Monday, August 31, 2009

SP Wedge Update


While the SP could continue to fracture another abc and creep up the wedge resistance line, it is clearly running out of steam. Each successive leg up is smaller than the preceding leg with RSI 's diverging. The C leg is equal to .618 of the A leg at 1044, currently it's at .60, pretty close.

With a wedge formation deep pullbacks and overlaps are expected, so it will take an overlap of 975 to confirm the completion of the C leg up.
Getting back below the .618 retrace, and perhaps psychologically important 1000, will be a pretty good indicator however that it is imminent.

Again on the hourly chart RSI 's are diverging.

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