Monday, 9 August 2010

19:28 BST - SPX Update

Here's one of the charts I showed earlier which suggested more upside to come to complete a correction from the 1 July low. Its the chart of the single zig zag I have on the 60 min Option 2 chart which had Friday's low as a 4th wave within the c wave of the zig zag:

SPX 1 min - single zig zag, c wave in progress:

It looks like we're into that 5th wave now, looking for a high somewhere above 1128.75.

I mentioned in Friday night's late update the possibility that we might not get much above that level or might even truncate. Here's a close up of today's action which shows a count for a new high in the works, but also shows how we may already have topped with a truncation:

SPX 1 min close up from 1126.03:

The blue dotted lines show a possible triangle for wave (4) and 5 waves up from there to 1127.01. That could be our 5th wave ending in a truncated top. It would mean counting a small leading diagonal down for the first leg down of a larger downtrend, as shown by the dotted red lines.

Obviously, taking out today's high would invalidate this truncated top possibility, but if we don't take it out, it doesn't look too bad.

For the moment, however, since the overall trend is still really up, its safer to assume that we will make a new high. But, if before doing so, we take out 1124.24 or, better still, 1122.57 or 1120.91, the odds start increasing that we may already have seen a truncated top at 1127.01.