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Monday, May 4, 2009

Daily SPX Chart and Possible Targets

This chart makes it look easy. And somewhat obvious I suppose. Or maybe not. Regardless if this is indeed a C wave to a near term peak, then I have some upper targets.

If wave [1] started at 847.1 and peaked at 888.7, and wave [ii] retraced to 866.1, then the Fibonacci expansion targets are as follows: 1:1 ratio = 907.68. We hit that today. This gives the appearance that the move up from 826 was a double zig zag which indeed it is so far....See how the market likes to keep us guessing?

But if this is a wave [iii] of C then the targets will be higher than a 1:1 ratio of course.

A 1.382 Fib target is 923.56 and 1.618 expansion ratio is 933.38. That would take it to the trendline I drew. Then a wave [iv] pullback and then wave [v] would sprint toward the 20oDMA which should be somewhere in the lower 950's by then. Then wave [v] should top out at the 200DMA or thereabouts.

So that's the Minor wave C scenario as it stands in my head at this very moment in time. Remember the tape can change things in less than a day. I favor a 200DMA strike and then a fallback in an (X) wave correction, likely to be at least 38% of the entire rally. But we'll see. Cannot get too far ahead of things.


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