December 30th Update

Last trading day of the year.

I'm now completely flat.  I exited silver Wednesday morning with a nice profit, making it the best trade of the year for me. 
I exited crude this morning at a small, but negligible loss.  I got out of crude due to a change in my view of the wave count, in addition to recent price action which I will go over now.

I previously had the intermediate wave (4) low at 94.77 on 11/25, making the move up to 102.59 on 12/5 an ending diagonal (5) that was truncated.  The move down to 92.52 on 12/16 formed another triangle, which could have been intermediate wave (1) down beginning a large correction.
If you look at the picture below, I have shown in red another interpretation that I now favor which is short term more bullish for crude.   The red lines trace out a three-wave move lower, with a three-wave B and a diagonal wave C.  In this count, the 12/16 low is where intermediate wave (4) actually ends.


Interestingly, we have already had a five-wave move off the 12/16 low on the hourly chart (below).  This has failed to make a new price extreme on the upside(see daily chart above), however, so I think it's likely we could have an extended fifth, despite the fact that (3) was also extended.   Because of the upside potential this presents, I exited all my short positions to see how things play out. 

After hours update

Today's post has been updated.

December 7th Update

Crude

I went short this morning.
I took a position in two different put verticals, one near term, and one longer term.
Bearish VERTICAL JAN12 36/38 PUT
Bearish VERTICAL MAR12 35/37 PUT
Both are two points wide, in order to capture more profits while still limiting loss and offsetting time decay.

Crude futures don't look much different on the daily chart, but the hourly chart is very bearish.  As I write this post a bounce is underway, so we'll see where it leads.
Momentum definitely points lower near term.

After hours update 8:39 PM CST:
Here is a current snapshot of the hourly futures, which appears to have completed a triangle formation for subminuette degree wave ii of minuette wave (iii).
The triangle completed at the exact 61.8% retracement of subminuette wave i.

December 6th Update

Silver

The overnight low in silver makes five waves down of at least minute degree.  See the first chart below for the futures.  Wave i was extended, and wave iii was not the shortest wave.  All the rules are satisfied, except one.  You'll notice that wave iv overlaps wave i slightly.  This sometimes happens in futures markets, so I took at look at the cash markets via the SLV (silver ETF), and the overlap is not there ( see the second image ).  The larger trend is undoubtedly down now, but the completed five waves likely trace out a higher degree ((i)), which means we'll now need wave ((ii)).   The bullish sentiment will now come back.  I also will need to move my stop since wave ((ii)) can and likely will retrace most of the move down thus far. Below I show a hypothetical retracement path to the 61.8% retracement target (green dashed line).  I could sell a put here, rebuilding my vertical.  Before I do anything, I'll wait for the first two waves to trace out on the hourly to see what form the correction begins to take (ie a 5-3-5 zigzag or a 3-3-5 flat for A-B-C).

Update: I didn't notice this earlier, but my proposed wave v of ((i)) has a converging momentum signal (ie a lower low in momentum matching a lower low in price).  This rarely happens in a fifth wave.  This is yet another reason not to jump the gun and sell puts here.  The confirmation of the above count will be when wave iv is exceeded to the upside, or in other words price moving above 32.45 in the futures.

Crude

We potentially have five waves down on the hourly chart.  If this turns out to be accurate, then the fifth wave on the daily time frame was truncated.

And now for a 3 month daily chart showing five waves up completed, possibly.

And finally, a weekly view is a little more complicated.  My best guess is that we are in an ending diagonal C-Wave of possibly primary degree heading down.  In this scenario, intermediate degree wave (2) is now over, and we are ready to begin (3) down which will be composed of another A-B-C zigzag or combination.

December 5th Update

Silver


Selling has begun.  The day opened with a nice upside fake, before rolling over and taking out some near term support levels.  On a 1H chart, all price support levels going back to 11/30 are now taken out.  I bought back the short puts in my vertical this morning, and will let the long puts run. 

I'll update my positions page to show long 31 puts now.  Last night's overnight high of 32.11 should serve as a good stop loss point, if we are indeed in a larger degree impulse wave heading down. 

December 1st Update

Silver

Triangle formation!

