Thursday, May 27, 2010

5/27/10 - SPX EOD - HAMMER TIME [5:08 PM PST Update: 5 MIN CHART]

[5:08 PM PST Update: 5 MIN CHART]

SPX - 5 MIN  

Here is a 5 min chart for your viewing pleasure. This main count supports the bull view. The alternate count in gray supports the bear view.

What a day. The bull and bear counts are still in play, though I will say at this point, the bulls are starting to gain some traction.

The market tried to get over the 200 day SMA but closed just underneath but did close on it's high.

Remember, I'm still waiting for a death cross before I say our super duper bearish move is here. Frankly, on a longer term view, I don't know if there is a Primary wave 3 down. There are other bearish counts out there that point to lower lows but is not considered a Primary 3 wave so we'll have to see.

That is just getting way ahead. Until then, I'm going to try and remain as open as possible, to the dismay of many bears on the CiL.

For those who are not aware or may have forgotten, please refer to the link of my preferred daily count to the right for my overall view at the moment.

As for the current counts, let's start with the bull count.


After hovering around the neckline for most of the day, the market decided to climb higher and for once made a higher high since about a week ago. The inverted head and shoulders neckline was breached.

Will it follow through to the target of 1140? We'll have to see.

As I posted the past few days, I continued to focus on the MACD and RSI positive divergence as a guide for more upside to come. That so far has followed through.

The RSI also broke out of a downtrend line and successfully backtested it with a bounce off the old trendline.

As for the wave count, the main count shows that we completed minuettes (i) and (ii) off the 1040 bottom. We were working on subminuette iii of minuette (iii) into the close. So if this count is correct, we may gap up over the 200 SMA tomorrow.

The alternative to this bull count is that we are completing minuette (i) and that may wrap up soon, so there may be a headfake over the 200 SMA and then a pullback for minuette (ii).

I will try to post a 5 minute chart later highlighting the possible alternate count.


As for the bear count, I made some adjustments to the overall count and am now going with the nested 1-2 approach. This has not really been successful lately but it looks like the best option at the moment. 

I have us working on a double zigzag for minuette (ii). Once again, notice that since the minute [ii] top at 1173.57, the bear and bull counts are pretty much the same structurally so the bears and bulls can trade this pattern no matter which side you are on.

I have mentioned that now is the time where we start to diverge and will know shortly which count is truly in play. 

A move back over 1173.57 will void this bear count and frankly create a complete recount for the bears. My bull count has not changed for quite some time now.

SPX - AUGUST 2007 

I keep coming back to these two charts above and below. The comparison with Aug 2007 and the current period is drawing some major similarities. So far this is what is keeping me more bullish than bearish.

Look at the behaviour of the RSI, the wave structure, candlesticks, the relationship of price to the 200 MA and the relationship of the 50 MA to the 200 MA.

If this comparison plays out, it would fit my preferred daily count perfectly, which is calling for one last minor wave C higher. See daily count here.

I dunno know, does it repeat? Who knows but the behaviour by far is somewhat compelling. I will continue to post these charts until the comparison can no longer be made.

SPX - DAILY 5/27/10

Lastly, the charts below are self explanatory.



Check back later for more...


  1. A similar fractal as of the August 2007 low,up to the October 2007 high...... has us in a 40 trading days period, from May 25 to July 20,2010, for the next higher high....July 20th. then...+ - 5 days....mara

  2. mara again. We will be going into Earnings season in July, and the market will certainly be strong into that event, lus some Opex usual ramp that may add fuel to this rally....In between June 6/7 may see a correction...

  3. Mara,

    Thx for stopping by. I hope today was profitable for you (of course it was). It was for me!!! Thx for the info!! See u in the CiL!