Tuesday, October 20, 2009

10/20: SPX, TRANS

Is it possible we topped at 1100.17? There are counts out there that would justify this, however, further price action is required to confirm we are seeing a new downtrend.

The wave 4 subdivision is still intact. Wave 5 has been divided into the Golden Section by wave 4. See previous post on this with an extended 5th.

This was an argument I previously laid out for the completion of at least this structure starting from 1019. By many counts out there, 1100.17 may only be the top of Minor 3 but perhaps it could be the top of Minor 5 to complete Intermediate (C) and thus P2.

It should be noted that price has also fallen back below the ascending trendline drawn from the Mar and July lows. The structure from the 1100.17 top may also be loosely counted as a 1-2, perhaps signaling a new impulse wave down.

One alternative I see is that a 9 wave structure (signifying an extension) is in progress for Minor 5. So far 8 waves have been counted with a 9th to come heading higher.

If this is the case, I think it is possible that it completes the 9th wave as it backtests the ascending trendline (green) and once again touching the 1100 mark before heading back down. But then again, several indicators are implying the contrary.

As for the trannies, it appears it has stumbled upon resistance at the 4053 mark. It has tried in the past 5 days to break above with out any success. The spinning tops are signifying some indecision or a potential reversal is at hand.

Perhaps the trannies have also formed a double top?


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