Tuesday, June 26, 2012

SPX Update: ST Clarification Needed from the Market

Well, the last several days of projections have been dead-on hits at every turn, and now the market has broken the 1310 level I suggested.  There are now five clear waves of decline, and the decline has accomplished the minimum expected/required.  As such, a snap back rally could occur at any time.   

Here it gets a bit muddy:  I've looked at a lot of charts tonight, but I just can't see around the next bend right now.  The preferred count has peformed flawlessly so far -- but now we're going to have to see how the market responds to a few levels and hopefully the picture will clarify a bit during today's session.

The first chart I'd like to share shows the preferred count in blue/red and an alternate in black.  So far, yesterday's small rally appears corrective, and if the 1309 swing low is claimed, I would expect the decline to reach 1298-1302.  However, there are enough squiggles to count the wave as complete and the decline reached my minimum target, so 1309 may have been it for wave i.  Note that an extended fifth wave could easily reach the 1260-1265 zone.

As I stated, we'll have to see how the market responds here: the second chart will show a few key levels and trendlines to watch.

Here's a chart that might help tell the story as it unfolds.  Notice how the rally reached a confluence of two resistance levels (the median line of the blue channel, and the upper line of the red channel).  A breakout above the median line would suggest a run toward the upper line of the channel.

Finally, I hesitate to publish the next count... but after studying the charts, I can't get it out of my head.  I would be remiss not to mention it, but let's consider the count below as "speculative" for the moment.  I'm bothered by the apparent acceleration of the decline on Monday, and it suggests the market may be weaker than expected.   We'll see what happens over the next couple sessions to add confidence to, or rule out, this spec count.

Note the new pending bearish sell trigger.

In conclusion, the decline has accomplished the minimum target I projected for this wave, and though I am favoring the idea that it will make another swing low beneath 1309, a larger snap-back rally could develop at any time.  Trade safe.


  1. Excellent follow up to Sunday's opus... getting that calm before the storm feeling a lot lately...

  2. Hi Pretzel 

    I'm awaiting approval after registering at your forum. A look at my disqus history should reassure you that I'm no spammer & Blind Squirrel will vouch for me. 

  3. AR will certainly vouch for you too Jack.  You'd be a wonderful addition here.

  4. Thanks Pretzel. I've been enjoying your work for a while, even though I haven't commented much. :-)

  5. Hi Pretz

    i'm not sure you are as accurate as you think. I have read your forecasts for the past six months, and while I respect your endeavour, I think you know as much as the man standing next to you

  6. I though you had, even before my own endorsement, but wasn't certain.  Jack's a superb addition Pretzel... I just wanted to make sure he knew he was welcome here.  Thanks :-)