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Monday, March 16, 2009

Quick Look at Support Resistance

I never claimed to be an expert at figuring out support/resistance but its not too terribly difficult to spot what will be solid and what will be weak. The above is a chart of a wave 5(5) support/resistance layers. The first point I'd like to make is that this trading zone below 742 is fairly fresh obviously. Second, its has went almosty straight down and then straight up. So there are only a few solid pockets of support from 750 down to 666.

A long squeeze is just as painful as a short one. Of course if the SPX only touches its toes in this sub 742 zone and can manage to consolidate and pull out then your looking at Primary Wave 2.

12 comments:

  1. where the GOOG and GS pigs?

    on the next push up (if it gets it..) i think goog's time over 300 is very very limited. Love to see 330 one last time to enter.

    ya still got that pig (goog) chart?

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  2. thanks daneric... if you haven't seen this guys work erik showed me his site...

    http://cobrasmarketview.blogspot.com/2009/03/03132009-market-recap-pullback-or-down.html

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  3. Of course if the SPX only touches its toes in this sub 742 zone and can manage to consolidate and pull out then your looking at Primary Wave 2.
    -----------

    Just wanted to point out that if it dips it toes into 740 range (or even under) and then pulls out it would set up the right shoulder on a very nice looking H&S pattern

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  4. Yes that is true CK, I'll be looking for that. I meant if it heads to say 725 for a tad and recovers....

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  5. Glad your back in the primary 1 camp, even if you never fully jumped off. There is just too much that says we are not in P2 yet, especially when it could be just as simple as a mislabel as you point out.

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  6. Just speculation but if I really wanted to turn bullish and go "all in" what I would love to see is for this to go to a new low just under 666. Bad luck aside, going under that would set up a wicked looking "W" double bottom. Just pull up a basic daily spx chart and you could see that happening, 877 to 666, up to 774 for the middle, back down to a new low and then boom, primary 2 and a massive double bottom party.

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  7. if you think that 4 is over then i gotta place my donation...stuck it in their axx with srs today...wish i had more...at wurk or would pay up my donation now......later gator..kli

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  8. The odds of a 5(5) truncation did increase today with the S&P 500 rising just above its 50% Retrace. Does that mean it will happen I would say it's about 50/50 at this point.

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  9. don't we need to close the gap for the rally from 666 to 774? if we are in primary one, how about the capitulation?

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  10. Was that chart and early Xmas present? Great presentation. Were you able to buy additional annotations from Stockcharts. If not you used the whole lot. I like your charts. While this chart looked funny at first, once you get past the colors it tells a great story. I'm with you on possible consolidation up here.

    Thanks.

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  11. Crazy day.....is this an extended wave 4 or are we really in Primary 2?

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  12. 61.8% Retrace is at 797...Considering how overbought this market is it's hard to believe it can rally above that level without going through a significant pullback shortly thereafter.

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