I was really late to the party identifying this pattern, but better late than never I guess.  It doesn't change my downside prediction, and in fact only bolters it.

November 30th Update

S&P 500

Today's impressive rally has confirmed my alternate count in my prior post.  I think a year end rally leading into the new year is pretty much in the bag at this point.
















My daily wave count in my previous post had some problems.  I was expecting another push lower before turning up.  I think I've determined where my count was wrong.

I had a 1-2, 1-2 count in my prior post, which was obviously just a triangle in an A-B-C move lower to complete (X) on the weekly chart above.

Summary:  The market is going to stay bullish for the next 4-6 weeks, but should not exceed the May 2011 highs.  The larger degree trend is still down I'm afraid.

Silver

Silver could be ready to plummet.  On the daily chart below we appear ready to begin minute wave ((v)) of minor wave 3.  Given all the stored up sideways action going back to September, this should be like a stretched rubber band being released.

November 28th Update

S&P500

Today finished with a strong rally off of a down week last week.  We started the day up over 40 points, and ended up around 2.9% at the close.


We're closing in on year-end and it's been a while since I've really looked at bigger picture, so lets look at Weekly and Daily charts of the SPY.

Starting from the May highs of 137.18 on the SPY we see a clear five wave decline which I have highlighted in red.  This is a weekly chart, so in Elliott terms that means the larger degree trend is now down.  At the low, I've pointed out that the market was down 21.6% at that point.  We then saw a very sharp rebound extending into October 24th.  Following that sharp rally, we sold off again, but failed to make new lows last week, and we're beginning to bounce again.
To summarize, we know we have five waves down on the weekly chart, but the waves that follow are not very clear.  Let's look at the daily chart, and come back to the weekly and look at possible counts.

We are now just looking at the rally off the October 3rd low of 107.43.  The sharp rally we discussed above appears to break down into three waves, of which the third wave is a diagonal triangle (not really shown, but if you zoom in you can see it).  That makes this an A-B-C zigzag retracement.  Strictly speaking, this could be all that is needed before the next leg down resumes.  Corrections can be complex, as well, however, and this could also easily turn into a combination.
Following the October 24th high, we have a wave down which could be either a first wave of an impulse or an A-Wave, followed by three waves (blue lines) which appears to be an impulse wave in-progress.
So regardless of the outcome on the weekly, we still need to finish the impulse wave down on the daily if this is an A-B-C.  That means short term, we need to break last week's lows.

The bottom line:  If the October 3rd low stays in tact, then odds favor a complex (2) up extending into the beginning of next year.  If the October low is exceeded to the downside on high volume, then we will definitely be in the next leg down of the decline which will be a third of a third, and will do a bunch of damage to equities.

Going back to the weekly chart above, I've drawn out some scenarios.

1. A complex (2) which will be W-X-Y in composition.  Another way to state this is A-B-C-X-A-B-C, where we already have the first three wave A-B-C up, followed by a three wave decline in progress forming the X.  In this scenario, we finish X to the downside, and rally up into another A-B-C to complete Y and hence (2) early next year.
2. We are already carving out the beginnings of 1 of (3) down.  The fact that we have not made new lows yet would mean this is an extended third wave which is typically the case in an impulse wave anyway.  In this scenario, we are in the third wave of an impulse, ie ((iii)) of 1 of (3) down.  I threw the 1 tentatively out there in my weekly chart, but realistically, odds are it will break the October lows when it finishes.

Final word:

You can skip all the Elliott Wave mumbo jumbo and just look at what the Ichimoku trending indicator is telling you on the weekly chart.  The signal cross happened back on July 11th, warning that the market trend was changing.  Price broke below the cloud the first week of August confirming the downtrend, and all rally attempts since then have failed to penetrate upper cloud resistance.   In fact the green signal line remains well below the red base line and the lagging line remains below price.  In other words, this is saying the trend remains down.

 Silver

I suppose I should talk about silver since I have an active short position.  The fact is, it's a total mess, and has been hard to follow intra-day.  I'll show you why that is in a bit.

Let's start with the daily chart though.

