Thursday, June 25, 2009

Primary Wave B - Until Further Notice

Today opened with so much downside potential it was painful to see a lack of follow through. However, it did set the pattern straight, unless of course the market makes a new high. If this happens then the bearish pattern will have to start over.

If price immediately turned back from here, then there would be a technical opening for a primary wave 3 count as this move up would be a wave 2 to the .786 retracement. However, there are a number of other reasons why I don't like count:

- wave 2 would be longer than wave 1 in terms of time
- sharp retracements on a wave 2 are generally swift making the correction in terms of price but not time.
- this correction fits better into the price & time period of a minor wave B correction.
- at this point, price does not appear ready to turn back as we closed above a key resistance zone

With that said I will no longer entertain a primary wave 3 discussion until price breaks below 800.

Now, as to price targets for this wave B to end. We've certainly met my minimum requirements (>915), but because buyers stepped in to keep it up all day long, it would be hard pressed to say that the move is over. So here is what I have:

- key resistance zone over head in the 927-930 area.
- .618 retracement off our minor wave A @ 930-931.
- minute c=a*1.382 @ 926
- minute c=a*1.618 @ 931
- .786 retracement off our minor wave A @ 942 (this is the line in the sand)

If these targets are not met before price breaks the hourly 34 SMA, then minor wave B is likely over. A break of 896 will be our confirmation.


  1. Hi Rich.

    Close today 920.26(+19.32)
    Spx close below 935 so nothing new.
    Below 935 I expect [790,820] medium term.

    Today break 911 hourly/daily and is now testing important resistance.
    I suspected yesterday that the market should go up, because if you see my post/chart spx had divergence bullish stochastic daily.
    So now bulls will try to break this important range [935-921].

    I suspected that spx will turn around soon.
    Don`t forget today vix fall 15% and made new lows of the year again = This is very bery bearish I see spx only at 920 made 956.
    Important tomorrow watch macd hourly. New sell signal macd hourly with confirm lower high and we will testing again range [880-893] or we will break last down swing and see my medium term target [790-820.

    Suport 910 resistance between [935-921]

    Trades big picture
    Open Last week short at 941 close 902 (80% of my position) and I will initiating short positions again.
    See the table of trades at the end of the blog.
    Any position of trading I will post here realtime.
    Click to zoom in.

  2. Good work. I have us also in a 5th, andcapped by the downchannel line. Please check this out as it might show us about to make the final plunge.

    Near-term might look a bit like last summer:

  3. Schweizer, very good work on your charts. The idea that w3 would have to be smaller than w1 due to the fact that the s&p would go below zero is an interesting argument for a current w4 and a coming w5. I have to admit I never really looked at it that way.

    I absolutely agree with you that we never had capitulation selling in March. In fact the fall below the lows felt very orderly with buying occuring all the time.

    Now, regardless of the larger wave count, we will need an impulsive move off of the countertrend high. And as of right now, that impulsive structure is on very shaky ground. As you can see, I've already moved it to an a-b-c move, but if it is winding up for a massive move down, it will need to happen very very soon.