Monday Update: New Alternative Count

Interestingly on a day that saw a fairly broad sell off into the close, the only Alphahorn Swing change was the confirmation of the long/buy Signal for Financials. Stops have been put in place across the board in the event that we see a red open. The Portfolio will also look to add volatility at the open tomorrow. I’ll post when that trade is made and if the Portoflio exits any longs above the stops shown above.

I’m showing two wave count options that I am weighing equally for now. First the blue count (which used to be the alternative count) is that minor wave 2 of intermediate wave (3) is tracing out as an irregular flat. The [b] wave completed today and now minute wave [c] should find support at the lower trend line as we’ve been expecting. The new alternative red count is the more immediate term bearish count, but more bullish over the long term. The red count is that intermediate wave (1) is only now just topping or perhaps topped today. We do have a very nice ending diagonal for minor wave 5 and this count does satisfy all the EW rules. If correct, then we should see intermediate wave (2) retrace between 38.2%-61.8% of intermediate wave (1)s run. This presents a pretty wide target zone of 2836-2590. I favor the shallower 38.2%-50.0% retracement level. Obviously, the deeper retracement is what so many have been hoping for having missed out on their entries. SPX 60 min and 30 min charts below:

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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