Monday, 23 August 2010

19:45 BST - SPX Update: 1 min very close up

With that move up, four out of 5 possibilities remain from the chart I posted earlier (with some slight adjustment here and there). Here it is updated:

SPX 1 min very close up:

Two bearish counts assuming we had a wave [2] top at 1081.58:

1) we're in a (1)-(2)-1-2 down from 1081.58 within wave [3] down - not looking like the best count given the size of wave 2 compared to wave (2). It will be invalidated if we move above 1076.67;

2) we had a truncated wave 5 within wave (1) which completed at 1069.63 and the sideways action since then is wave (2). The high at 1081.58 must hold.

Two near term bullish counts within the bear count - wave [2] still in progress, with wave (A) of [2] being the high at 1081.58:

1) wave (B) bottomed at 1069.43. Not looking likely since the move up from 1069.43 doesn't look too impulsive. However, if we label the 1081.58 high as wave (W), and 1069.43 as wave (X), we don't need an impulse for wave (Y), just a 3 wave move up. That could be workable;

2) wave A of (B) bottomed at 1069.43 or 1069.63 and we're now in wave B of (B) before another decline in wave C of (B) and then a rally above 1081.58 in wave (C) to complete wave [2]. This is definitely viable. We could even take out the low at 1063.91 and this would still be valid since we could be seeing a wave [2] explanded flat. Its only invalidated if we see a very clear 5 waves down from 1081.58 develop to below 1063.91 since wave (B) can't be 5 waves (but we'd have to watch for that 5 waves being only part of wave (B).