Coming off the September 26th low of 26.13 on the silver futures, we had a very drawn out, but simple A-B-C correction.   The C-Wave ended up being a diagonal triangle.  The termination of the triangle occurred on November 8th with a high that day of 35.35. Following that was an apparent three wave decline.  What remains to be seen is whether the decline turns into a full five wave decline, as I suspect it will. 

Now lets look at an hourly chart to see the three wave decline in more detail, and what follows.  You can see the third wave down the decline subdivides into a wave with its own third wave extension (blue).  Following the September 26th low, all we have are three wave corrective moves in both directions, and they do not form any sort of triangle.  The only conclusion I can draw at this point is a complex W-X-Y formation, which could be a fourth wave on the daily chart.   Furthermore, the X is its own complex ((w))-((x))-((y)) formation.  Y can end here, but if it does, it will end well short of W.  A very real possibility is that Y becomes complex allowing one more push higher slightly at or above W.

The hourly chart is truly difficult analysis, and may be way off mark.  Sometimes when it's this ugly, you can just stay on the higher time frame and wait for the next wave to start.


Crude

I realized that I haven't posted on crude since November 14th.  I did a short term forecast on Friday that I forgot to post, but I'll show it now in hindsight.  I don't have any current positions in crude, as I'm still in wait and see mode.
In the 4H chart below on the crude futures, there is an (a) wave down followed by an a-b-c expanded flat correction (see my Education page) for (b), where b of (b) is a triangle.  I projected c of (b)'s termination by projecting a fibonacci extension of wave a from the termination of b.  In other words, wave-C often relates to wave-A by a fibonacci relationship.   In this case I used the 161.8% and 261.8% projections, since c was coming from such a low level.  In an A-B-C formation, C normally terminates at or beyond A.  This is a guideline, but one that is satisfied much more often than not.
Notice how price reversed off the 261.8% level almost to the tick!

We need to complete (c) down, which I believe is in progress.  A completed five waves down on the 4H chart will be the likely termination point for a fourth wave on the daily time frame.

November 23rd Update

S&P 500

The market continues to make lower lows. 
My indicator is indicating a divergence with price.   It has a volume component, however, so I wonder if it's just a virtue of the light holiday trading.

In any case, I've decided to play safe and go flat as of yesterday, in case we get a bounce next week.

I've discovered another indicator that I like which moves very similar to mine, which is the RMI or relative momentum index.   It is based on Wilder's RSI, but adds a momentum component.  I believe momentum is key.  The indicator by default oscillates between 30 and 70 for overbought and oversold.  I've always thought such thresholds were arbitrary  and seldom reliable.   I do like looking for divergences with price, however, and whether it is holding above or below 50, which is the midpoint.  I've modified RMI on my platform to show only the 50 line, and use 12 periods for momentum and 26 for look-back.   The defaults on my platform are 5 and 20.  You can see how similarly it moves to my wave momentum indicator, despite differences in how they are calculated.

November 21st Update

S&P 500

Prices are down sharply to start this shortened holiday week, and I'm fascinated by all the (anecdotal) talk I'm hearing from professional traders about non-confirmation in the VIX, lower volume, etc.  Prices can move just as much, if not more, on thin trading volume.  Additionally, it can become a self-fulfilling prophecy that when volume actually does come back into the market in a big way, psychology ensures that the selling continues as traders and investors react to broken support levels, etc.

Even leaving Elliott Wave analysis aside for the moment, when I look at a 4H chart of the SPY ETF, all I need to do is look at my momentum indicator which continues to make lower lows.
I also interpret ichimoku trending indicator which has all convergent signals pointing lower.  There is not one bullish divergence anywhere in the indicator.  Essentially, the interpretation is to stay short which is exactly what I intend to do.

• The signal line is well below the base line and expanding.
• Price is below the cloud and both moving averages, and continues to increase the gap.
• The lagging line is below price
• The forward looking cloud is red and falling

2:30pm update

The market is starting to rebound, but I don't see a bottom in sight yet.  We could trade up as high as 121 on the SPY or about 1208 on the /ES, but that should be about the limit.

November 18th Update

S&P 500

Not a triangle!

