Sunday, May 17, 2009
This 1 minute SPX chart is produced from the bearish primary count in that the market is making a series of 1's and 2's and that the move to 878 was a 5 wave impulse and not part of a b wave flat in the wave (ii) position.
Lots of stuff packed on this chart. What is hard to show is the fact that the big RED hourly candlestick on Friday is what drove the market under a last ditch trendline that had been in place since the sub 800's. I threw that approximate trendline on the chart
On the surface, it appears the late Friday rebound will push higher in some kind of backtest move either on one of the trendlines I have on the chart or resistance or both. How it handles itself from here will be telling. Watch your volume on Monday, both up and down and particularly the advance/decline ratio.
For instance a market that opens the day with, say a 12 - 14 advance/decline ratio spike on the opening minutes is definitely saying its gonna be a bullish day. Of course overnight futures will also be telling. In fact, overnight futures may actually do all the "backtesting" of the trendlines and fail overnight.
Posted by Daneric at 12:14 PM