Tuesday, 22 June 2010

21:22 BST - SPX Update

Well, the bears certainly took control today, but there still remain bullish counts on the table.

Here's a review of the 5 counts I'm following, looking at the moves from the high of 1131.23 yesterday (for persepctive, see the 60 min charts):
Option 1 - wave (ii) topped at 1131.23:

SPX 6 min chart:

I've shown here the [1],[2],(1),(2) count from yesterday. This would mean probably a reasonable amount of more downside before we bounce in a 2nd wave since once wave [3] is complete (and the count puts us only in (3) of [3]), we will need waves [4] and [5] before a 2nd wave retracement.

Within wave [3], once wave (3) bottoms (and it may have done so today), we will get a wave (4) - that must not end above the wave (1) of [3] low at 1108.24. If it does, it would suggest that the count showing a triangle 4th wave was likely the correct count for this bearish option (see chart for Option 3 below).

Option 2 - wave i of (c) of [ii] complete at 1131.23:

SPX 5 min chart:

This count makes the current decline wave ii of (c) - the triangle would be wave [X] within a double zig zag. You can see the retracement levels for wave ii on the chart. As last night, it may be that (c) actually completed at 1131.23 and we have now started wave [iii] down. We can't be sure of this until 1042.17 is taken out.

Option 3 - wave [iv] of a leading diagonal completed at 1131.23:

SPX 5 min chart:

I've shown the triangle count on this chart, but the [1],[2],(1),(2) would go equally as well. Taking out the (x) wave low is probably the confirmation that wave [iv] did end at 1131.23.

Option 4 - wave [b] of minor Y within a wave [X] completed at 1131.23:

SPX 15 min chart:

Taking out the (x) wave low at 1052.25 probably confirms that we're in wave [c] of Y. 

Option 5 - we completed wave iii of (i) of [iii] at 1131.23:

SPX - 8 min chart:

This makes the current decline wave iv. The retracement levels are shown on the chart. The wave iv count is invalidated if  the end of wave iv is below 1077.74 (the wave i high).