Whenever my count is wrong, like above, the first thing I do is delete all the labels and go back to the higher time frame and re-evaluate.

With price heading lower on strong momentum, what we probably had was a 1-2,1-2 situation, or in other words, the beginning of an extended third wave pointing down.  I had optimistically hoped for a rally into year end but I think that's looking pretty unlikely now.

I may update this post later today as things develop.  I should note that I got short this morning about an hour ago, so I'll update my positions page.

November 16th Update

S&P 500

The market still appears to be on track to meet up with the lower boundary of the triangle.  Despite the newsworthy bullish reversal intra-day, it simply looks like it could be a second of five waves down to complete the final leg of the double zigzag formation terminating subminuette wave e.   Said another way, starting from the termination of d we'll have (a-b-c)-X-(a-b-c) down more correctly labeled as a W-X-Y combination.  I expect the final Y wave to clearly subdivide into five waves similar to what I've drawn.

November 15th Update

S&P

Triangle completed?  Maybe not...
We have a completed zigzag, but it fell well short of the lower boundary of the triangle.  I'd like to see another push down to complete subminuette degree wave e.  We got an end of day rally, so the two possibilities for tomorrow's session is a continuation of the rally, exceeding wave d high, or another zigzag lower, creating a zigzag combination for wave e.  The implications of the former are that the rally into year end is now underway.

November 14th Update

E-Mini's potentially appear to be tracing out a triangle pattern.   A triangle always precedes the final move of one higher degree, meaning we should get another push higher soon.  Short term, we are heading lower.  The subminuette degree wave c should not be exceeded to the downside for this wave pattern to be correct.  A final A-B-C move down will likely complete wave e, unless it extends.  If it does extend, this is still a contracting triangle, so the result will be net sideways.
I should note that one of the things that bugs me about my labeling is the fact that my subminuette degree wave a is truncated.

As an aside, for you Ellioticians out there, notice all the signs of alternation in this triangle.  Each leg of a triangle is composed of an A-B-C or an A-B-C combination.  Notice how sometimes the A-Wave is a larger structure with clear five wave subdivisions, as in the case of subminuette degree wave a above,  and other times it's the C-Wave, as in the case of subminuette degree wave d.  Also notice how subminuette degree wave b differs from the others by extending into a zigzag combination, and additionally how the A-Wave of the 2nd zigzag in the combination is a leading diagonal.
This structure is a beautiful contracting triangle if it plays out, and I plan to include this on my education page, since I think it adds some valuable nuances to what is actually covered in Frost and Prechter's book.

In summary, let's watch this move lower closely, and see if it stalls at the lower trend line.

Update: 10:18am

Crude futures: /CL

Crude just completed a five wave move, intra-day.  A 4H chart is shown below. 

Looking at a bigger picture daily chart, we can see that the move up from 10/4 lows is three waves.  Either the move stops here, in which case it's an A-B-C retracement, or we head up once again to complete five waves. 

My bet is that after a small correction we head up for one more move higher, completing five waves.  See below for Weekly and Daily charts side-by-side.  On the left I show a weekly view.  The count I show below is now the only count that makes sense to me.  The second wave down (the wave following B) is the shortest wave, so it has to be a first wave.   The recent rally/retracement off of the 10/3 lows is too strong to be anything but a higher degree retracement of the entire down move (or a new bull market, but I put the odds of that somewhere near zero).   The conclusion that leaves us with is an A-B-C down move where the wave ((v)) of C is truncated (see the right picture for the final fifth wave down).  The fact that C ended on 9/19 prior the the actual low also implies that the next two waves shown in red on the right are A and B of an expanded flat.
So to summarize, we had an A-B-C down, followed by an A-B (making a new low) and three of five waves of C up which will eventually retrace most of the move down going back to May 2.  This entire formation going back to May 2 appears to be the early stages of a diagonal pattern moving downward.
If all this is correct, we should get some selling from here, terminating somewhere in the area of the fourth wave of one lower degree, or around 89.19 area.  Following that, we should head back up one final time to complete a five wave move.  Ultimately, I am targeting 100.65 for the top in crude, which is the 61.8% retracement of the whole A-B-C move down, and high of wave ((ii)) (not labeled) of C down.

