SMA, which is the only MA that gives a smooth 5 waves read in the 1st leg down from the top, on which we all agree.
Although this one doesn't show the abc of the 2 - it shows only a one legged correction- it did change its direction from up to down on the first day of decline (8/25, which ended up, but from a much higher intraday top).
The 5 dma also bottomed at the bottom of the 1st wave, on 8/14, and its netx bottom was on 4/9 (supporting your read of a truncated 5, and the end of the 3 of 1) and not 9/1.
In the last 5 days it showed a two legged correction, and a close today under SPX 1023.5 will turn it down again. To continue down tomorrow it would need the average close of today and tomorrow to be under SPX 1014.8 .
3-13 dma-
This one is so far the most bullish.
Short of a crash today (SPX under 975), the 3 is going to cross over the 13 today, they way it did after the big 1 was over, and will confirm (what the parallelogram already showed for the short term) that short to medium term trend is up, and would probably stay over the 13 dma for at least two more days, unless we break down from the parallelogram first.
21 dsma-
We did not have a close over the 21 dma since 7/22.
Well, we did have one. On 8/25, when the market reversed, the SPX closed 2.5 points higher then the 21 dsma, and maybe this marked the end of that correction. That was the only day the SPX even traded over the 21 dma.
Yesterday the SPX touched the 21 dma at that day's high, and reversed to close under it. A signal?
The 21 dma was headed down continuosly since it turned on 7/24.
For it to turn back up we'll need a close over 1060 today (naahh), or over 1080 in the next 7 trading days (ahm). This appears to be highly unlikely, so one must assume that for the next week, the medium term trend is still down.
Conclusion:
A close over 1024 is bullish.
A trade under 1015 today could indicate that something has begun, but only a close under 1004 will take us under the 13 dma again, and may suggest a new down leg.
The weaker the market today, the more we should short it.
Under 1015- One may try
Under 1004- One may increase
Under 980 - Go for it.
ATG |
