Friday, March 11, 2011
Zigzag Option Updated
Flats consist of a 3-3-5 wave structure. I was thinking that the structure in the middle of this correction surely looks like a flat is setting up.
So far waves a and b of (b) are three wave structures. If this is the case, wave c of (b) would be a clean five wave impulse up towards possibly 1330-1340 before (c) down.
[7:21 PM Update]
The 50 crossed up through the 200 just by a smidgen this week.
Nice positive divergence there and a move towards the mid channel. I expect an attempt to hit the top of the channel with that divergence.
[6:55 PM Update]
Just added the 3 min chart. The pullback into the close is wave c of 2/B. Looks like a target of 1301 is likely given the loose Fib confluence.
If a bounce occurs at 1301, it would result in a 38% retracement of the five wave move I have labeled, extended wave c 1.618*a of 2/B and bounce at the broken neckline of the inverted head and shoulders.
This is still my primary count. SPX is sporting a positive MACD divergence at the 30 and 60 min interval, closed above the 50 day SMA and found support at the 13 week EMA. 1294 has also maintained support
I show five waves up to complete wave 1. I'm looking for a wave 2 pullback near 1302, which would be the inverted head and shoulders neckline and a 38% retracement of wave 1.
The inverted h/s targets approximately 1314 and there is an open gap above at 1315, so I'm thinking the market will try to tag that level early next week.
There is a alternate count that has wave 1 up still in progress. We'll see next week if that's the case. I'll update the count if there is more evidence of that.
DESCENDING TRIANGLE OPTION
This option is still on the table. In this case, wave a completed and wave b started into the close. Wave c of (d) should tag one of the upper descending trendlines to complete (d).
This option is still in play and may have completed at today's low where (c) = .618* (a) at 1291.99. If it is not complete, we may have seen the completion of wave 1 and 2 of (c) with wave 3 down starting at the close. (c)=(a) at 1273 so something to keep an eye on.
I'll call this the wildcard. Just keep an eye on it.