November 10th Update

E-Mini S&P Futures

When 1213 was taken out on the E-Mini's, the triangle formation was invalidated.  The move from 1208 on 11/1 to 1273 on 11/8 was therefore just an A-B-C correction of the last move down from the high on 10/27.

Yesterday's low completed a new five wave move down intra-day, which means we are ready to make new lows.  I will be looking to get short sometime Friday with a stop at the 11/8 highs. 

1248 and 1262 in the /ES are both good targets, which are both where A will have a fibonacci relationship to C.  1262 is the preferred target however, since it is also the 78.6% of the move down from 1275 on 11/8.  It is quite likely it will not reach that target by the end of the trading day tomorrow, at which point I will have to decide if it's worth getting in early.

November 8th Update

Grinding higher, but rally coming to an end.

This rally coming off the November 1 low has been nothing short of spectacular.  It's still a second wave, however in my estimation, which means there should not be new highs. Additionally, the October 27th high was just the end of a retracement of the move down from the May 2nd high.  And finally, the May 2nd high was just the end of a retracement of the scary bear market that started in October of 2007.

What all this means is that we are still in a secular bear market, and the last vestiges of hope are about to be extinguished as the short term bullish bear market rally exhausts itself, and the downtrend resumes.

The "when" is always the tricky part, but it could be as soon as November 11th.

Below is a 4H chart showing a completing ending diagonal formation. We are currently in the third wave of five in the formation.

My ultimate target, assuming the third wave ends here, is 1281 on the E-Mini's.

October 27th Update

SPY

My short discussed on 10/19 didn't work out, and I was stopped out.  This rally has been very sharp and intense.  I had expected a better B-wave pullback.  That's fine, as that's what protective stops are for.
Below are daily and 4H views of the SPY.

We appear to be completing the fifth wave of minuette degree (c).  I heard a wise phrase from a trader once who said, "let the market commit to you before you commit to the market".   I will be waiting for a breach of the subminuette degree wave iv of (c), or around 119 on the SPY.


USO

Crude appears on the verge of completing a possible a-b-c retracement, or bear market rally.  I will err on the side of safety here and wait for an upside pop over the subminuette wave iii high which appears to be in progress, followed by a breach of the subminuette degree wave iv low.

It would be prudent to consider the possibility that my proposed (c) wave could possibly be a iii of (a), making this whole rally a very strong (a) wave.  I think the chances of that are remote, however.

October 19th Update

SPY

I'm now short the SPY.  BEARISH SPY 121/118 VERTICAL PUT.
My decision to go short is based on three things.

1. First the put/call ratio for equities is down to an important relative level (see PPO indicator on the left graph). 
2. Second, I can potentially count five completed waves of minuette degree.  
3. My wave momentum indicator is big time divergent with price.  Notice the high occurred around where I have the wave (iii) label on the price chart. 

If the next corrective move lower is part of minute wave ((b)), then we'll likely get a 50% or 61.8% retracement of ((a)).  I favor this scenario, since it sets things up for a continued rally into year end.

October 13th update

S&P

We are certainly at an interesting juncture.  If my minuette degree waves are correct, then we completed five waves up around noon on 10/12 for the entire rally going back to the 10/4 low. 

The question now is, what from here?  Elliott Wave theory says that five waves defines the one larger trend.  The problem is that it also terminates the one larger trend.  Below I show two possible Elliott Wave scenarios for this market.
The first scenario suggests that the 10/4 low was an intermediate degree wave termination, meaning that this rally is only an A-wave of an A-B-C rally.

The second scenario suggests that intermediate wave (1) actually terminated last month, around 9/22.  We saw another low on 10/4.  The A-B-C correction in this scenario, where the B-wave makes a new low is known as an expanded flat.  It's actually fairly common in fourth waves.

 

Below I show how the second scenario could look.  The fact that the proposed minute degree ((a)) and ((c)) wave are related by a fibonacci 161.8% lends extra weight to this count.  Normally, you could simply go to a lower time frame and count three or five waves to determine whether a wave is a B-wave or a fifth wave.  In this case, however, the fifth wave was a diagonal, which develops in corrective mode.  That makes determining the actual endpoint much more difficult.

