S&P 500 ~ Daily: The “Bearish”Case

(B)
“y”
e

REPRINTED from 9/12/2010 c b

“b”
a c e

“w” a
g

a
e d
c
d
“x” b “a”
b
c f

This model was highlighted last week--it suggests that the “b” wave is concluding
right now. The requirements for this count would be a strong/impulsive move
lower this week. This model implies a market crash to the mid-800s over the
next two months.
d
a
Last week I wrote: “My main problem with this interpretation is the lack of
b ‘Fibonacci’ relationships between the alternating legs. There are no such
relationships present as there should be in such a set up. I’m open to the idea
that I’m “’missing something.’” Indeed, I was missing something. The c-wave
was 123.6% of a-wave and the d-wave was 78.6% of b-wave. So, Fibonacci
relationships do exist in the alternating legs. In other words, a triangle “b” wave is
a good possibility. The e-wave has violated the a-c line, which is allowable and
somewhat necessary as there can only be FOUR touch points on a triangle.
Unfortunately, it will take a violation of the the b-d line to confirm this model.
(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily: “Bearish”Case

(B) This “bearish” model highlighted two weeks ago is actually still “alive,” though it’s running out of time. The e-
“y” wave of a contracting triangle cannot be the largest or most time-consuming leg of a contracting triangle,
e therefore it cannot exceed the top or side of the blue dashed box. In other words, this wave MUST be
completing right now and the market must begin impulsing lower immediately. Breaking above 1158 will kill
this model and open up wave counts that require more price action higher.

“b”
e

a
c

c d
“a”

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily: The “Bullish”Case

REPRINTED from 9/7/2010: This would be the wave count that

would remain if 1158 is bested. The market seems to be following the path (B)
highlighted on 9/7/2010, so no new chart was reproduced. a “y”
c
-5-
-3-
b
An “orthodox” wave counter should be able to “w” -1-
come up with this exact wave count by d
g
labelling the “w” an ‘abc’ move up--it’s actually -4-
easy to force that sort of count.
e
“x”
e
c
-2-
a
b
c f
A “Contracting” triangle here would
explain the “thrust” and why the
“thrust” concluded where it did (the
apex of the triangle.)

d
a
b

We’ve dubbed this the “bullish case,” even though the ‘effective’ price action could be the
exact same as the “bearish case” where the (B) wave has already peaked. The important
distinction here is that the Intermediate (B) wave has not yet concluded. In this model,
though, we should get an “impulsive” c-wave from the b-wave low. Because of the depth
of the Wave -2- correction, we’re anticipating a “terminal” diagonal shape to this c-wave.

(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily: Support and Resistance

Highlighted here are the key support and resistance points for the week ahead. 1174 has been
on our radar screen for a few weeks now--this looks like the second level of resistance if 1158 is
bettered. Support comes in at 1129 and 1111, which are the 23.6% and 38.2% retrace of the
last leg higher. Those points also align well with classic support levels. Bulls who believe that
the Fed will continue to inflate asset prices through quantitative easing might want to use those
levels for stop-loss strategies.

Andy’s Technical Commentary__________________________________________________________________________________________________

 LEFT
DXY (Weekly) SHOULDER
RIGHT
“d” SHOULDER
“b” (developing)
e
(A) 88.71

The strength of this retracement

means this is NOT a Wave-2 as
many EW’ers are calling it.

HEAD c

d
w
a

77.69
“a” 77.28
y
b “e”?

“c” (B)

I’m still counting the whole pattern as a “neutral” triangle where the “c” is the longest wave and the (B) has
not yet concluded. The move down from 88.71 is an “odd” shape that is best counted as a correction with an
x-wave. The bounce in the middle of the pattern was too short-lived to be considered the b-wave of a “zig-
zag” or a “flat.” There is support for the DXY between 77.69 and 77.28. The first level is the terminus of the
“a” wave while 77.28 is the 78.6% retrace of the entire advance, a level that will attract technical buying. We
are expecting bottoming action in the DXY within the next several trading days.

Andy’s Technical Commentary__________________________________________________________________________________________________

 Sugar #11 - Daily (Non-Log)
Sugar, once the “hottest” commodity on the board, has now fallen 50%.
However, there are some signs that this current washout is coming to a
“2” conclusion. The markets seems to be breaking down out of a triangle
-2- formation, which suggest that the next leg down might be the conclusion of
this move. The entire wave resembles an “impulsive” five wave structure. If
the final Wave “5” looks like “1”, then we should get a bottom near 14c/lb in
the next several days.
-4-
“1” -1-

-3-
2
REPRINTED from 4/25/2010
The light blue line would be the
Elliott Wave Channel for the
proposed “impulse” lower. -5-
1 4
a

-b-
3 c
“4”
5 e
“3”
-a-
d
-c-
b

Andy’s Technical Commentary__________________________________________________________________________________________________

 Sugar #11 - Daily (Non-Log)

(B)
b “c”
5
(2)

Our last look at Sugar highlighted the triangular nature of the market as it
a (1) (4) prepared for the last leg lower. We were expecting the initial (A) wave to 3
conclude very shortly. Indeed, that it was what occurred. The overall
move lower from the all time highs is now best counted as “double.” The 4
(3)
-2- subsequent rebound appears to be a (B) wave involving a powerful
running triangle “b”-wave.
1
-1- b d
-4- 2
a
“a”
e
-3- c “b”
-5- “x” c Given the powerful reversal of the
c e last two days, Sugar is probably in
“w” b the early stages of a (C) wave which
d should send Sugar as low as 17c/lb.
a This looks like a “sell rallies”
b
market for awhile.

c Truncated c-wave

“y”
a
(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

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