This post by Daneric40 has been promoted from StockTock Social.
Primary Count: SPX is in the end stages of a zig zag 5-3-5 move up from 741 low. 910 is the target before a significant pullback.
Alternate Count: SPX peaked late Friday at 897.
Second Alternate Count: SPX is headed to a higher target of 914-918 before a pullback and consolidation.
Supporting evidence for all 3 counts:
Primary: The count looks correct. The end target runs straight into a thicket of resistance. Black 3 and Blue 3 expanded a very Fibonnaci 1.650 and 1.613 (almost exactly 1.618). Those are powerful markers.
Alternate Count: The 5 wave move could actually be considered complete with the final peak point resting right on the 200 DMA on a 60 minute chart.
Second Alternate Count: The only thing that bothers me about the primary count is that blue wave 4 did not retrace adequately. Only 16% and it did not take it to the lower blue trendline. If Blue 4 has yet to play out, that suggests that I have Blue 3 numbered too early. That would mean an expansion ratio higher than 1.618. A higher ratio of 2.618 = 918 SPX. So if I have Blue 3 numbered too early, then the likely top of blue 3 will come at a higher mark. Then Blue 4 would retrace adequately, at least 38% or so (but no lower than 865 SPX) of and the advance would continue to a blue 5 peak somewhere higher than what blue 3 peaks at.
However, Blue wave 1 was a very deep retrace, so blue 4 can be expected to be a shallow retrace. Therefore my primary count stands for now.
So there you have it. I favor my first scenario. It looks “wedgish” and that shows a rapid advance as if they are looking to get it all over with.
Since September, every new month has seen a brutal selloff occur. There is no reason to think December will magically rally. For the short term charts, this market is in the overbought range.
In addition there is a confluence of resistance at the 912-916-920 zone. Count on the bears to defend this zone. Any advance thru this will take a lot of money, consolidation and maximum sentiment injections created by the PPT.
If we do get a wave 5 peak Monday (for sake of argument lets say its 910), the 38% pullback correction of the entire move up from bottom is 845 SPX. Thats right on a key support shelf. The 50% mark would be 825, and the 61% correction would be 806. If the rally is to continue I only see a 38% or slightly more occurring. Perhaps a move to the 840 mark again that would be a strong support shelf area. It would have to be a fairly brief dip so as not to trigger a lot of selling from above. A move back above 868 support would be an immediate goal and a further consolidation of the rally would occur in between this area and 910.
But fundamentals are very bad and its a very dangerous market to be long. How any pullback that occurs will yield clues on if its a new march to the bottom again or if it is a consolidation move.
Feeding the bears a bit so to speak.
too early for speculating. the weekend news is unknown.
ive now read one negative headline about black friday and one positive headline about black friday …both containing the same story. 3% gain in sales can be skewed as a positive as we could have seen a 5% decline. the question left unanswered is at what cost are these gains made? were these inventories purchased with a weaker USD$ in more inflationary times? are these retailers selling at tight margins because of this?… anyones guess. how we are not going to end up in a depression is beyond me. dont the debt markets say we are heading for one while the stock markets say we are heading for recession? these two markets need to get in line with each other eventually. can the government re-inflate the bubble like they have so many times before? no lack of trying with all this policy.
We are almost at the peak on S&P for this leg, maybe pushing upto 901 support level, then the selling will start begining monday for a whole week (up and down), going down to support level of 806. No matter what the positive news is about black friday. But please do your own research.
Cheers
Michael
The economic fundamentals would say that in a weak economy, Black Friday would show better returns that in a strong economy because of the sales. Given, that it is no secret that the economy is bad, if the BF data is weak, then we really are living in Whoville this Xmas.
market has moved 20% just in 4days. it went up too high too quick. its going to run out the steam soon. I’m going short. this rally is almost identical to pre-election rally we are going down next week. Usually there is not many action in holiday weeks big institution are not involved and average investors pushed the market up. they ignored all the bad news and kept buying stocks they are going to get crushed.