One of my main problems with the above scenario, however, is that minute wave ((v)) (not shown) of minor wave 3 is truncated.  Truncated waves are very, very rare.  If this turns out to be correct, it will be the first truncated fifth I have encountered, and on the daily time frame no less.

In summary, we are due for a correction.  At a minimum, we are due to correct the five waves of minuette degree going back to 10/4.    Alternatively, the correction will be five waves down of minuette degree and begin the next leg down taking out the 10/4 lows.
To know which is the case, we will watch price action closely.  A B-wave unfolding will be three waves down or some variation, with the component A-wave and C-wave likely showing a fibonacci relationship.  The 50% and 61.8% retracement area of the prior five wave advance are also good spots to watch for momentum to stall on the hourly time frame. 

Oil

This post is already getting lengthy, but I have to talk about oil, because I got short today.

I had been pretty sure for the last couple of days that the advance was over, but I really wanted to get a breach of the prior fourth wave.  In this case, I was satisfied with a move below the fourth wave of subminuette degree, since minuette degree wave (v) formed an ending diagonal pattern, which is terminal.  A breach of the fourth wave of the diagonal, therefore meant the diagonal had ended, and the diagonal itself meant the one larger degree (or minute degree wave) had ended.
My trigger entry point was at 32.50 on the USO, bearish via a VERTICAL USO 32/29 PUT spread. 
We traded back up to the 61.8% retracement of the entire minuette degree decline, but turned back down into the close.  I will call no-joy on any move above this week's highs, or 33.50 on the USO.

October 11th Update

Looking for new lows in SPY and USO.

SPY

I revised my previous count, since I see a potential a-b-c formation completing on the hourly chart  (It's barely visible on the daily chart).  Minute wave ((c)) appears to be an ending diagonal formation.  Even if this labeling is correct, this could still easily turn into a corrective combination after a significant correction.  I still think the best course of action is to look for a short entry and re-evaluate near the bottom of the range.  My entry will be a downside breach of minuette wave (iv), or 118.60.

USO

Similarly, I think USO could be completing it's advance.  Unlike SPY, this move up looks impulsive.  There's a distinct difference in their wave patterns, however.  I think this impulse wave up since 10/4 could be a C-wave in an expanded flat (a flat where the B-Wave makes a new price low).  In other words, minute wave ((iii)) bottomed on 9/27 in this scenario, and the new 10/4 low was actually minuette wave (b) of an (a)-(b)-(c) correction.

The chart below is of crude futures.  I'm looking for a move below 32.50 on the USO, which I am proposing for micro wave ((4)) of subminutte 4 of minuette wave (c).

October 7th Update

S&P 500

An A-wave up followed by an A-wave down?  When I just started learning Elliott Wave theory, some of these concepts were very difficult to grasp.
Just look at the situation we have here.

We have a bear market rally, beginning with an impulse wave higher.   It is correcting the larger degree trend, so it will ultimate subdivide into three waves or a combination of three wave structures.   The fact that the first wave up is an impulse tells us it's a zigzag, or wave W will be a zigzag if it turns into a combination.   We only have the A-wave.  I've chosen to label it as minute wave ((a)), though the specific degree may have to be amended later (you do not always know the exact degree in real time, but to paraphrase what Prechter and Frost say in their book, it's usually not that important in making relative forecasts). In any case, assuming minute wave ((a)) up is accurate, we still need ((b)) down.  Wave ((a)) is five waves, but ((b)) will correct the one larger degree trend, which is the entire ((a))-((b))-((c)) rally, or minor wave 4 up.  Therefore ((b)) down will subdivide into three waves, (a)-(b)-(c).  So if you think about it, you will always have an A-wave followed by an A-wave.

It's currently 1:30pm central, and we have only one and a half hours remaining.  I think we will rally into the close as I predicted in my previous post.  There should be plenty of opportunity to "buy the dip" next week.  I wont be actually buying of course, but rather selling the right to be short.  After a full week of vertical rally, it will take a decent sell-off to force profit taking, and turn folks bearish again.  If ((b)) ends up being shallow, I will simply step aside.

