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S&P 500 ~ A Series of Corrective Moves Higher

One of the bizarre and difficult of aspects to this market ever since the March 2009 lows is the tendency for the market to propel higher in corrective patterns that yield NO meaningful retracements until the wave higher has finished. In other words, the moves higher have not been ³impulsive´ in nature and µtrustworthy.¶ They¶ve been powerful corrective waves that offered shorts no way out as each wave failed to even register a small 38% retracement. 54 Trading Days;
Max Retrace = 38%

53 Trading Days; Max Retrace = 38% 71 Trading Days; Max Retrace = 29%

67 Trading Days; Max Retrace = 29%

March µ09

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ A Series of Corrective Moves Higher
But wait, there¶s more of these«.
32 Trading Days; Max Retrace = 50% 56 Trading Days; Max Retrace = 24%

49 Trading Days; Max Retrace = 24%

One of these waves was not like the other«and it was an ominous sign for the Market.

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ Current Rally
The current corrective move yielding no more than a 25% correction has lasted 41 trading days. It this is going to look like all the other such patterns, then it should have a several days longer to run.
41 Trading Days; Max Retrace = 25%

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ 120 min. with Weekly Support
I¶m not going to even try a shorter term count because this has become a ridiculously confusing pattern. The market is into key resistance right now as it approaches the ³double top´ zone from last year (1347-1371). I would be surprised if the S&P 500 takes out that zone prior to a good retracement of some kind. The trend channel up is extremely well defined with plenty of ³touch points.´ This is a ³corrective´ leg higher, so trading bulls need to be very ³quick´ to exit long positions when support breaks. Longs should consider 1,317 and 1,295 for first and second points of support in the week ahead. Though, if that lower trend channel breaks, this market will likely coast lower. That level looks like 1330 for Monday.

COPIED from 2/12/2012

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ Daily with Weekly Support and RSI
In the last few weeks the best I¶ve been able to do for readers of this report is to identify the levels that should provide support--i.e: stop loss levels for bulls/longs or entry points for those waiting to short. This continues to be the best I can offer under these circumstances. The market his heading for a major double top at this point, so it would be a foolish long not to have some tight stops. With that, 1335 and 1300 look like good first and second levels of support. 1371 is the previous high, so it would be an ³obvious´** last resistance point for the S&P 500.

** Please note there has been a tendency for this market to briefly violate ³obvious´ support and resistance points only to reverse back through those levels.

Small RSI Divergence

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ Weekly Longer Term Count Updated
Confidence in the previous longer term counting of the ³y´ and ³x´ waves has wavered due to the price behavior of the market. I am now forced to make a slight adjustment to the previous longstanding count. It¶s becoming obvious that the last ³x´ wave did not conclude at the 1075 low--it had to have concluded later if that¶s even the correct count. The idea of ³contracting´ triangle ³x´ wave fits with the ³thrusting´ nature of this market since the year began. Confidence in this wave count is tepid. We discussed two other alternative theories last week (copied on the last two pages of this report.) Those counts must also be considered.

³y´
b d

(B) ³z´

b

a

³w´
d e

e?

³x´
c a c e

³x´ (C)

BOTTOM LINE: Whether this is the correct count or the models on the next two pages are right, the bottom line is similar--the market is becoming overextended on this leg and is due for some type of decent correction (100-150pts). We will not know which of these models is the correct one until we see the price action down and where it might find support, if any. This market is in an extremely vulnerable place over the next few weeks.

(A)
Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ Weekly Line on Close
This is NOT my wave count or idea. This is a count that it is being promoted by Glenn Neely of NeoWave. I can¶t find too much wrong with it, so it must be considered. He suggests a large contracting triangle from the March 2009 low. Because of the shape of the pattern and the ³smallness´ of the ³b´ wave, it¶s possible to get a marginally higher high before the (B) wave ultimately completes. It would be a triangle with a strong upward sloping bias. I suppose this count, along with a marginally higher high, would inflict the most amount of pain on the greatest number of people. The bulls would obviously be ³besides themselves´ if we were to set a fresh Bhigh in 2012 and the bears would surely ³throw in the towel.´

-

COPIED from 2/12/2012
³c´
b

(B) ³e´

³a´

c a

³d´

³b´

(C)

(A)

Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ Weekly Line on Close
This count is yet another possibility if we take out the highs. This idea was discussed a few months ago and it must be considered. We could be in the middle of large scale diametric. It certainly ³fits´ the mold of a diametric in the sense that all the legs have been ³corrective´ and have taken ³similar´ amounts of time, a key element of a diametric. If this particular shape develops, it will confirm Neely¶s belief that there are ³new´ wave forms that exist as this particular outcome would fit no known orthodox Elliott Wave pattern.

-B(B) ³b´ ³e´ ³c´
2 b d a b 1 a c c

³g´

COPIED from 2/12/2012

³a´

³a´
d b e

³f´ ³d´

a c

e

³b´

4 3

(C)

5

³c´ (A)
Andy¶s Technical Commentary__________________________________________________________________________________________________

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Wave Symbology "I" or "A" I or A <I>or <A> -I- or -A(I) or (A) "1³ or "a" 1 or a -1- or -a(1) or (a) [1] or [a] [.1] or [.a] = Grand Supercycle = Supercycle = Cycle = Primary = Intermediate = Minor = Minute = Minuette = Sub-minuette = Micro = Sub-Micro

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