Thursday Update

2014 Alphahorn Swing SystemTwo new SELL/SHORT Alerts today for the Alphahorn Swing System:  The DOW is on Alert with a signal confirmation coming with a close below DIA $160.78, Energy is also on ALERT with a confirmation coming with an XLE close below $86.19.  The rest of the indexes remain on unattested buy/long signals.

The wave count has simplified to either a bullish or bearish alternative.  The bullish wave count is that minor wave 2 of intermediate wave (5) of primary wave [3] is tracing out (at least) a double zig zag abc x abc pattern.  According to this count, the second (a) is wrapping up and we should see a bounce for wave (b) before the final leg down to complete 2 around 1830 or perhaps 1816.  I was never happy with the way the counts that held minor wave 2 was in looked on the daily charts, but at last we are seeing the beginning of a correction that warrants being labeled a minor wave 2.spx daily bullish  Although it’s possible that pullback ended today, I believe the charts favor a lower low.  On the 30 min chart, I would expect positive divergence to develop on the MACD indicator (just below the price chart) and I would expect the 3rd indicator below the price chart to reach the green oversold area.spx 30  In addition to the 30 min chart, the NYMO chart is pointing to the potential for more downside.  I’m looking for a 3 barrier breach (only 2 thus far) and a NYMO close below -50 as a first step, then a retest of -50 and likely a lower close before we have a bottom.nymo  The bearish count is that primary wave [3] has topped and primary wave [4] has begun an extended correction.  Less likely, but possible.spx bearish

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
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