Friday, May 28, 2010

SPX EOD UPDATE

Whew! So the indexes lost 8% for the month. The bulls and bears continue to struggle for a direction and the counts reflect that.


1. SPX - DAILY PREFERRED 
So where do I begin? I've added my daily preferred count, which I have not done for some time. I still show Minor B as complete, but as you will see in the charts to follow, that may be questionable.

 
2. SPX - 60 MIN PREFERRED 


As far as the 60 min chart goes, I had to make some adjustments to the near term counts. Yesterday I labeled the waves as a series of nested 1-2s but changed it to a potential leading diagonal (potentially an ED as shown below) to complete minute [i] up of Minor C. 

With the 60 min MACD nearing a bear cross, this sets up nicely for a minute [ii] down.

3. SPX - 5/28/10 - COMPARE TO CHART 4 BELOW


4.  SPX - AUGUST 2007

I continue to post charts 3 and 4, which  compares the current day structure with Aug-Oct of 2007. The similarities continue to remain and I think it behooves us to continue to monitor this for any clues as to where we may be heading. 

One recent observation I have made is that after the Aug 2007 low, within 4 trading days the market crossed back over the 200 day SMA. Flash forward to today and notice that we have had 3 trading days since the most recent low. Will we see the market back over the 200 day SMA on the first day of trading in June?

That could happen if bullish Mondays (Tuesday in this case) continue then again we have had 2 red consecutive Mondays the past two weeks. 


5.  SPX -TREND

 Chart 5 is a comparison of the Feb lows with the current structure. Once again there are some similarities with the rally off the Feb lows. 

The RSI looks like it double bottomed and has a lot of room to run to the upside. The daily MACD histograms continue to slope in a positive direction and a bull cross appears to be imminent. 



6. SPX - OPTIONAL COUNT
 
Here is an optional count that came to light today as I was trying to figure how the wedge formation off the 1040 low would fit into the structure since the 1219.80 high. We'll here it is.
 
This formation may also be counted as a potential ending diagonal for minuette (b). 

Notice the following Fibonacci confluence at 1020:
 
[y]=[w]
(c) of [y] = .618*(a) of [y]

This would be the alternate option to my minute B for my daily preferred count.

 7. SPX -INVERTED HEAD AND SHOULDERS OPTION

The inverted head and shoulders should be self explanatory. This formation looks a little more balanced compared to the previous one everyone had pointed out. The main clue that the previous one was most likely a no go was the lack of volume at the neckline breakout. Let's see if this one plays out.


8. SPX - 60 MIN BEAR

Last but not least is the bear count. The nested 1-2 setup looks just about complete. We completed a double zigzag for minuette (ii), which retraced minuette (i) by nearly 50%. The retracement is an adequate one and the structure looks complete. 

I picked up puts for a trade into the close for the following reasons:

1. The bear and bull counts indicate the leg up may have come to an end.
2. The 60 min macd was indicating a turn was near
3. One more failed attempt to close over the 200 day SMA
4. The puts were discounted by 40%.

Alrighty. That is all for the week. Enjoy the weekend and please thank a Veteran for their service!

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