Saturday, 20 November 2010

15:28 GMT - SPX Update

With only one bearish count remaining after Friday's action, (see Chart 1 in Friday's end of day update) I thought I'd better see what other bearish possibilities might exist, especially with the bearish count I'm left with being quite close to its invalidation point at 1207.43. So, here's what I'm looking at as the alternate bearish count in the event that we exceed 1207.43:

SPX 10 min bearish alternative:

The chart shows the main count from yesterday's end of day update, but I've added the the alternate which counts 5 waves down from the high at 1127.08 to the low at 1173.

Here's the close up:

SPX 1 min - bearish alternative close up:

Its not the best looking 5 waves, with wave [4] being so much smaller than wave [2], so there isn't a nice channel for it. However, that doesn't invalidate the possibility. A better channel is produced if I count wave [4] as a more complex correction that ended just before the little dive that the market took in what I've labelled as the end of wave X. So, that low labelled X would be wave [5] on this further possibility, ending in a truncation. The move up from there would be a single zig zag rather than the double zig zag I've labelled.

For the moment, I'll go with the alternate as labelled on the chart. It won't be invalidated unless we take out the high at 1127.08.