Daily Stock Market Update – 09/19/11 © ™



  • There are 3 peaks to a completed wave count. A reversal of trend takes place after a completed wave count.   Often times it’s as simple as counting 3 bumps on a chart . . . Other times, not so easy.
  • In a downtrend the same rules apply except you are counting 3 valleys instead of 3 peaks.
  • Each step must stay confined to a channel.  Laying a pen or pencil on the chart will help you visualize the channel.
  • As the trend progresses, all of the steps that make up the overall current trend will also be confined to a larger channel.
  • When the market breaks a channel (regardless of the perceived wave count), the current step has been terminated.
  • A single wave may sub-divide into another 3 waves.  I will also call this an extension.  When this happens (1) the trend is still intact, (2) the channel has widened and (3) instead of a total of 3 steps, there will be 5 steps.  (The charts will help you understand this concept.)
  • Sometimes I will use the terms step and wave interchangeably, but usually a wave is considered to be larger than a step.
  • Wave Counts In Charts – Numbers of the same color represent steps within the same wave.  For instance, red 1, red 2 and red 3 are steps within the same wave.  Different colored numbers represent steps in totally separate waves.  For instance, a red 1 occurs in one wave while a blue 1 occurs in a totally separate wave (refer to charts for examples).
  • Reading the glossary helps a great deal in the understanding of this blog.
  • Glossary Link


  • DJI = Dow Jones Industrials; SPX = SP 500; ES = SP 500 Futures; COMPQ = Nasdaq Composite Index; TSX = Toronto Stock Exchange (Canadian blue chips); NYSE = New York Stock Exchange; SOX = Semiconductors


MY CHART LINK (updated constantly)

  • This link has my charts, which are always current and constantly updated during market trading.  They don’t lag market trading by 15 minutes which is true of many charts.
  • There are 9 pages of index charts.  Each page consists of (1) the same stock market indexes, and (2) the same time frame.  The time represented by each vertical bar is the same on each page but increases in length on each succeeding page.  The vertical bars on the 9 pages ranges from 1 minute to 1 month.
  • The final pages of these charts consists of growth stocks.  These are stocks that have constantly risen in price since 1990.  One qualification is that they must not be severely damaged in a bear market so they can’t rise to significant new highs in the following bull market.
  • The growth stocks show daily market action for the last 3 years and weekly prices since 1990.  This gives a good perspective to how they have behaved in the immediate past (daily charts) and how they behaved during good and bad times (weekly charts).




  • Short Term
  • Trend Is Rising
  • Break Of Resistance Will Confirm Uptrend
  • August 9, 2011 To Present
  • Multiple Bottoms Dating From August 9th

This is my first look at the market in a week.  I am unable to trade on a shorter term basis due to an ongoing family illness.  Therefore, a longer viewpoint is being used.  Hopefully this will be useful and not lead to a whipsaw situation.

The FED meets this week and the market is expecting something from them.  So we will wait and see what the FED announcement contains at 2:15 PM EDT, Wednesday.  Unless the FED statement is obvious, the initial market move may not be correct (first 30 minutes of trading following the statement).   A parsing of the FED statement can sometimes reveal objectives less than obvious.  The direction after the first hour may be more indicative of the market’s true direction.

Has Europe been fully discounted in OUR MARKET???  I doubt if anybody knows the answer to that one.

The semiconductors are rising and they are telling us that things are much better in their universe.  I see semiconductors as a leading index for the entire economy, so their trend is always important.

It will always boil down to seeing higher lows and higher highs on a 60 minute chart.  As you can see by the last chart below, we don’t have that yet.

09-19-11 SOX 5 MIN BARS

09-19-11 SOX 30 MIN BARS

Support and resistance levels in the chart below with a trend line across short term peaks.  We would want a break above the blue trend line on higher volume and a dynamic price move.  The upper red resistance line is only a guess and should not be taken as absolute.

09-19-11 DJI 30 MIN BARS

More support ans resistance on a longer term chart.  The upper red resistance line looks more important on this chart than in the chart above.

09-19-11 TSX 60 MIN BARS

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