SPX 8-24

SPX 8/21/2009
Here was my attempt last Friday to count the waves.(Post)


SPX 8/24/2009


Do we have more clarity after today? I say not really, maybe a little bit.

Not only do we have signals indicating we may have topped, EWI has us going higher (their preferred count). Dan is leaning possibly towards a top, yet acknowledges that there is room for further upside. To add further to the confusion is what degree we should label these waves.

I previously mentioned that I am new to EW analysis but find it very intriguing. It is very rewarding when price moves as anticipated after correctly labeling a wave count. I have highlighted a few of these now since I have begun posting my charts.

Today's chart is yet another example. Granted this is at a very small degree and I admit the degree labeling may be wrong. However, because EW is all about fractals and the fact that the basic 5 wave impulse 3 wave corrective works at all degrees, one may still determine a path for the market once the proper count is determined.

In this case, I believe my wave 3s were correctly identified (because these are the easiest waves to identify) and today I expected the wave [iii] in blue to complete before blue [iv] began. So far so good.

Let's see if tomorrow completes wave [iv] at the 1018 gap and continues to follow the blue arrows I have placed on the chart. I will admit, my waves [iii], [iv] and [v] blue may be at a lower degree. Bottom line, there should be a move higher if this count is correct.

However, keep in mind there are indications out there of a possible P2 top. The waves down from today's 1035.81 top counted as a five. (Hush, but I think I see a small scale head and shoulders pattern again) So be prepared as well in the event we continue lower.

Of course there is another possible count out there that takes us lower but is not part of the P2 top. This alternate count is a Minor B expanded flat.

Based on this count, today's high would have completed Minute B of the Minor B expanded flat. This may work as well. So this is something to keep in mind.

If price behaves tomorrow in a way that indicates a Minor B expanded flat is in play, I will update my chart with some projections. Let's just say it will have something to do with my prior Fibonacci Confluence post.