Week of 2-13-11

[Richard Carlisle]

Steady and climbing - we are still looking at 1338 in INX and 1334 in the ES futures.

As stated in previous posts, we believe all of the broad Indices are technically over bought and in an Elliott "Fifth-Wave of a Fifth-Wave" of ending degree. Therefore, we are keeping our stops tight and are watching for sudden down turns.

INX and ES 30 minute bars

Charts created with http://www.Aspenres.com

[Richard Carlisle]

Today's sell off appears to be another Elliott "Fourth Wave". The wave of next larger degree appears to be in an extended "Fifth". We are still anticipating prices rising as high as the 1334 to 1338 levels but as stated in earlier posts; we have tight stops in anticipation of a swift sell off and of our up side targets failing.

INX and ES 30 minute bars

Charts created with http://www.Aspenres.com

[Richard Carlisle]

INX and ES prices are at their expected higher levels for the current move so; we have sold some long positions but we are not taking on new overnight shorts until we see clear evidence of a completed pattern. Until then, there is still a further objective for INX at 1360 as measured internally on the half-hourly chart and 1383 as measured on a daily bar chart.

Prices have been advancing on low volume but the declines have been on even less volume. Therefore, until we see a commitment in either direction, we will have to keep an open mind and be willing to accept stop outs in either direction if we trade. Meanwhile, the wave count of next larger degree of trend is still that of an Elliott "Extended Fifth". We still expect to see a major sell off within the next seven trading days and probably if INX and ES rally into the Full Moon of 2-18-11.

INX and ES 30 minute bars

INX daily bars

Charts created with http://www.Aspenres.com

[Richard Carlisle]

A rally into a Full Moon, which is exact, early Friday at 08:36 UT, prices at their up side projections, a countable "Fifth Wave Extension" in place and an up thrust from a triangle all suggest that at least some profit taking is in order.

We are looking to Sunday night and Monday morning for the beginnings of a prolonged top in the broad Stock Indices but we want to see commitment to a reversal before we short. Prices may continue to advance to the next projection levels near INX 1360 and even 1380, which might change our wave count and opinion.

INX and ES 30 minute bars

Charts created with http://www.Aspenres.com