Thursday, August 6, 2009

SPX- Minor B

This appears to be a common interpretation for SPX's current structure.

I placed the top of Minor A at today's high of 1008. We may have a new impulse down or and abc corrective structure. Because the structure looks more corrective than impulsive, I have chosen to label the waves accordingly as a zigzag.

Minute (a) completed right off of today's top. Minute (b)appears to be forming an expanded flat. Minuette 'a' and 'b' has completed with 'c' in progress.

We can highlight some potential target areas for the rest of this structure using basic EW Principle and knowledge of Fibonacci ratio relationships among waves.

I have plotted two sets of price measurements for minute (a) and and minuette 'a'. The blue represents price targets for minuette 'c' of minute (b). The red represents the price targets for minute (c).

Though this form of forecasting is not exact nor guaranteed, Elliot Waves do tend to relate to one another via a fibonacci ratio.

For this structure, minuette 'c', if equal to 1.618 x minuette 'a' will complete minute (b) at approximately 1002. This would complete the expanded flat in form and length.

Remember in expanded flats, wave 'b' overshoots past the end of 'a' and 'c' extends well beyond the beginning of 'a'.

Assuming minute (b) concludes at 1002, I projected the distance of minute (c) by comparing it's relationship to the length of minute (a). Here are the following projections:

minute (c) = (a), (c) then equals approximately 989
minute (c) = 1.618 x (a), (c) then equals approximately 982
minute (c) = 2.618 x (a), (c) then equals approximately 970.

Once again these price targets are not guaranteed but can offer some guidance as to where price may fall.

These are targets I will be keeping my eye on. As we reach them and turn, I can then validate my primary count or rule out the count.

It should be noted that 975 would equal a 23.6% retracement of the entire move from 7/8 to today's top (1008). Though that may technically satisfy a price pullback, I believe it is widely felt that a more realistic pullback would fall along the 38.2% level, which would equal 955.

This current structure would not be able to meet that price target if it played itself out. This would lead me to believe that a potential double zigzag may form in order for price to pullback to these levels. This is getting ahead, but I just wanted to put that out there.

We will see what happens in the AM.


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