2/23/10 - SPX AM Update

Preferred Count

It's getting close. I wanna see price break below the dashed-blue line and more importantly fill the gap below at 1079. This would confirm that the rally is over based on this a-b-c count.

The second chart is my preferred count at the moment. There is a battle for 1096.

2/22/10 - SPX EOD [10:10 PM PST Update]

[10:10 PM PST Update]

I start out by saying that my primary count has us in a new wave down to start [iii] unless 1112.42 is taken out.

There may be another way to count the rally off the 1044.50 low. I know other EW bloggers have this count as an a-b-c vs my double zz.

I went ahead and labeled this count on the above chart. Based on this count, we are in wave C, which is a 5 wave impulse. EW Channeling techniques are helpful in forecasting the levels for waves iv and v.

Here I have created a channel using the ends of wave i and iii and drew a line parallel to it using the end of wave ii. Based on this technique, wave iv generally will fall somewhere near or on the lower channel (this does not always happen but may serve as a rough guide).

The target for wave iv, if there is a wave iv, should be near 1102. Should wave iv fall on this lower trendline, we may use the current channel to forecast for wave v. Wave v typically will fall somewhere near the mid or upper channel line. In this case the mid channel line intersects with the green dotted line (this is the long term bear trendline). That may not be a bad area to end if this count is correct.

Just something else to think about.



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Well for now it's pretty straight forward. My bearish count has us in a nested 1-2 count. 1112.42 has not been taken out yet so Mr. Market hasn't proven to me that minute [ii] still has some gas left in her.

I'd like to see price break below that lower ascending trendline to confirm the leg up is over.

However, the alternate count sports a very legitimate wave iv flat, which implies a final wave v to new highs. If the alternate is the correct count, refer back to this chart as I posted over the weekend for some potential targets.

I'll post some more later but this is about all I have for now.

2/22/10 - SPX AM Update [8:30 AM Update]

[8:30 AM Update]
One way to count this. Looks like a small scale H&S in the works. It would target 1102.

Of course the alternate is a wave iv triangle/double three type structure in the works.



So far that impulse wave down from Friday's top is holding. It may be counted as a new wave i down or a, with today's pop a wave ii or b.

Projecting out with the Fibs, the likely targets are 1106 and 1103 for wave iii or c. For the bulls, this would mean a wave iv. For the bears, a break of the orange trendline near 1103 would need to be achieved to further their case.

2/22/10 - E-Mini AM Update

Looks like several trendlines converge here along with the center EW channel (red dotted) at approximately 1117.