Thursday, July 09, 2009

It is all starting to make a lot of sense now - on D-WAVE

Multiple timeframes have resolved counts and I am kind of pleased to see that my "presumptions" (due to incomplete minimum requirements for some waves counts) were not that far off.

Here what we have on S&P500 cash index weekly.

^SP500  Week 31_2007 - Week 28_2009 (Weekly)

There are 2 alternate waves, but based on RSU staying firmly under 60 (and most of the time under 40 as well), it is a major wave down (RED ). My prior thought were that 38% would be sufficient for W4 retrace – I did not have daily wave charted due to lack of minimum required conditions. Now daily is all set and it plays well with weekly. To finish with weekly – I’d say that now it is reasonable to expect W4 to run its normal course and extend to 1120-1250 area.

^SP500  11_26_2007 - 7_9_2009 (Daily)

As you can see on daily there 2 alternate waves as well and here RSI serves our purpose well – plus major down (RED) is in corrective final stages and presents no interest to me.

GREEN… Major UP is in W2 down which is reasonable to expect to extend down to 740-780 area – and it is “slight” disappointment to me – without seeing formed daily W2 I expected more of a surprise with less downside, I thought 847 (which by the way is still a 38% retrace) – would suffice..well – it still might and I am not discounting that possibility as of yet.

^SP500  7_9_2009 (60 Min)

Hourly…that would be tough call if major UP (green) would not have been in final corrective stages, so we’ll take RED one instead.

it plays well with my prior 875 pullback(which already happened) and then up, thou W4 has not been defined yet (no minimum count exists yet) – so if tomorrow SPX will fail to set lower than today’s low and proceeds to 900+ area – we will know that 907-914 is around the corner.

As you recall 914.75 is my magic number and I will be VERY unhappy to see SPX above it on daily close.

So, to summarize:

Up to 907-914, down to 740-780, up 1120-1250 and then “Armageddon upon us” – but timing wise it is highly unlikely to happen this year. (As you recall monthly wave count calls for “this is just a beginning of the end” scenario.  Just to make it clear – I am no bear I am no bull I don’t really give a UFO about “where” market is going, I just want to be, in this computerized world of “What GS allowed to do none else allowed to do”, on the RIGHT SIDE OF THE TRADE)