Wednesday, July 15, 2009

One Large Flat??



One does not want to stretch the imagination but must always look for the alternatives (glass half full right?). Can a larger flat be developing?

As it stands right now halfway through the trading day, SPX has reached a pinnacle (at least for the time being).

On the 60 min chart, I count two sets of 3 subwaves. One for wave 'a' (931.92-869.32) and wave 'b' (869.32 to present). Currently wave 'b' has retraced 90% of 'a', which at this time qualifies it for a larger flat setup.

Of course one would only see (or like to see) this formation if one were to believe that the double ZZ starting from the 956 high is not quite yet complete.If this were to be a flat this would complete the double ZZ and take us back to approximately SPX 860.

With the formation of wave 'b', does this form the 2nd right shoulder and keep the H & S formation in play?

Is it possible? I guess we will have to wait for the market to tell us.

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