I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Tuesday, September 22, 2009

EOD Count Sept 22

Still building off my count from the past few days (Mid-Day Count Sept 22 and EOD Count Sept 21). Before before I jump in to my preferred micro, let me show you some alternate counts I have been thinking about:

I do not like these alternate counts because of their treatment of the B wave. There is nothing wrong with the count technically. And while not common, running flats are also not extraordinary. But I don't think that they are common at the Minor level (you seem them more frequently in subminuette and below degrees). So that is why I tend not to gravitate toward that count.

But to be completely honest .... I don't like any of the counts. Not even my preferred. I give maybe 40% confidence in it (Option 1), maybe 20% in Option 2, 20% in Option 3, and 20% in Option 4 (something totally out of left field). Nothing looks particularly compelling right now.

So given a bunch of not-so-great choices, you need to go with the one that best explains the count, which in my mind is Option 1:

Some have observed a "leading diagonal" on the SPX where my X wave is. Notice the conspicuous absence of a leading diagonal on the NDX nor any sort of clean impulsive structure to take its place. In short, I think the leading diagonal is a red herring and it is not the beginning of an impulse up.

I could very well be wrong, just my take on the action so far.

Here are the longer views:

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