Wednesday, 3 November 2010

20:21 GMT- SPX End of day Update

The bearish count as previously labelled was invalidated following the Fed decision today, but here's what I'm now looking at:

Chart 1: SPX 60 min - bearish count:

As you can see, its another ending diagonal.

Here's a close up from the wave (iv) low at 1159.71:

Chart 2: SPX 1 min bearish count close up from 1159.71 low:

Its possible that we're still in wave iii of this diagonal. rather than wave v as I've labelled it. If we take out the low at 1171.70 without a new high first, I'd consider this diagonal complete.

For the bullish count, I've re-arranged it to try to accommodate the action today. It could be counted as another diagonal to complete wave (iii) or wave (v) on the alternate labelling:

Chart 3: SPX 1 min bullish count:

If this diagonal is playing out, its possible that we're still only in wave [3], so we still have more upside to come to complete it. Taking out the low at 1177.65 would suggest to me that the diagonal as labelled is complete.

However, its possible that the whole sideways move from 1189.43 is a large triangle for wave iv (or (iv) on the alternate count) with the [E] wave at the low of 1183.56. The move up from there would be part of wave v of (iii) or wave (v). If we take out the low at 1183.56 at this stage then I'd consider that today's high marked the end of wave (iii) or (v) and that we'd now be correcting down in wave (iv) or wave [ii] of C.

So, on these counts, the levels to watch are 1183.56, 1177.65 an 1171.70.

While we're above these levels, the odds favour further upside, whether on the bullish or bearish counts.