Wednesday, February 10, 2010

2/10/10 - SPX EOD [9:15 PM PST UPDATE]


In summary, these are the options I have at the moment going into tomorrow:

1. Based on the count of the bottom chart, I'm expecting a final push up to complete (ii). 1075 and 1080 are possible targets.

2. A third of a third pushes prices towards 1040 and continues building on minute [iii].

3. Address the alternate counts on both charts as the waves unfold tomorrow.

The bearish count has not been ruled out yet, however, the wave structure just looks way too corrective. I still felt it was something to keep in mind.

There is another potential H&S setup in the works. The target for this pattern is approximately 1040. If this follows through and does so in a 3 wave manner, then the alternate count on the chart is something to keep in mind.

Based on this alternate count a wave (ii) of [iii] expanded flat may be in the works. The labels are in red.

This count is probably the least likely option, but again something to keep in mind.

This is about where I think we are. An x wave of (ii) completed at a 50% retracement or there is a little more to go to the downside (1064 would be the target). Up next is the final wave y of (ii).

The orange Fib lines project for y (red) of (ii) . I think the .618 level is a good target. It intersects with the upper descending trendline. If it breaks out of the trendline, then 1080 is a target to watch.

As for the alternate count on the chart. It is possible a wave b triangle of (ii) is in the works. I didn't place Fib targets on there but assuming subwave e of b ends at 1062, wave c of (ii) would have a potential target of: 1078 (c=.618a) and 1088 (c=a).

Though my initial bearish nested 1-2s may be in play, I think it is less likely the case now. I'm not completely ruling it out but I think the count above makes the most sense at the moment.

The waves down today were more overlapping than what one would expect for a third wave down.

On another note. 1072 has yet to be recaptured. They have been battling here for the past two days. Something is going to have to give.


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