Monday, 13 September 2010

15:59 BST - SPX Update on the bearish case

There's not much room left on the bearish [i]-[ii]-i-ii count as you can see from this 10 min chart which shows two ways to count the move up from 1039.70:

SPX 10 min - [i]-[ii]-i-ii down from 1219.80:

The re-jigged ending diagonal count still has another up and down move to come - obviously, the up part of that would have to be very limited since it has to stay below 1129.24.

The [W]-[X]-[Y] for wave ii can be counted as complete now (or pretty much so), but unless we see some strong downside action, the likelihood of a continued push up is high.

Here's a closer look at this count:

SPX 1 min - [i]-[ii]-i-ii zooming in from August low:

If we take out 1129.24, the best count for the bear case is the single zig zag from 1010.91 for minor 2 as shown on this chart:

SPX 60 min - single zig zag from 1010.91:

If we do take out 1129.24, I'd be very tempted to count that as the whole of wave [c] of minor 2, but we'd really have to wait and see the manner of the next decline.