Saturday, April 21, 2012

4/21/12 - EOD and EOW Update

With the completion of OPEX I hope to see some clarity by next week since there are still several options on the table.

As I have posted over the past several days, I still give an edge to the bears or at least the case for one more leg down. Where this next leg down targets depends on the longer term count options.

I would guess at least a minimum test between 1357-1340 and of course more if the bearish head and shoulders is in play along with the 2 year bear option count.

The bear case:

1. Since the April 2 top, I can actually provide a legitimate five wave count down. As many of you know I always try to look at the squiggles and tend to dispute a five wave move down.
2. A bear flag is still in play
3. Price action has been range bound the past 10 days and was rejected at the upper end again.
4. SPX continues to close below the 20 day SMA after 4 back test attempts.
5. A bearish head and shoulders pattern
6. Weekly MACD is pointing down
7. RUT may be presenting a case for one more little push down (unless 822.72 is cleared)
8. A close below the 50 day SMA for a second day

The bull case:

1. Price is still contained within the rising channel
2. Since the 4/10 low, there are still higher highs and higher lows (to challenge the bear flag).
3. The daily MACD is trying to cross up
4. Still above the 13 week EMA

So I'd say at the moment, the bears may have this until the bulls can recapture the 20 day SMA and break out of the bear flag to the upside. But even then, as you will see in my bull option chart below, the bulls may still be consolidating in a larger range for Minor 4, should a flat be playing out.


SPX - 15 Min

SPX - BEAR OPTION

SPX - DAILY BBs

SPX - H/S


SPX - WEEKLY MACD

SPX - BULL OPTION

SPX - OPTION 3

RUT
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