Tuesday, 2 November 2010

20:12 GMT - SPX End of Day Update

The high at 1196.14 remained intact again today so we still have the possibility that we've seen a top to the rally from the August low at that high. However, the bullish count still allows for the possibility of a further high  in order to complete that rally.

The charts below show a close up of recent action. For the bigger picture please see the 60 min counts page where the bearish count is shown on the charts of Options 1 and 2 and the bullish count is shown on the chart of Option 3.

Bearish count:

Chart 1: SPX 1 min - bearish count:

The invalidation point for this count is 1196.14.  

If we did top at that high, we must take out the low at 1171.70. As explained previously, taking out that low doesn't guarantee that we've topped, since the bullish count can accommodate a drop below that low. However, it would mean that the bearish count would deserve equal consideration, whereas while we're above that low, I continue to consider further new highs for the rally from the August low likely. 

Turning to the bullish count, as mentioned, its possible that today's high marked a top for that count too, as shown as the alternative on Chart 2 below, though its possible that today's rally was only part of wave (v) on that alternate count.

However, the main count has that high as wave (iii), so we still require a pullback in wave (iv) and then a further rally for wave (v).

As mentioned in my earlier post, I prefer the alternate count out of these two, even if today's high does not mark the end of wave (v) on that alternate count.

Bullish count:

Chart 2: SPX 1 min - bullish count:

So, on the main labelling, if wave (iii) ended at today's high, we need a pullback in wave (iv) preferably to around 1159 (23.6% retracement) or 1136 (38.2% retracement).

On the alternate labelling, if we topped in wave (v) today, we should now see a good retracement of the rally from the August low for wave [ii] of C. A 50% retracement would be about 1118 and a 61.8% retracement would be about 1100.

So, on the counts as I've labelled them, the levels I'm watching are 1196.14 (above this level the bearish count is invalidated) and 1171.70 (below which we must drop if we've seen a top at 1196.14, though it doesn't rule out the main bullish count shown on Chart 2 above).

18:50 GMT - SPX Update on the bullish and bearish counts

Because 1196.14 still hasn't been taken out, the immediately bearish count still stands - for the moment. I've just jiggled it about a bit:

SPX 1 min - bearish count:

I've also jiggled the bullish count about abit:

SPX 1 min - bullish count:

At the moment, I actually favour the alternate on this chart, which would also be bearish now if we've completed wave (v) at today's high as the alternate labels suggest. Even if we haven't, its still less bullish than the main count.

Here's the alternate on a 60 min chart (the main count is shown on the chart of Option 3 on the 60 min counts page):

SPX 60 min - alternate bullish count:

14:25 GMT - SPX Update on the bearish count

This is what I've got left for an immediatley bearish count where the top was put in at 1196.14:

SPX 1 min - Bearish count:
Its not great, but its valid. Wave ii may or may not be done, but if there's more to come, it has to stay below 1196.14.