Fridays before a holiday weekend have a tradition of being very, very quiet. Today seems to be no exception. Unless something weird happens, we’re aiming for a close around 1323, up a few points.
Tag: Inverse H&S
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Somewhere Out There, Fibonacci’s Having a Good Laugh
Some of you might remember this post from May 4. I was struck by the Fibonacci relationships in both time and price between the last two major H&S patterns, and thought it confirmed my view that the H&S top was ready to play out.
We all know what’s happened since then, of course.
The reason I bring it up again is that horizontal purple trend line cutting across the chart from the October high (which helped drive prices higher for months.) I don’t think it’s a coincidence that it’s at the same price as our H&S target — any more than it’s a coincidence that the latest pattern is:- 1.618 the time of the previous pattern; and,
- .618 of the target price range of the previous pattern.
These Fibonacci relationships don’t tell us exactly what’s going to happen. But, they’re practically screaming “pay attention! This could be important!”
The obvious implication is that SPX will find its way down to 1289, the lowest of our targets initially presented over a month ago [see: Analog Details] — though I continue to believe TPTB won’t allow a dip below 1292 (too many bearish implications.)
I’ll post more after the close.
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Update on NYA: May 8, 2012
UPDATE: May 8, 2012
NYA has completed its Head & Shoulders pattern, targeting 7340 on the downside. The Mar 30 forecast has played out nicely, although it took a little longer than expected.
My gut is that NYA will remain stalled between 8300-8450 and not complete the larger Bat pattern at 9679. I suspect it will chew up the next two weeks or so, ranging from 8100-8450 before breaking down on the smaller rising wedge.
NYA has also overlapped its October 2011 high, which has serious implications for the Elliott Wave picture, as waves 1 and 4 are not supposed to overlap.
I’ll defer to folks who know much more than I about EW, but I believe this overlap strongly suggests the past seven months rise is a corrective, rather than impulsive, wave.
The harmonic picture continues to be a bit obtuse, as has been the case with NYA. The recent top completed (and overshot) a Gartley pattern. But, 7340 is pretty much no-man’s land from a harmonic standpoint. It’s about .500 of the Aug 2011 to Mar 2012 rise, and .707 of the Nov 2011 to Mar 2012 rise.It also intersects with the larger rising wedge/channel bound around the first week of August 2012, so we’ll put a pin in that time/date for now.
Longer term, NYA appears to be tracing out a diamond pattern. Whether it breaks up (continuation) or down (a top) remains to be seen. But, the next move would seem to be to the lower bound of the pattern.
