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).

18:45 GMT - SPX Update

The main (bearish) count doesn't have much room left for wave (4) if that's what's playing out. If we push above 1220.40 on this move, then the bullish alternate count shown will certainly look like the more likely count:

SPX 1 min - close up:

17:33 GMT - SPX Update

I'm starting to think that the bear count on the following chart should be labelled as follows:

SPX 1 min - close up:

This puts us in wave (4) down from the high at 1127.08. Its possible that we may just have completed wave (4) at 1214.02, approximately a 38.2% retracement of wave (3). However, it wouldn't be surprising to see it play out for longer (especially given what wave (2) did) and hit the upper blue channel line.

If there is more upside in wave (4), then it has to stay below 1220.40, the wave (1) low.

16:07 GMT - SPX Update

With that move up from today's low, the alternate bear count shown in the last post is now the main bear count. I've also adjusted the labels for the bullish count which would suggest it may have bottomed at today's low:

SPX 1 min close up:

If we stay below 1218.95 on this current retracement, then the main (bear) count will still be OK. If we take it out, its possible that we completed 5 waves down from yesterday's high at the low made today, but we'd have to stay below 1226.84 for that to remain valid.

15:37 GMT - SPX Update

For the move down from yesterday's high, I'll stick with the count I showed on Chart 4 in yesterday's end of day update for the moment for the main and alternate counts. Here it is updated:

SPX 1 min - close up:

The main count is very bearish, but you'll see I've added another possibility, that we're currently in wave 3 of (3) down and possibly nearing an end to it (it may have ended at today's low of 1204.33). On this alternate bear count, once wave 3 is completed, we'd need to see the next rally for wave 4 hold below the low at 1218.95 which would be wave 1 on the alternate bear count.

If the main bear count is playing out, I'd like to see wave iii of 3 become at least a 1.382 extension of wave i. That would take it to about 1200. Currently, its about equal to wave i.

The alternate labelling for the bullish case which puts us in wave [4] down is still valid. On my count, we have to drop below 1194.53 to invalidate it. Its currently retraced about 50% of wave [3]. The lower it goes, the less likely it may become, even though not invalidated.