Monday, August 29, 2011

EOD Update [2:25 PM UPDATE]

[2:25 PM UPDATE]

Let's keep this option in mind as well should the market find itself moving in an indecisive fashion.

Below I also forgot to mention that the Adam and Eve Double Bottom most likely confirmed today as well.

EOD Update 

I guess you can say Saturday's post was correct. We now have the SPX, DOW, RUT and COMP all above their 8/17 reaction highs, which invalidates the large triangle as suspected.

The primary count I am watching now is

SPX - 10 Min

Off the 8/22 low, I see a minimum of three waves up. As you can see there are a still several options at play. For now, I'm gonna say that wave 3/c blue completed into the close in what was an ending diagonal.

As you can see I left room for the completion of wave 3 yellow. Should a five wave impulse be forming, the market should not pullback into wave 1/a blue at 1190.68. However, should this overlap occur, we must not rule out a much more bullish nested 1-2 up either. I'll address that if need be.

I believe the market is working towards the 1228 level with a potential to challenge the 50 day at 1259. See the Bollinger Band 'W' bottom below.

SPX - 60 Min

Here's the hourly view. 

SPX - Daily

And the daily view.

Daily Bollinger Band - 'W' Bottom

Looks like step 4 of the bottoming process was confirmed today. Should this prove to be correct, a move towards the upper band should be in progress. This lines up with a test of the 50 day SMA.

SPX - Monthly

Longer term, a close above 1179 by the end of the month can be viewed as constructive. Two days from now a close above 1179 will find the market above the 50 month moving avg after surviving a test of the 200 month and backtest of a long term trendline.
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