Thursday, 18 November 2010

17:50 GMT - SPX Update

The alternative bearish count was duly invalidated, but the main bearish count currently remains intact:

SPX 1 min - bear count:

Its possible to count 5 waves up from the 1175.87 low so I've changed the labelling from W-X-Y to A-B-C for wave (2) of [3].

The retracement so far has reached the 78.6% level. We really need to start dropping now if this count is correct. The invalidation point is at 1207.43.

An impulsive decline from around here would be a start, but I'd then want to see a quick move taking out the A wave high at 1183.56 to provide a degree of confidence. Until we see an impulsive decline, I'd have to say that the wave count probably isn't complete and the risk of further upside remains high.

Both the main and alternate bullish counts are also still intact.

SPX 1 min - bullish count:

Both of these would suggest a decline should be due if the wave count is complete. However, for the main bullish count, its possible that wave (x) could form a more complex pattern. An impulsive decline from here could reduce the odds of that.

Note the pink note at the top of the chart - this further alternate would make 1173 a wave (iv) of [iii] low, with the current rally being part of wave (v) of [iii] up. If we take out the high at 1183.56 on the next decline, the odds of that further alternate count would be reduced.  Taking out 1175.87 would pretty much eliminate it (though really, its only invalidated below 1173). While the market is positioned to make 5 waves up from 1173, this further alternate count remains on the table and would imply a new high above 1127.08 is likely quite soon.