Thursday, 11 November 2010

15:45 GMT - SPX Update

Well, the bear count is still on the table with the low at 1120.40 not having been taken out and the drop at today's open. I'm thinking we may be seeing a subdividing wave (5) on this count, although its perfectly possible that wave (5) ended where I've indicated on the chart below in a slight truncation:

SPX 1 min - close up:

If the low indicated is a truncated wave (5) and, therefore, wave [1] on the bear count, the retracement for wave [2] could take us back up to the 1219 area (61.8% retracement, which looks like good resistance) but of course, it could go higher (78.6% is at about 1222). A move now below today's low would increase the odds that wave (5) is extending.

For the bullish count (the alternate labels) I've adjusted the labels to show a potential double three correction for wave [4], with wave (W) being a flat ending at yesterday's low, followed by wave (X) to yesterday's high and we'd now be in wave (Y) as a zig zag. Remember that this alternate is invalidated below 1194.53.