The market detective is a Chartered Market Technician (CMT). He uses technical analysis to identify market turning points and opportunities. He is primarily an Elliottician, he uses the Elliott wave principle and Fibonacci ratio analysis to uncover clues about the direction of the market. He uses other forms of technical analysis to corroborate his findings in such a way as to assign a probability factor to them.

1. 9/23/2008 9:07 PM Pacific
Looking at the daily NAZ e-mini, we are at the last line in the sand, and prospects for the
after hours rally to stick (this time) are looking good to me. The first thing I want to draw
your attention to is the RSI. Notice its most recent activity. It came from oversold (30),
tested the oversold line then turned back up. This is a good indicator when combined with
a strong price move, which we have. Notice that the same thing occurred when price
started to come down from the 1977 high.
Here is something I think is way more interesting. In the case at the top, 1 is where it
comes down from overbought (70) and 2 is where it tests the overbought line. Now look
at the most recent reading, 1 takes us above oversold, the current label 2 tests the
oversold line and bounces.
Note that the current wave labeled 2 stopped exactly at an .810 retracement of wave1.
The most common retracement for a 2nd
wave is .618 to .810. Note that wave 2 at the top
was .618 of wave 1.

2. 9/23/2008 9:07 PM Pacific
Let’s look at the 60min S&P E-minis to get a breakdown of the wave structure. Since my
bias is STILL 5 waves up with a 3 wave retracement in progress, that is the labeling. I
believe we are now in the early stages of another 5 waves up.
The obvious way to be wrong is to take out 118275. Technically a second wave can
retrace up to 99%, but my bias will change if we go down any more at all. We should be
finished going down for now.
In case I am wrong, here is the back up plan. If 118275 is taken out, I will immediately
go short and target 114088 based on the alternate count of the chart below. I won’t think
twice. I always have a preferred count, but I am never married to it. The count below is
ugly, but it is technically ok.
Just so you know, when I set a target, I trade in the direction of that target. I rarely,
take a position and ride it out. I’ve tried that; the draw downs can kill you.
Going back to the first chart, the daily chart of he Nazz, I have placed a red horizontal
line on the upside target, a Fibonacci confluence of the .618 retracement level down from
1977 and a 1:1 Fibonacci extension of the 5 waves up from 1611.
I will follow up tomorrow with short term targets along the path for both the Nazz and
S&P. Either way.

3. 9/23/2008 9:07 PM Pacific
TMD/DW
The market detective provides personal market opinion based on sound technical
analysis and research. However, no warranty is given or implied as to its true reliability.
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