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 A few weeks ago, we emphasized the idea that there was nothing bearish looking about the S&P 500. While the overall wave count was a mystery (and still is), several other technicals suggested nothing other than being long or neutral. As the market levitates closer to the next zone of major resistance, the risk/reward shits away from being short term bullish to being at least neutral. The market began the serious “panic” phase of it’s decline back on 9/22/08 in the price zone of 1178
1254. The market will have memory of this date and those price levels. With the 61.8% retrace of the entire decline at 1229, it’s a pretty safe prediction to suggest that
the low 1200’s will be EXTRAORDINARY resistance
. So, the question for S&P bulls/longs is this:
Do you risk an inevitable 10-15% correction in order to squeeze the last 4-5% out of this move?
S&P 500 Daily (Non-Log) With 200 day EMA
Andy’s Technical Commentary_________________________________________________________________________________________________
Wide Spread Panic Began HereThough I’m not a big believer in moving averages, the 200 day Exponential Moving Average has  proven to be a very important indicator. Using this line, longer term bulls have no issues until the market decisively breaks this EMA.
 
 
Those who have followed my commentaries the last several months know that I’ve openly struggled to identify the wave structure from the March ’09 lows. One of the Wave Theory “gurus” that I subscribe to when I’m “lost” with a count is Glenn Neely. His last few updates have provided no answers until his most recent conclusion. Here’s what he had to say:
“The recent run to new highs makes it impossible to begin any known Elliott or NEoWave structure from the March 2009 low.”
In an odd way, that line actual made me feel a little better as a wave counter--one of the leaders in the field of Wave Theory confirmed what I had been concluding for awhile now, that the move off the lows was very unusual and difficult to categorize.
Indeed! 
S&P 500 Weekly (Non-Log)
Andy’s Technical Commentary_________________________________________________________________________________________________
< B >
- A -
“a”“b”“c”“d”( W )“e”“e”( X )“a”“b”“c”“d”
- B -
Using my own symbology, this is the type of model that Gleen Neely has developed to describe the price action. He finishes the initial -A- wave down at the Nov ’08 lows and begins the move with a “triangle” which was followed by an expanding triangle (X)-wave. I’m not a believer in this count, but it should be noted that the triangle up from the Nov ’08 low was a model he introduced back in July of 2009 when 956 was taken out. So, in some respects, this is the same count he’s had for several months, though he never could have anticipated an (X)-wave to follow the triangle.
( Y )
 
 ( W )
“y”
c
( X )
“y”
c
Andy’s Technical Commentary_________________________________________________________________________________________________
667
- W -
b
( X )
aa
“x”
b
“w”
cbaab
“Ultra-Complex” Corrections?? 
“w”
c
“x”“x”
b
( Y )
“z”
c
Neely’s model on the previous page is interesting and actually does a decent job of explaining most of the price action, but I don’t like ending the move down at the Nov ’08 lows. It doesn’t fit my larger preferred count and it also just “felt” like Mar ’09 was the “better” low in the sense that there was extreme despair and “resignation” as it appeared the entire banking sector was about to be nationalized. Thus, I’m more convinced that we’re just witnessing “something different,” some sort of new formation that has been brought on by the introduction of a “new” and extremely large player in the capital markets:
The Fed’s Quantitative Easing Program
.
a
“a”?“b”?“c”?“d”?
( Z )
“e”?
I’ve long thought that this entire complex correction would finish in a triangle. Maybe it will look something like this?

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