A couple of stocks I like to follow are GS and JPM to
forecast pivot turning points in the US stock markets, particularly the SPX.

You can see how JPM and GS appear to be tracking the SPX
well and that it’s my belief that if we can track potential Elliott Wave counts
in both Goldman and JPM,we can find an edge to the US markets and use that
information to forecast major peaks and turns in the US stock markets.

If you overlay SPX, GS and JPM with each other, there is
a clear bonding between the 3 markets.

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On Tuesday night, I said we needed to maintain support over the 1394ES level in order to still view the upside as a reasonable possibility. On Wednesday we rallied off the overnight lows that held support over 1394. But the move up was an ugly pattern which seems to be best counted in waves of 3, so that we do not have to force an even more ugly count. This leads me to the conclusion that it is a possible leading diagonal. And, I have mentioned many times in the past how much I like to rely upon leading diagonals for trading purposes, but this is what the market has been giving us for 1st waves all too often.

Therefore, IF this is a leading diagonal, then either wave 2 has already completed in a very shallow manner, or we will see a much deeper wave 2, which is more typical of leading diagonals. But, if you remember the larger wave count I posted on the 60 minute chart today, the expectation was that wave 1 of wave iii was going to target the .618 extension at the 1406ES level, which is exactly what we seem to have gotten today. Therefore, based upon how we move up tomorrow, assuming we do see upside follow through, we will be targeting the 1412(1.00 extension) or 1416 (1.236 extension) levels for wave 3 of iii.

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As I published over this weekend on ElliottWaveTrader.net and MarketWatch, our count seems to be following through quite nicely. Although we did expect more of a pullback on AAPL for its wave 2, it only provided a very small consolidation before it took off towards our next targets of 606 (1.00 extension) or 615/616 (1.236 extension).

We will then expect a pullback which should maintain support over the 597 region, especially if the 616 level is hit, and then rally again towards out next higher target region of 622-631. Ideally, AAPL should be there by the middle to the end of the month, if not higher if AAPL enters into the type of extensions that we have seen in the past.

Originally published on ElliottWaveTrader.net.

Tonight I am going to go out on a limb and say that I think we will see at least the 1280’s and potentially lower by tomorrow morning. In fact, I would not be surprised to even see the 1230-1245 region by the 19th of the month.

Based upon our current chart, while it is still "possible" that we have bottomed in a green wave ii – which, if you noticed, I took off the chart this evening — I think that it is a much lower probability than as of this afternoon. Rather, if a wave 2 is going to bottom, it would be at a much lower level. Of course, if the market is over the 1321 level by tomorrow, it clearly tells us that we are heading up to 1352, but I don’t think that is the most likely scenario into tomorrow. But, this is the overnight risk I mentioned earlier, and is why I suggested to be hedged tonight if you remained short overnight.

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