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SPX, Dow Cycles, US Dollar, Silver, DAX, NDX, BKX, RUT: Got Charts?

Not much to add to Friday’s update — ideally I’m still looking for some type of larger correction in the foreseeable future.  I spent an awful lot of time charting this weekend, so I’m going to spend more time sharing those charts and less time writing. 

The first chart is a view from the 10,000 foot level, and shows how the rally has been pretty narrow, which isn’t usually how a massive new bull market would start.  A rising tide lifts all boats, as they say.  If you right click and select “Open in new window” (or tab), then click the chart once to zoom, you can see the chart at full-size.  This is a fairly large chart, and hard to see at Blogger’s default size.

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Next, a quick look at the German DAX, which is also still well off its 2011 highs. The trend seems to be weakening here as well.

Next the 10-minute SPX chart.  Not much to add since Friday.  This move could still have another down/up (or two) left in it — as I said before, if it is an ending diagonal, they have a tendency to run “one more leg” than you thought.  The short-term structure remains a mess. 

The preferred count is still that a top of some form is now in place at the 1378 print high… but this count is only preferred by a slight margin.

Readers who aren’t drinking heavily will note that the SPX violated its (assumed) 2-4 trendline in the chart above.  This is the first such trendline break since Jimmy Carter was attacked by a giant swimming rabbit.  Okay, maybe it hasn’t been quite that long, but it feels that way.

If the 2-4 count is correct, then this break is a bearish signal.  However, below is an alternate way to view the trendchannel, which is still very much intact in this view.

Next a random chart, which I’ll have to upload before I can comment on it.  I worked on so many charts, I don’t actually remember what the point of the next one is.  Oh, yeah, it’s the NDX melt-up channel, and shows three potential support lines.  The NDX did capture its 2650 target (on the nose!), which was mentioned a week ago.

The next chart is pretty darn cool.  I was doing some work with the Dow this weekend (we built a fence in my backyard together), and I seem to have found a fairly convincing time cycle buried in the price movement.  The boxes are all the exact same size, and very accurately measure the time of a move from various peaks to troughs.  The blue box/cycle seems to alternate somewhat between highs and lows, but the cycle always seems to land on one or the other.  The red box is clearly a low-low cycle.
Keep in mind that I didn’t cheat these boxes at all — they are all exact copies of one another, and the exact same size (well, the blue ones are all the same size as the other blue ones, and the red ones are all the same size as the other red ones.  The blue ones are not the same size as the red ones.  I figured I didn’t need to explain that part… put the liquor away already!).
Assuming this cycle is still active (it has been since March ’09), then this chart suggests a high is due very soon.  I should probably keep this chart secret… but what the hell, I’m in a generous mood.  Plus you probably won’t remember I showed it to you anyway, with all the drinking you’ve been doing.

Next the big picture US Dollar.  Note the gray alternate labels.  The possibility of a large a-b-c still can’t be ruled out. 

And the intermediate dollar chart.  The recent low sure has the look of an IT (intermediate term) low, and the dollar has closed back above its important trajectory level.

Next, silver.  Silver could be in the early stages of a fifth wave up at Primary degree — alternately, it could be forming a double-zigzag to new lows.  In both cases, further downside appears likely over the mid-short term, though it’s likely to correct upwards a bit more first — perhaps a back-test of the red/blue trendlines.

Next the BKX, which also appears very close to finishing a complete 5-wave rally.

Next the updated RUT chart.  RUT broke down from its rectangle, which was mentioned on Friday, and is now targeting 788/789.  As long as RUT remains below the breakdown level (approx. 810), the target remains active.

It’s also important to look at the bigger picture RUT chart, which shows major trendline support is just below the target area.  If you took that breakdown trade, it seems ill-advised to get too greedy after the target is reached — assuming it is reached, of course.

In conclusion, the red boxes are not the same size as the blue boxes! 

Also, it still appears likely that a correction is due in the near future — the question is whether it’s already started, or whether there’s more upside coming first.  Again, because of the ambiguity of the wave structure at the start of this rally, and the ambiguity in the short term structure right now, there are still several possiblities for the ending  — and for that reason, I suggest traders pay close attention to the support and resistance levels and the trend channels.  There is a lot of evidence which seem to support the conclusion that this is a fifth wave — but this rally has surprised us before.  So trade safe.

The original article, and many more, can be found at http://PretzelCharts.blogspot.com

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