Tuesday, December 7, 2010

5th wave complete??


So far we got the reaction we would expect at the completion of a 5th wave. While it popped higher out of the gate, it died right in my target zone of spx 1234 (the high was 1235.22), which was based on a 5:1*.786 relationship. Of course to get really excited we'll need an impulsive move down that takes out some key pivots.

Ideally, we start tomorrow with a gap down that runs. Regardless, as long as prices don't move above 1233 tomorrow, bears should be able to take this to the next key buy zone.

Here are the key zones to watch:
- 1220/1224 (the breakout of consolidation pivot)
- 1198/1202 (the middle of the last consolidation)
- 1172/1176 (the bottom of the consolidation range)

If the middle pivot falls, then the bulls likely face a very steep retracement (assuming primary wave 3 hasn't begun).
blog comments powered by Disqus