Market Monitor Update, Thursday, 04/23/2009 10:00:10 AM EDT
by Keene H. Little
HAVING TROUBLE PRINTING?
NDX has confirmed SPX's break of its uptrend line from Tuesday morning by breaking its uptrend line at 1333. All indexes should waste little time dropping below Tuesday's low and then last week's lows. A downside target for SPX is the 780 area which is the beginning of the rising wedge pattern and there's a Fib projection near 783 where the 2nd leg down for the decline from last Friday's high would achieve 162% of the 1st leg down.
SPX 60-min chart:
Assuming we'll get the decline as depicted on the chart we don't know whether that will complete a 3-wave pullback which will lead to another rally leg (green wave count) or if it will be part of a larger decline (red count). If SPX drops down to the 780 area it will be time to test the long side to see what kind of bounce develops. This market will require trading one leg at a time until we see what the larger pattern will become. No buy- or sell-and-hold trades are recommended.