S&P 500 Daily - The 23.6%/61.

8% Retracements and Possible H&S

Head?

Left
Right
Shoulder?
Shoulder
Forming?

I’ve now seen this Head and Shoulder setup talked about in many different “widely-viewed”
blogs, which makes me very nervous about it’s prospects. That stated, the 23.6%
retracement has been violated, which opens the door for a full-blown 61.8% retracement to
878. Interestingly, that level lines up with previous important inflection points.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 Weekly - 13, 34 and 55 Week Exponential Moving Averages

Bearish
“cross”

The “blunt” tool of moving average analysis gives us a similar picture of a market trend that
has turned lower. The 13 and 34 weekly EMAs have crossed in a bearish way and the 55
Bullish Week EMA is now being violated again to the downside. This whole picture looks bearish.
“cross”

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 June e-Minis ~ (60 min.): One More Rush before Collapse

“y” At this point, there are various possible models that are all legitimate.
Therefore, clarity in the short term is going to be lacking. Presented here is
the most straightforward counting of the price action. A “ b ” wave following a
zig-zag (or flat) should retrace 60-80% of the “ a ” wave. Therefore, price
targets of 1138 and 1159 are not a “reach” under this model. They are
b targets that SHOULD be reached if this count is correct.
-2-

-1-
-2-
“b”
-4-
Reprinted from 6/13/10

-1-
a -b-
-3-
-3-
-5-
a -4-

-1-
TARGETS
1111 for 100% of a=c
-a-
1138 for 138% of a=c
-3-
1159 for 162% of a=c
-2-
-c-
-5-
b
c
“a”

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 Sep e-Minis ~ (180 min.)

“y”

b
-2-

-1- “b”
-2- w y
-4- -c-

-1-
-3- (b)
-a-
-4-
-5-
a
(a)
x
-3-
This doesn’t count well
-5- (c) as an “impulse.”
-b-
c
“a”

Because the most recent decline (x-wave here) does not count out well as an “impulse,” I must go with this type of
model. It suggest that this current “b” wave has a little more time before completed. This seems consistent with the “c”
tendency of the market not to collapse right before the end or beginning of the quarter. Afterall, why would the
market collapse before the new fund flows come in? Mr. Market seeks maximum pain for the most number of
people.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 Sep e-Minis ~ (180 min.)

“y”

b
-2-

-1-
“x”
-2- c
-4-

b
-3-
-1- a

-4-
-5-
a

a
-3-

-5- b
c
“w”
c
“y”
(A)

This would also be a completely legitimate account of the price action. I favor the previous slide, though, because it
calls for more price action. If there’s a way for a wave to last longer, then it’s probably best to assume it will. What’s
interesting about this model is that it would SCREW everyone counting on the Head and Shoulders scenario. This
price action would break the neckline and trigger the proposed H&S top, only to disappoint all the new shorts as we
would likely be completing an Intermediate (A) Wave.

Andy’s Technical Commentary__________________________________________________________________________________________________


Dollar Index (Daily)
This less bullish count cannot be ruled out. In many ways it reaches a similar
conclusion to the other model in the sense that we have a larger pattern conclusion
coming. However this count implies that the move should be over very soon and
does not target anywhere near the 92-94 zone. In the longer term, both of these
models remain bullish.

“b” “d”
89.62 e?
(A) Bears will be hoping for a “double top” to hang their hat on.
WIDE SPREAD
PANIC (C)

Reprinted from 6/6/10

The clear a-c line break required of
an “expanding” triangle.

“e”
x c (B)
d

a
w x
77.69
“a”
b
y

74.33
z of “c”

Andy’s Technical Commentary__________________________________________________________________________________________________


Dollar Index (Weekly)
This is my primary count on the DXY at this point. The “c” wave down was very difficult to count
as an impulse. The individual legs of the of the “d” wave up were very difficult to count as
impulses as well. Therefore, this is the model that remains. It suggests we should see a
corrective move lower, with the high 82 area looking like a decent target. When this completes,
we should see a very powerful move higher.

“b” “d” WIDE SPREAD

89.62 PANIC (C)
(A) e
88.71

c 82.87??
x “e”
d
(B)
a
x
w
77.69
“a”
b
y

74.33
z of “c”

82.87 would be a 38.2% of “c”=“e” target.

Andy’s Technical Commentary__________________________________________________________________________________________________

 The risk to the previous count is that DXY simply does not make for “clean” impulsions due to it’s
Dollar Index (Weekly) composition and hours of trading.* If we were to abandon stricter counting principles, we might
come up with a count like this one. The implications here are that we only finished the first wave of
an Intermediated (C) wave. Because the Wave “1” was a fifth extension, the Wave-4 low should be
considered key support. The implications of this count and the previous page are very similar.

“b” “1” WIDE SPREAD

89.62 PANIC “3” of (C)
(A) 5
88.71

3
x “2”

4 This zone must hold.

1
x
w
77.69
“a”
2
y

74.33
“c”
(B)

* I don’t actually believe this to be true, but it’s an idea that must be considered.

Andy’s Technical Commentary__________________________________________________________________________________________________

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