Hopefully this post will clear up a few questions I have received on the original $SPX outlook I posted last week. The market has made it's low and we are beginning to attempt to rally back to new highs. The overall Elliott Count continues to be indicated as an Elliott Wave 5, the question is what can happen form here.
From the Elliott Side, the low that we made on Nov 2could be an Elliott Wave 1 low (I know that Advanced GET has labeled this a 3 but the Oscillator does not support this). If this turns out to be a Wave 1 low that means this current rally must hold and the market can not make new highs. So we now need to identify where the Wave 2 can potentially occur. I used the Ellipse and we show resistance at 1075, if we can hold around this price and the market takes out the Nov 2 low our Wave 1 and 2 pattern would be confirmed and a Wave 3 down would be likely.
If the market continues past the 1075 Ellipse chances are we will again make new highs and Wave 5 will continue. In my last post I outlined reasons for not buying into this rally due to failures of the Fibonacci Levels, if we rally past 1075 and you have the urge to buy into the rally, change down to a 60 minute chart and look for any buying opportunities that present themselves.
Ron Wheeler
eSignal Learning
Ron,in weekly chart of spx PTI dropped to 29, and last bar has exceeded red hash mark- does it mean a bull market coming?Thanks.
Posted by: Chris | November 18, 2009 at 11:26 AM
It may be. The last level we have to take out is 1144 which is the 61.8% retracement. If that level is taken out the bulls have control.
Posted by: Ron Wheeler | November 23, 2009 at 12:58 PM
ON the weekly basis it appears that the Osc has retraced greater than 1.40 also.
Posted by: Terry Felter | November 26, 2009 at 07:55 AM
"From the Elliott Side, the low that we made on Nov 2could be an Elliott Wave 1 low (I know that Advanced GET has labeled this a 3 but the Oscillator does not support this)."
Ron, what characteristic in the Osc are you referring?
Posted by: Terry Felter | November 26, 2009 at 08:00 AM
During a Wave 3 the Oscillator should really be considerably above/below the breakout bands.
Posted by: Ron Wheeler | December 03, 2009 at 08:41 PM