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Thursday, May 21, 2009

A Powerful Fibonnaci Confluence

This chart I just posted here http://4.bp.blogspot.com/_TwUS3GyHKsQ/ShXcf1gpGlI/AAAAAAAAAo0/Fumvj3bwlNY/s1600-h/spx301.png

Has some potential powerful relationships if the [b] wave traces back up to 896-900 or so which it seems bound to do.

Blue Wave Y would be about 1.5 times the length of wave W. Wave [c] would equal wave [a] in the zig zag down and Wave Y would end at about the apex (midpoint) of the previous up blue B wave triangle which would be a very logical place for support to kick in if 875 breaks.

So that spot is about 847-851 is the next strong support area in my estimation and indeed it is if you look on the chart. Just thought it was interesting and gave further weight to the potential of this move.

Lots of bears bound to be getting much bolder and confident. Bulls got some scare put back into them today. Bears may pile on heavy at 896 and especially at the gap at 900.47-903.47

Will the bulls squeeeze and close that gap down today? Shorting it at or near the gap seems a very logical short trade. Setting your stop maybe at 908-910 above the 62% retracement point.

But this is P2 and upside surprise has the bears guessing still.

Any retrace above 62% (907) and your looking at the X wave situation I charted in my update tonight

http://danericselliottwaves.blogspot.com/2009/05/elliott-wave-update-21-may.html

3 comments:

  1. Hi Daneric,

    Thank you, as always, for all your charts and comments.

    If you don't mind me asking, are you personally planning to short around 900, or are you going to wait to short at the 200 DMA (say, 930)?

    Also, are you planning to go long if we see 875 or wait to see if we fall to 850 or even 830?

    Thanks.

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  2. Hey Dan

    I see you have that resistance line up above. I found this interesting (you disabled pasting links!)

    It's at stockstop.org in the thread called "eureka" if you wanna check it out. Anyways, appears to be a long standing fibonacci fan line at work here, and explains the lower high perfectly.

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  3. philipe says he will have whatever the gringos are drinking or smoking! thats kenney and dan in spanish, you guys went to different schools together for sure.

    ReplyDelete