Thursday, December 3, 2009

12/3 - SPX Options

Two options I'm thinking about right now.

For the bearish count, do I truly believe we have seen the conclusion of P2? I'm not completely sold, however, I do feel we may be seeing a trend change in the works. Perhaps it's just a wave c of a Minor B wave down before a final Minor C push higher to complete it all. I guess we will see.

On the bullish front, perhaps minute wave [v] of Minor C is forming a leading diagonal. By this count, I count waves 1 and 2 complete with wave 3 on tap tomorrow bouncing off the lower ascending trendline. A break below that trendline and I'll rule this count out.

Kenny mentions an expanding diagonal count for the DOW, which I also like. Will have to keep an eye out for this as well.

I have also included a SPY chart which highlights a few lines of support and the relationship of price with each successive MACD cross.

The wedge is tightening up from the orange one to the black one. I believe a break down below the black would be significant since this is a longer term trend line.

If price behaves the same way it has with each MACD cross, then I would be expecting a move to the purple trendline. Notice that would place price below the black and orange line and would fill the gap on 11/9.

Last but not least, a look at the DOW chart. Price has broken out of the red channel representing what I have has the final Minor 5th wave to complete Intermediate (C). Let's see where she heads.


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