Thursday, April 14, 2011

EOD Update [9:29 PM Update]

[9:29 PM Update]

Two similar wedges right down to the breakout and backtest?

EOD Update

The inverted head and shoulders formation is still developing and that trendline connecting the shoulders remains in play.

A few things to consider for a move higher:

1. The wave structure down still counts better as a corrective.
2. A hammer reversal candle printed and closed above this trendline which I take to mean it is an important trendline.
3. The internal wave structure looks like a complete corrective count so one must assume that a potential bounce is in progress.
4. Price bounced at the 38% Fibonacci retracement off the 1249 low.
5. Price broke through the descending trendline off the 1339.46 high.

Here are few things to consider against a move higher:

1. Price still closed below the 20 and 50 SMA
2. The daily MACD sell signal was confirmed.


There are still so many ways to count the wave structure off the July. I still have several different scenarios to present, but to save us from massive confusion, I'll post my top two options at the moment.

Given the daily MACD sell signal, I believe Minor 3 is in and the market is working out Minor 4. This version is a tad bit different than the Minor 4 Option below.

I'm expecting a wave x bounce is in progress. See the remaining charts below for other reasons why a bounce is in store.


Based on this option a larger flat/triangle is in the works. We'll see and adjust accordingly as this progresses.

SPX - 60 Min

Here's a simple hourly chart. No matter how the internals are counted from the 1249 low, it is probably safe to say that 1339.46 ended that leg. I do believe it's possible to believe that it may have only been the first leg of a three legged move higher.

If the pullback is complete, based on this view/count, a wave 3/c up should follow to new highs. So we'll have to keep an eye on this structure since it would affect the Minor 3 Top Option I'm following.

SPX - 3 Min

Here's an internal count of the move off today's low.

blog comments powered by Disqus