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Wednesday, June 30, 2010

E-minis

If yesterday's very strong downside opening was a middle of the third of Minute [i] of 3, then we look for the last subwaves to play out.  http://4.bp.blogspot.com/_TwUS3GyHKsQ/TCpT8X9m9SI/AAAAAAAAGGs/rYNJ-V0t-tw/s1600/wlsh10.png This means any bounce today should be met by selling at certain points.

By EW rule, the price low of 1067.89 SPX where I have wave i marked cannot be breached. Realistically it shouldn't get that high as there should remain a blue box virgin wave area created by the middle of the thirds.

So the waves have room to bounce while keeping with the interpretation of wave iv or (iv) of [i]. Using a daily SPX chart the first resistance spans from 1050-1055 or so. Futures shows this area roughly by the blue horizontal line.

The bottom of the "flash crash" candle is also a logical stopping point of 1065.  We are extremely oversold on the hourly chart and the RSI is smashed. Higher than that and something else may be going on.
I'm also watching the dollar as a wave C down is anticipated soon.
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