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Monday, March 15, 2010

Monday updates

After the close, The trend remains up as we never made a lower low today. The SPX managed to close in the green, with what is most likely the "B" wave of the 4th. If correct, I would expect the next couple of days to remain boring and stuck in a trading range between 1140-1153 as we trace out the remainder of this 4th wave, with higher highs to follow.
As of now if wave 5 were to equal the 1st wave in length the upside target would be approximately 1209.37. The big problem though is that the 1st wave was slightly larger then the 3rd, so the 5th can not be larger then 3rd ,or else the 3rd ends up the shortest, so a target of 1208.84 would be the maximum amount without breaking that rule. I suspect the 5th would be much smaller as the market is getting weak as it is now.
Breadth for the day ended at 1.37:1, Decliners on slightly lower volume then last Thursday and Friday. The indicators are over-bought on the short-term, and neutral mid-term giving a little more room to finish the "B" wave before a sell-off for the "C" of 4 happens, although it is possible for the after hours trading to accomplish that.
1136.78 remains the level for making a lower low and reversing the current uptrend.
7:31, The SPX has done a great job respecting the gray bullish fib fans, and if it continues, the 1175 area is looking like a good spot to wrap up this current rally. Also of note, the indicators are now back into over-bought conditions on the daily charts and this current 4th wave should relieve some of those conditions, to make way for one final push up, before topping out and rolling over.

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6:59, If this count holds up, expect a couple boring days of consolidation as the 4th wave plays out. The optional A-B-C count would but us in a major sell-off here real soon, where we would start making lower lows and change the short-term trend to down, or bearish. 1136.78, would be the line in the sand to keep the trend up.

1 comment:

  1. Hello
    Love your work. In looking back from 666 low on S&P could this entire P2 be one big 1-2-3-4-5
    where we are now exiting the 4 and making newer highs up to 5 (who knows where that might be) or does that just not work in a P2. I am still learning about wave structures so the 1-5 might not be able to live in a P2.
    Just a thought.
    What do you think?