Wednesday, March 24, 2010

3/24/10 - SPX EOD




It's starting to look like a triangle. As I warned in the trade example #2 and in the CiL, the more price begins to consolidate sideways and do so in a 3-wave fashion, the triangle pattern is the one to keep an eye on.

But having said that, since it is still too early to say that this will be a larger triangle (in purple),for the moment, I have minuette (b) of minute [iv] complete and (c) of [iv] working it's way down now to complete an expanded flat for [iv]. That will be the primary view. I see approximately 1147-1157 as a target for [iv]. A confirmation of that view will be a breach of 1152.88. If price cannot breach 1152.88 and bounce higher but doesnt make a new high, one should switch gears and really start to think about the triangle formation.

The entire minute [iv] count will be tossed if the market breaches 1112.42, which would result in a 4-1 overlap. If that were to happen, that would confirm that either Minor A is complete or Intermediate (Z) is complete.

The pattern off the wave labeled (b) appears to be a wedge. Two things stand out, it may be a smaller scale leading diagonal wave i for (c) or it is a subminuette b wave of minuette (b) [this is an alternate view if (b) is not complete yet].

So in summary as the top chart shows, minute [iii] of Minor A or C is complete and so far minuette subwave (a) and (b) of [iv] is complete.

We'll have to continue and watch the structure. I have highlighted a potential path of the larger triangle for [iv] in gray.

Another trade example is coming up for a play on minute [v] up to 1180-1190 off of minute [iv]. If subwaves [C] and [D] complete, that should set up a strong probability that the market will continue higher out of the triangle. The appropriate stop will be right at the end of wave a (1152.88). I'm getting a little ahead here but will keep you posted as this formation develops.

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