Monday, August 8, 2011

SP 500

Since the Aug. 3 post,  Big Doin's in DC and the SP  that index has fallen roughly 100 SP points,  attaining the Head and Shoulders target mentioned there;
" And regarding necks....the break measuring rule targets 1130.50......
Also from that post,
" Most will agree that overlapping the "b" at 1002 will look like death.
That is still a LONG way off, but an early tell that raises the odds of that happening, would be taking out the .618 retrace point, at 1144." 
So far the SP has exceeded that 1144 point by 10 handles AND is now below both the 100 and 200 WEEK SMA.
 Active Mo. Weekly
click to enlarge

Smells like a duck looks like a duck and walks like a duck...it's a 3rd wave of the C down.
"Wave C: Prices move impulsively lower in five waves. Volume picks up, and by the third leg of wave C, almost everyone realizes that a bear market is firmly entrenched. Wave C is typically at least as large as wave A and often extends to 1.618 times wave A or beyond."

So hows about some downside targets;
 The A wave low of 666 was a .61 retrace of the 1530 point move up. The C wave will have some sort of Fibonacci relationship to the A wave.
C=A @ 452.50
Also the next lower Fibonacci retrace of the 1530 point move up comes in about there;
.76 = 425
 C=A in % terms, ie a 58% pullback, @ 590
 C=.618 of A @ 804

More to follow.




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