S&P 500 ( 30 min ) - Double Zig-Zag

1102
This is my preferred model. The market appears to have completed a
[a] Double Zig-Zag lower. If so, the current bounce would have to be just an (a)
(b) wave of what will become an (abc) pattern that works itself higher. Would
[c] expect that the 1076 zone presents a big resistance point. However, the
1082-1084 mini-gap remains on the chart and could act like a little magnet.

Gap: 1082-1084

(c)
1076
[b]
(a) [2]
-x-
[c] of (a)
[1]
[4]
(b)
[3]
[a]

[5] (b)
(c)
[b]
-w- (a)

(c)
-y-
a?
 S&P 500 ( 30 min ) - Impulse still Developing?
1102

The model presented here is how this current move could turn “impulsive”
(a)
-2- from the highs. We might be seeing a triangle develop here that could be a
(c) fourth wave. Otherwise, I have difficult time seeing a five-wave “impulse”
lower form the 1102 peak.

(c)
1076
(b)
-1- (2)
(a)
-4-
[c] of (c)
(e)
(1)
(4)
[b]

(3)
[a]

(5)
-3- (d)
[b]
[a]
[c]
(b)

-5-
 S&P 500 - Daily (Log Scale) - A Triple Combination?
(Y) (Z)
( Z )?
“c”

A triple combination is of the structure:

5-3-5-X-5-3-5-X-Triangle “a”
1020
(X)
alt ( W ) “b”
(W) 957
“c”

869
“a”
(X)
“b”

There remains a serious possibility that the final (Z) wave forms a triangle that
serves to “exhaust” all the remaining buying power. There’s been so much
chatter around “techie” boards on this rising wedge, it would see appropriate
that the broken trend line gets vigorously tested on the backside. If the
market does plunge, I would expect 957 to provide good support on the first
go around.
 S&P 500 ( 30 min ) - Complex Correction Lower

[a] (b)
[c] Under this model, the 1054 zone should be some
resistance as the 61.8% retrace of the most recent
move lower. Also, if this is a complex correction, it
should “channel” lower more neatly than an impulse.
So, would expect the downtrend channel to contain
the move.

[b]
(a) [2] -x-

[1] [4]
(b)
1054
[3]

Because of wave-4 issue identified in the previous bearish

“impulse” model, we’ll keep tracking the alternative case that [5]
this is a “complex correction” that has formed. Just because it’s (c)
possible that this is a corrective vs. impulsive move does not
take away from the bearish implications. A double or triple zig- -w-
zag can be just as devastating as an “impulse.” A triple zig-zag
can look a lot like a “waterfall.”
(a)

(c)
-y-
Reprinted from 11/1/09
 S&P 500 ( 30 min ) - Bearish “Impulse” Lower

(a) -2-
(c)
If this was an impulse, the market should not be
able to clear 1076, the 61.8% retracement. Any
retracement must look “corrective” in nature.

1076
-1- (b) -4-? 2
(2)

(1) -4-?
This is a strong candidate for an “impulsive” move lower. (4)
There are some satisfying things about this model: The
wave-2 was 62% of wave-1. The wave-3 extended over
162% of wave-1. The potential wave-4 retraced an exact (3)
50% of wave-3.
(5)
Something that gives me reservations about this model: -3-
The wave-4 was a very sharp looking move, not exactly
something that looks like a fourth wave. However, we do
have “alternation” between Wave 2 and 4--they have -5-?
different structures and one took much longer to complete. 1
So, it meets the requirements. It’s also possible the Wave
-4- is still forming.

Reprinted from 11/1/09

 S&P 500 - Daily (Log Scale)

(Y) (Z)
( Z )?
“c”

“a”

(X)
alt ( W ) “b”
(W) 957
“c”

869
“a”
(X)
“b”

The market action this week was very damaging for bulls. The long
term trend lines from the March lows have been broken. It’s possible
that we get more Z-wave action in the form of a triangle. In fact, that
would be a classy way to end a “triple”--with a congestion pattern that
just “exhausts” itself. A break of 1020 would negate this possibility and
confirm that a much deeper correction is unfolding. 957 would probably
be the first point of medium term support as the 61.8% retrace of the
move from 869 that “coincidentally” aligns with the “breakout” over the
June highs.

Reprinted from 11/1/09