Work and family commitments have kept me from posting updates on my take of the short term picture.
The last update was here (on July 9), in which I stated that the I was shorting again on the basis that the rise I was referring to was quite clearly corrective. However, I covered my shorts not long after because the subsequent fall was also, in my opinion, sporting corrective (overlapping) structure and so wasn't supportive of a strong bearish case either. Unfortunately due to other commitments and illness I wasn't able to post at the time.
Lucky I covered, because I was not expecting the subsequent rise to be that sharp - what a skyrocket!
Anyway, that's all ancient history. Moving on, I now consider my earlier projection (June 25) for the larger view of this sequence as being MADE. I'm specifically referring to this comment:
The whole move from June 11 will likely NOT be the one to test/break 666. So in the longer term I'll be looking for a bottom for this whole sequence somewhere above 666 (have yet to hone in on targets), followed by a new test/break of 956 and then look for signs of a major top.
The current price levels, in my view, constitute a valid test of the previous highs at 956. The test may prove to be a failure by starting a new trend downwards without breaking 956, or it may continue higher to exceed 956.
However, from what I read of the charts I'm looking at, I believe it's more likely that 956 will be exceeded, albeit not for very long.
The main reason I am unsure about whether or not 956 will be broken is because EWaves can become compressed in blow-off moves (and I think this is a blow-off top) so it becomes difficult to associate each impulse with waves of the correct degree.
If I had my way, I'd like to see the SPX trace out a small correction very shortly. This correction would be quite shallow and choppy and should not get below the low 920's for any length of time or else something more bearish may already be in play. Then I'd like to see one more impulse to the upside to take out 956 and do whatever shaking out needs to be done to lay the groundwork for a new downtrend. Finding the top of that final impulse may be tricky. It could get a bit wild and spikey as the last few retail go long on 100x leverage (sad, but true).
One thing I would like to learn more about (when I get a few spare microseconds) is cycle analysis, but until then I'll take input from cycle analysts I respect. One of those is pointing towards July 21st (tomorrows session) through to the 23rd as a major confluence of cycle turns. Failing that, August 6th +/- 1 sesssion is also a major confluence point.
My projections on the SPX also tie in well with what I'm seeing on the currencies. The USD looks very close to ending it's current downtrend ($DXY is blowing out of a 4th wave triangle), and other currency pairs are sending similar messages. T-BOND's look set for another run of strength soon. The stars seem to be lining up for some kind of sizeable trend change, at this point.
PS - The Polish Zloty just gave another good short entry. Hope you forex traders got a chance to add to your LT shorts!
PPS - I'm not an island. I gather research and information from a wide range of sources, and share ideas with other traders on the blogosphere. My plans come about by the distillation of this research, filtering out (hopefully) the least plausible/likely/reliable information and honing in on the 'gold'. I mention this because I want to show respect and thanks to the great many other people and sources that assist my research. There are too many to list. Hopefully you know who you are.
Good luck,
JB3
