S&P 500 EOD Review 21 Nov 2011

The market headed lower from the start and recovered a bit of ground. Let’s first take take a look at the Fibonacci chart. I had mentioned earlier that based on previous moves recorded earlier, it is likely for the S&P to retest the Fibonacci confluence band between 1220 – 1232 and if this band resist any penetration to the top side, the S&P is like to head much lower from there on. The retest did happen but it was unsuccessful and S&P started heading lower from there on. It stopped at the next Fibonacci confluence region at 1184 – 1187.

S&P500 Fibonacci EOD Chart 21 Nov 2011

S&P 500 Primary Elliott Wave Count

The next chart that I have here is the hourly chart with th Elliott Wave count in place. I believe that Micron [3] has completed and Micron [4] is tracing out. Normally waves four are horizontal in nature and retraces to wave four of one lesser degree. With that thought, the likely target for Micron [4] is 1210. Following this, Micron [5] is expected to trace out and the target for that is 1153 – 1159. This target is derived by the using the measured move of the widest part of the triangle. This would complete Subminuette iii.

S&P500 EOD Primary Elliott Wave Chart 21 Nov 2011

5-Year Chart of S&P 500

Here’s the Weekly Chart of the S&P 500 which shows the Primary count.

S&P500 5-Year Primary Elliott Wave Chart

I believe that the S&P 500 is still tracing out the Minor wave D of the Expanding Triangle. Minor D is a complex a-b-c with the Minute [a] completed in a flat pattern, Minute [b] was a double zig-zag and Minute [c] possibly taking the shape of a zig-zag or triangle. I prefer the zig-zag as Minor D has taken too long and a triangle would just extend it even further. If we draw a zig-zag in this chart, with Minuette (a) = (c), we can get a nice pattern which falls in place quite well. Minuette (a) ends at 61.8% of Minute [c], retraces to 31.8% and heads lower to complete at 1000 region. This would also mean that Minute [a] = [c].

If we were to go in further detail and trace out the likely targets for Subminuette iii, iv and v, it would fit well with the target of 1115 for Minuette (a).

S&P 500 MACD

Also notice the MACD in the chart. MACD is came up from negative region and almost touched the zero line but got turned down. This is a very bearish sign. Normally this results in a signicant move down. Refer to the two circles in the MACD area. The same pattern was seen in July 2008 before the big crash.

Alternate View

The Alternate View is that the Minuette wave (c) has ended in the last session and with that it signals the end of Minute [x]. The next move is an upwards move to complete the w-x-y. At this moment, it is looking unlikely but we need to watch the market closely as this is a valid count.

The longer term alternate view is presented below.

S&P500 5-Year Alternate Elliott Wave Chart

 

Straits Times Index Weekly Review

Let’s start by deciphering the recent move down from 2905 on the STI. This move down is very choppy indeed and it is best labelled as a-b-a-b type of move. This type of move is typical of a corrective move. It looks very much like a double zig-zag or a complex w-x-y-x-z. The difference between the two is that the double zig-zag has four distinct legs in the direction of the corrective and the w-x-y-x-z has three legs in the direction of the correction.

Here’s my Primary count. I am still bullish for the STI in the short term (one to two months). The move up form 4 Oct is labelled as Minute wave [i] and [ii]. The STI is in Minuette (ii) of Minute [iii]. The Minuette (ii) has a little bit more to go to about 2700 region. Thereafter Minuette (iii) is expected to start and this being wave 3 of 3, it is expected to surge ahead to around 3000. This count will be invalidated if the STI goes below 2685.

STI Primary Elliott Wave Chart

Alternate Views

There are two Alternate views. The first one says that the move up from 4 Oct 2011 is only the Minor A of Intermediate (2). And the recent down move is Minor wave B. This would be followed by Minor C which is expected to take the STI to 3000. So this count is also bullish for the near term.

STI Alternate Elliott Wave Chart

The second alternate view says that the Intermediate (2) has ended at 2905 and the move down is the early part of Intermediate (3). But looking at this move, it is quite hard to label it as a impulsive down wave as it is rather choppy. But still, the impulsive count can be labelled although I’m not comfortable with the look and feel. We’ll keep this count as an alternate wave and monitor is as the market unfolds.

STI Alternate Elliott Wave Chart 2

 

Kepcorp (BN4.SI) – In a Daze

Kepcorp had five small consecutive down days and lost about 5.4%. It broke through the top line of what appeared to be a triangle but slid down from there. Hardly a breakout. There are two counts for Kepcorp.

Primary Count

The Primary count is that a Minor wave W has ended and was followed by an X. Minor Y is in progress. This looks like the most probable count at this moment.

KepCorp Primary Elliott Wave Chart

Alternate View

The Alternate view is that Intermediate wave (2) has completed and the next wave down is underway. Looks like Minute wave [i] and [ii] has completed and Minute [iii] is in progress. The problem with this count is that the volume on the wave [iii] is lower than [i] and [ii].

KepCorp Alternate Elliott Wave Chart