Wednesday, December 7, 2011

12/7/11 - EOD Update

Late post for me so I'll keep it short. I made some adjustments to the option1 and 2 counts I have been tracking and removed the triangle option, which became the primary rectangle option below.

Rectangle Option
With today's early AM sell off, the rectangle option appears to be the count to watch for tomorrow. Based on this count a wave iii of 3 up is to be expected.

If the market cannot blast through and make a new high, which BTW would push through the 200 day SMA, we must respect the new option 2 count below.
Option 2
Should the market fail to push through the 200 day SMA, the next best alternate is a wave y drop to the 1230-1225 levels. A move to 1225 lines up with a 38% retracement of 11/25-12/5 rally.

Here's one pattern that may favor option 2. Notice that in April, the market traded in a range for at least 5 days before finally pulling back. Perhaps the market we're seeing the same thing again.

SPX - Weekly
I am still keeping an eye on this chart as well. A move over 1271 will take the market over the red TL.
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