Wednesday, 30 June 2010

21:49 BST - SPX Update

An exciting end to an otherwise quiet day. Here's how things look on the counts I'm following (see the 60 min counts for context)

Option 1 - Wave (ii) of [iii] topped at 1131.23

6 min chart:

Its looking very much like the alternate count which has wave [4] topping at 1085.95 is the correct count, making today's sideways action wave (4) of [5]. This means the new low today is all or part of  (5) of [5]. Once it ends, it will complete wave i of (iii) down. 

Wave (5) is currently 1.382 x wave (1). The level of  about 1025 is a 1.618 extension (and it may well get there since it does not look like 5 waves down from today's high is complete).

Option 2 - Wave [ii] topped at 1131.23

6 min chart:

On this count, we probably saw wave (4) of [3] of v at today's high.

If wave (4) ended at today's high (a 23.6% retracement), we are now into wave (5) of [3] down. This could bottom anywhere below 1035.18 - just keep an eye out for 5 waves down - it doesn't look lke a complete 5 from today's high, so there may be more to go to the downside. At 1025 approximately, wave (5) would be 1.618 x wave (1).

Option 3 - Wave [iv] of an ending diagonal completed at 1131.23

6 min chart:

On this count, I can't decide if we've seen  wave [4] or wave iv today.

The main count is that it was wave [4] that topped today and we are now in wave [5] of iii. Its currently a 2.618 extension of wave [1], but it doesn't look like 5 waves down have completed, so could still have more to go. The lower line of the elliott channel may be a target. Wave iii would be a 2.618 extension of wave i at about 1016.

If we saw wave iv of (v) top today. then the next 5 wave decline is likely to be the end of wave (v) and, therefore, wave [v] of the leading diagonal. 

Remember, it has to end above 999.83 to remain shorter than wave [iii].

Option 4 - Wave [b] of minor Y within intermediate [X] topped at 1131.23

15 min chart:

On this count, its seems unlikely that we had wave ii of (iii) today. I think it would probably have to be counted as part of wave (4) of i, taking the form of a running flat. That would put us now in wave [5] of i down. Wave [5] would be 2.618 x wave [1] at about 1027.

Option 5 - Minor wave X within intermediate wave [X] topped at 1131.23. Now in minor Y down

8 min chart:

On this count, it seems most likely that we are still in wave iii of (iii). 

Today's action was likely wave (4). The next 5 wave decline would be wave [5] of iii, leading to a rally in wave iv.  Wave [5] of iii would be equal to wave [1] at about 1022 which is just about where it would hit the lower line of the elliott channel. The larger extensions are shown on the chart.

In respect of all the above counts, as noted, the decline from today's high does not yet look like 5 waves. If we rally above today's highs without making 5 waves down, we may have an expanded flat 4th wave on our hands - something to watch for.