ORIGINAL POST: 9:40 AM
We posted this chart early Friday morning [see: CIW Sep 28]:
SPX is selling off this morning, but should find support at the purple channel bottom around 1435-1436 and rebound… If the channel does hold, preferably at the .786 or .886 of the pink pattern, look for the Gartley Pattern we discussed yesterday to complete at 1456.21. Why? Yesterday’s high was a perfect Fib .618 retracement of the 1463.20 to 1430.53 drop.
In fact, SPX reversed at 1435.60 minutes later, starting up right at our Point C. That left the Gartley Pattern completion at 1456.2 (Point D) as our next target. Don’t look now, but it’s not all that far away.
SPX just hit our interim target of 1450 — the upper bound of the channel it’s been in (and fell out of) for the past several days. This also represents one of the larger red channel lines and is the Sep 27 top, so we should get a reaction here.
But, we will likely go higher. Why?
In the midst of that range is the .618 of the larger 1474 to 1430 drop at 1457.71. And, the top of the red channel is currently at, drum roll please, 1457.
More in a few…
UPDATE: 10:10 AM
We could see one last spurt and tag 1459 or so, but I’d rather bank the 20 points we’ve earned in the past week and play the reaction.
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