Friday, August 20, 2010

A Possible Market Trajectory.

This should clarify any ambiguity with regard to my opinion of the S&P 500.

If and when the 1069.49 recent low is taken out--especially on a closing basis--the possiblitly of a crisis developing in the markets increases significantly.
The chart below shows some of the possible Fibonacci Harmonics that are clustered in the event that a 'THIRD WAVE' decline commences.
Three Fibonacci projections are shown that are used to trace out a possible trajectory of a decline. Since the decline will be part of a impulse wave within a bear market, the decline should have a series of five wave structures.
The timing and price targets should not be taken too seriously since the market decline may manifest in a number of different ways, but it is a seasonal tendency for the markets to experience 'anxiety' in the months of September and October. The Energy Dates for September and October will clarify the time price harmonics with greater accuracy as we enter the autumn.
Some VERY preliminary Energy Dates projecting into the autumn are:
September 7-9
September 17-21
October 1-4
October 7-8
October 26-29
Note: These dates will shift slightly as the calendar progresses.

Some Observations:
  • There is a cluster @ 1039-1040 which may be first support--that will give way rather quickly
  • The 920-950 (especially 940-950) area looks like it could offer some relatively strong support and may be the level at which some form of bounce occurs. 943 also represents 2.618 of the 1129.24-1069.49 decline since August 9th.
  • 839-840 represent the decline being 1.618 of wave (1) (using 1040.78 as the low) or 1.382 of (1) (using 1010.91 as the low). 847 is 4.236 of the recent 1129.24-1069.49-1100.14 decline and corrective bounce from August 9th.
  • Note how 660.57 represent the 2.618 multiplier of wave (1) (using 1040.78) and 2.236 of wave (1)( using 1010.91). This is close to the March 6, 2009 low of Wave 1 of greater degree. (October 2007-March 2009)
  • Below 660? Yikes!!!!!!!!!!!!!!

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