Option Investor
Printer friendly version
Zooming in a little on the SPX 60-min chart I showed earlier, the 30-min chart shows the retest of the broken uptrend line from March 30th. The bounce off yesterday's low had two equal legs up at 859.22 and this morning's rally (the c-wave of the a-b-c bounce off yesterday's low) was the requisite 5-wave move where the 5th wave achieved equality with the 1st wave at 859.52 so there was good Fib correlation there for resistance, in addition to the broken uptrend line. With the completion of the 5-wave move up from this morning it should be the completion of the 3-wave correction to Monday's decline. That makes it a good setup for shorting the bounce and if you are trying it I would now use today's high as your stop. A choppy pullback (lasting a few hours) followed by another new high would give us a more bullish upside pattern. In the meantime I expect the next leg down to start.

SPX 30-min chart:
[Image 1]

Market Monitor Archives