Tuesday, May 8, 2012

5/8/12 - EOD Update

The bulls were able to form a daily hammer candle. There is shorter term +ve MACD divergence. Can the bulls pull off a daily divergence? The bears confirmed a bear cross.

I think near term a bounce is on the way for either bull/bear scenario towards the 1373-1381 zone.

SPX - Minor 4 Flat option
 This is the best case scenario for the bulls now. Wave C completed today and is just a hair longer than wave A. Note the 1.618 extension below though. Just something to keep in mind.

SPX - Bear Option
 I believe there is a good chance five waves off the 5/1 high has now completed. So the bears are setting up a bull trap with wave 2 bounce.

We should keep an eye on an extension potential though should there be one more push lower starting tomorrow as illustrated in the chart below.

Nine waves down makes for an extended impulse. If not, a good chance five waves down is now complete.

SPX - 1 Min

Here is a look at the 1 min squiggle off the day's low. I have an issue with the wave 1/a impulse count. Wave iii in this count is shorter than waves i and v. We'll see.
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