Monday, 26 July 2010

15:46 BST - SPX Update


SPX 1 min - ending diagonal for [c] of 2:

Taking out the wave (iii) high of the diagonal labelled would be an initial indication that it might be over. The next three levels I've marked on the chart, the wave (iv) low, the wave (ii) low and the 1065.25 level (which would be wave b of (i) in the diagonal), would give even better signals that it may be over.

However, the best sign that the correction is over is still taking out the 1056.88 low, so any short trades above that level need to bear in mind that we could yet have higher highs to come in the (i)-(ii)-i count shown, or the leading diagonal possibility I mentioned at the weekend.

The count for a straight impulse up from 1065.25 for wave [C] of a second zig zag looks like it may need another high if that is the count playing out. Taking out 1104.63 ought to be an initial sign that its already topped, but in this count, the most likely sign of a top would be taking out that wave [B] low at 1065.25. Here's the chart:

SPX 1 min - wace [C] of second zig zag from 1065.25: