Wednesday, June 16, 2010

SPX 1150: Harmonic Attractor.

Using two (unpopular) 'wave counts' 1150 appears to be a harmonic attractor. The reason it is unpopular is that the 5 wave down is assumed to be from April 26th to May 25th. An corrective A-B-C view(bullish) uses the same dates.

Bearish Scenario: The market rallies to the 1150 and turns down to begin another wave to the downside--i.e. primary trend is turned down in April and a 3rd wave is commencing--the nasty summer scenario.

Bullish Scenario The market rallies to 1150 and turns down in a minor correction to the 1105-1109 level and resumes the bullish thrust wave--the to infinity and beyond scenario.

If the market rallies to the next harmonic level--1170-- the likelihood that 'the tape' is tracing out a corrective wave 2 (bearish) in a primary down are diminished substantially and ostensibly negated on a move above 1175.00. Note that under the wave count being used 1173.57 is wave iv of lesser degree.

With either scenario 1150 seems to be the most attractive point. A move to the 1150 level followed by a decline would set up that level (1150) as being the decisive point from that period on. 1150 will be established as the harmonic balance point.

An extrapolation of the momentum indicators and natural S&R fan-lines suggest that the June 25-28th period would be the best fit in the time-price horizon. This date certainly aligns with some significant astro-phenomena falling between June 25th and June 28th.

No comments: