Week of 8-14-11

[Richard Carlisle]

Monday's action is progressing as anticipated. We expect to see backing and filling up to the INX and ES 1220 to 1230 levels before a major set back or the beginning of an Elliott fifth wave down of the next larger degree.

INX and ES 30 minute bars

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[Richard Carlisle]

The current volatility is hard on everyone and the S&P 500 (INX) has satisfied the minimum requirements for the fourth wave upward correction of the previous decline at about 50% but the history of the last two years is for corrections to be a little stronger. Therefore, we are still looking for the INX 1220 to 1230 62% level before we see the beginning of the down thrusting fifth wave.

INX and ES 30 minute bars

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

[Richard Carlisle]

Unfortunately, we have more of the same chop as Tuesday. INX did make another new nominal high for the current sequence at 1208.47, which is adequate for the "Fifth" of "C" of "4". Therefore, the decline beginning near 10:20 CDT this morning may very well be the beginning of the "5th" down of the next larger degree of trend but we want to see INX prices below 1170 before going only with that idea.

If prices hold current levels near INX 1184, then one more push to INX 1220 could be in order.

INX and ES 30 minute bars

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

[Richard Carlisle]

We can apply two interpretations at the current juncture, Wave "1" of five or "B" of the on going "4th".

If this morning's down thrust recovers much more than the INX 1170 level we might consider the down thrust a "B" with "C" up to come as a possibility but that is a second choice now.
We are still looking to sell more ES on bounces to the 1170 level. The "5th" in progress should carry prices well below last week's INX 1101 level.

INX and ES 30 minute bars

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

[Richard Carlisle]

Five waves down in INX and this morning's little pop is sufficient for the "1" and "2" of the on going fifth of wave one down.

Prices below INX 1130 negate any further ideas of an "ABC" bounce to INX 1170 and pretty much confirm wave three of five in progress. Price ideas of INX 1075 and 1030 or lower would be in order.

INX and ES 30 minute bars

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