S&p 500 ( 30 Min ) - Double Zig-zag

S&P 500 ( 30 min ) - Double Zig-Zag 1102 [a]

(b) [c]

This is my preferred model. The market appears to have completed a Double Zig-Zag lower. If so, the current bounce would have to be just an (a) wave of what will become an (abc) pattern that works itself higher. Would expect that the 1076 zone presents a big resistance point. However, the 1082-1084 mini-gap remains on the chart and could act like a little magnet.

Gap: 1082-1084

(a)

1076

[b]

[2]

-x[c] of (a)

[1]

[4]

(b)

[3] [a]

(b)

[5]

(c)

-w-

[b]

(a) (c)

-y-

a?

(c)

S&P 500 ( 30 min ) - Impulse still Developing? 1102 (a)

-2(c)

-1-

The model presented here is how this current move could turn “impulsive” from the highs. We might be seeing a triangle develop here that could be a fourth wave. Otherwise, I have difficult time seeing a five-wave “impulse” lower form the 1102 peak.

1076

(b)

(2)

(a)

-4-

[c] of (c)

(e)

(1)

(4)

[b]

(3) [a] (5)

-3-

[b]

[a]

(d)

[c] (b)

-5-

(c)

S&P 500 - Daily (Log Scale) - A Triple Combination? (Y) “c” A triple combination is of the structure: 5-3-5-X-5-3-5-X-Triangle

“a”

(Z)

( Z )?

1020

(X) alt ( W )

“b”

(W)

957

“c”

869

“a”

(X) “b”

There remains a serious possibility that the final (Z) wave forms a triangle that serves to “exhaust” all the remaining buying power. There’s been so much chatter around “techie” boards on this rising wedge, it would see appropriate that the broken trend line gets vigorously tested on the backside. If the market does plunge, I would expect 957 to provide good support on the first go around.

S&P 500 ( 30 min ) - Complex Correction Lower [a]

(a)

(b)

Under this model, the 1054 zone should be some resistance as the 61.8% retrace of the most recent move lower. Also, if this is a complex correction, it should “channel” lower more neatly than an impulse. So, would expect the downtrend channel to contain the move.

[c]

[b]

-x-

[2]

[1]

(b)

[4]

1054 [3] Because of wave-4 issue identified in the previous bearish “impulse” model, we’ll keep tracking the alternative case that this is a “complex correction” that has formed. Just because it’s possible that this is a corrective vs. impulsive move does not take away from the bearish implications. A double or triple zigzag can be just as devastating as an “impulse.” A triple zig-zag can look a lot like a “waterfall.”

[5]

(c)

-w(a)

(c)

-yReprinted from 11/1/09

S&P 500 ( 30 min ) - Bearish “Impulse” Lower (a)

-2(c)

If this was an impulse, the market should not be able to clear 1076, the 61.8% retracement. Any retracement must look “corrective” in nature.

1076 -1-

(b)

2

-4-?

(2)

(1) This is a strong candidate for an “impulsive” move lower. There are some satisfying things about this model: The wave-2 was 62% of wave-1. The wave-3 extended over 162% of wave-1. The potential wave-4 retraced an exact 50% of wave-3. Something that gives me reservations about this model: The wave-4 was a very sharp looking move, not exactly something that looks like a fourth wave. However, we do have “alternation” between Wave 2 and 4--they have different structures and one took much longer to complete. So, it meets the requirements. It’s also possible the Wave -4- is still forming.

Reprinted from 11/1/09

-4-?

(4) (3) (5) -3-5-?

1

S&P 500 - Daily (Log Scale) (Y)

(Z)

“c”

( Z )?

“a”

(X) alt ( W )

“b”

(W)

957

“c”

869

“a”

(X) “b” The market action this week was very damaging for bulls. The long term trend lines from the March lows have been broken. It’s possible that we get more Z-wave action in the form of a triangle. In fact, that would be a classy way to end a “triple”--with a congestion pattern that just “exhausts” itself. A break of 1020 would negate this possibility and confirm that a much deeper correction is unfolding. 957 would probably be the first point of medium term support as the 61.8% retrace of the move from 869 that “coincidentally” aligns with the “breakout” over the June highs.

Reprinted from 11/1/09