ORIGINAL POST: 9:50 AM
SPX is off another 10 points so far, for a total of almost 30 since we went full short at 1530.50 on Feb 19. Look for a bounce at 1499/1500 – a psychologically important line in the sand, and also the .886 of the rise from 1495 to 1530.
It also satisfies pebblewriter’s corollary, which is that the market seeks levels at which the greatest ambiguity can be maintained. At 1499, the market could be setting up a bearish Crab Pattern down to the 1.618 at 1472.82 (shown below in purple) which would find support around the Sep 2012 high of 1474.
OTOH, SPX could be setting up a bullish Crab Pattern (in yellow) to the 1.618 up at 1555, which also happens to be the 1.618 extension of 2012’s 1474 to 1343 decline (1555) and the 1.618 of 2011’s 1370 to 1074 decline.
So, which can we expect?
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