And speaking of folks getting bearish again, I wondered how bullish this week's market action turned traders.

Basically, traders are by no means bullish yet.  They need a lot more convincing, which is where wave ((c)) up will come in.

October 6th Update

S&P 500

We still haven't gotten the pullback that I've been waiting for, but this is how bear market rallies work.  I do think we'll get some selling tomorrow, but it's not the buyable dip I'm looking for, and I fully expect a rally into the close to complete a bullish week.
Nothing has changed since my last post, in terms of my strategy and expectations.  I still think we are in a minute degree ((a)) wave up, as I cannot see this pattern as anything other than a singular impulse wave with strong extensions.  We still need ((b)) down and finally ((c)) up. 

October 5th update

I haven't posted in a few days, since there really haven't been good opportunities to discuss.  At some point I may widen my scope to other products, but for now I have my favorites, and I find being patient and waiting for good setups is the way to go.  Having said that, things are starting to look interesting again.



S&P 500

This 2 day rally is not over.  Why is that?  As bearish as the daily (top) chart looks, look at the 2H (lower) chart.   We have five waves up accompanied by a clear cross of the signal line over the base line.   We are in a bear market, so this is a bear market rally.  But even knowing that, what is not entirely clear to me is the degree of retracement that is ahead.  Going back to the top chart, if say the orthodox top of this decline occurred on 7/7, then this will be an intermediate wave (2) and likely be sharp, and retrace as much as 61.8% of that decline, targeting 125.03 on the SPY.  Alternatively, if the top actually occurred in early May, which was the technical high, then the five wave move down starting in July was only a third wave of minor degree.  In that case the retracement will likely be sideways, and a typical shallow 38.2% of the third wave, or only 118.42 on the SPY.

I've decided I would like to play this move higher, so I will try and sell a vertical put spread tomorrow.  That strategy will make money in either of the above scenarios.  Additionally, if we get anywhere near the 61.8% retracement, and definitely if we surpass it, I will know this is an intermediate degree wave (2).
The unlikely, but possible scenarios are:

1. That we are in a new bull market.  It's almost impossible to say that with a straight face, but just to entertain that for a moment, we would get a five wave move higher of minute degree, and eventually exceed the May highs.  The above strategy is still profitable. 
2. That my wave count at minuette degree is wrong all together and "the dip" I'm expecting tomorrow makes new weekly lows.  This is where I could get into trouble, and I will be placing my stop at the Tuesday low.

I'll be looking for a good entry tomorrow.  If the /ES retraces all the way to the base line on the 2H chart (lower) or around 1104, which I think very likely, I will look to put the trade on there.  Additionally, I will want the signal line to either remain above the base line, or cross back above it.  I tend to watch the futures, and play options on the ETFs, so something like selling an SPY 110/107 NOV11 PUT spread is what I'll be looking at.  I'll receive a credit for selling the spread, and higher prices, time decay, and lower volatility will all work in my favor.  The tricky part will be how long to stay in the trade and where to take profits.  If the next impulse wave higher ends up relating to the first wave at a ratio of 100% or less, then I will give the shallow retracement scenario the benefit of the doubt.

Oil

Oil has been stair stepping down in a very odd fashion going back to May.   The waves are all very close in time and amplitude, so I do not have high confidence in my wave counts at degrees below intermediate.  The trend picture is undoubtedly bearish on the daily chart.  Much like the stock market indices though, we are getting a short term rally, which is probably an opportunity to look for a short entry.   It may be worth trying to watch for a signal line cross back down over the base line on the 1H chart, for a short play.  The wind is already at our backs, as they say looking at the higher time frame.  I haven't really looked at it yet, but buying a vertical put spread slightly out of the money and a couple strikes wide is probably the way I'd want to go.

Silver

Looking at the lower 4H chart, my best guess is that it's in a triangle wave b of  maybe subminuette degree. If so, it'll continue sideways to down, and eventually break out to the upside.  That breakout will not make it very far, however.  It will most likely stop and reverse at an area near the 38.2% retracement of the prior down move or around 31.659 on the /SI.  This is another case of letting the rally happen and watching for the next break down.