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Monday, June 15, 2009

SPX Support Layers

Beginning of a significant decline? Futures point bearish. Here are the support layers that exist from 878. There exists support (which may quickly become resistance) at 935. The next support layer spans from the top of the gap at 923 - 927 or so.

After that breakout support at 914 and a little below that the 200DMA.

900-904 offers a zone as well. Ultimately 875 - 878 is the bedrock support for P2 at this stage.

At this point EWI's primary count that this was a 4th wave triangle (a distributive kind of triangle I suppose) and the 956 push was a 5th wave top is looking pretty good at this stage. Indeed if their count is correct, than the gap at 920-923 may be filled today or tomorrow. For if their count is correct then any decline today would be a 3rd wave down and Friday's goofy action was just a pause in the decline. I guess all of Friday's ABC structures were just that - correctives.

Ultimately though, I still am looking at 910 - 914 support as a key to the whole wave structure. Thats a key EW marker for now. If 910-914 maintains, then any decline might be considered an ABC pullback from 956. If 910-914 breaks lower, then you're looking at a potential significant decline and a signifcant impact to the overall wave structure with larger impulsing patterns down.

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