Wednesday, 10 November 2010

21:18 GMT - SPX End of Day Update

Somehow, the bearish count that I've labelled (the main labelling on the chart below) for the decline from 1227.08 managed to survive again, because, so far, we've stayed below 1220.40 in the wave (4) that I've labelled up from today's low:

Chart 1: SPX 1 min - close up:

Its not pretty, I know, but its valid. However, for that count to remain under consideration, we now have to drop pretty much from the outset tomorrow and also take out the low at 1204.33 to complete 5 waves down from 1227.08.

While taking out that low would invalidate the way I've labelled the bullish count (shown as the alternate count) from today's low, the possibility that we're still in wave [4] would still remain valid unless we were to take out 1194.53 before we take out the high at 1127.08. 

As I've said over the last few days, until we take out 1194.53, the bullish count remains higher odds. If we push above 1220.40 without taking out today's low first, then the odds of the bullish count playing out would become even greater.

Here's the slightly bigger picture for the above counts:

Chart 2: SPX  1min - bearish count:

This assumes we topped for the rally from the August low at 1227.08 or will do so once waves [4] and [5], shown as the alternate count on Chart 1 above, have completed.

Its possible, however, that the high at 1127.08 was only wave iii, not wave v, as shown on Chart 3 below, but you can see it more clearly on Chart 2 on the 60 min counts page. If we take out 1194.53 and so eliminate the alternate count on Chart 1, this possibilty will still remain - therefore, taking out 1194.53 doesn't guarantee that we won't see the high at 1127.08 get taken out before we complete the rally from the August low.

Chart 3: SPX 1 min - bullish count:

With this bullish count, its possible that its not as bullish as portrayed in Chart 3. It may be that 1227.08 was wave (v), not wave (iii), as shown on Chart 3 on the 60 min counts page. So, any further upside would simply be wave [5] of v of (v) if the alternate count shown on Chart 1 is playing out.

So, the levels to watch on the labellings shown are 1220.40 (taking this out before taking out today's low will eliminate the bearish count as labelled), 1204.33 (taking this out without a new high will keep the bearish count on the table) and 1194.53 (taking this out will eliminate the alternate count shown on the above charts).