Tuesday, October 16, 2012

Charts 10-16: Let's try this

The impulse up from 1425 is stronger than expected -- I had hoped for a little pullback today instead of the continued rally.  I sold some SPY calls Monday that were green, but could have been quite a bit more green.

If the bounce at 1425 terminated a wave 4 in the blue channel (see chart), then we're looking for a 5th wave, so why not propose here a terminal pattern, either an ending-diagonal or an expanding wedge?

I'll sketch the ending-diagonal for now, looking for a pullback to support at 1440 tomorrow.  I'll buy that dip.

SPX 10-16


christiangustafson said...

Or ... we continue to drift like this, at 5 to 8 SPX points per day, on low volume, falling VIX, zero worry, until we reach our target next week.

Afterwards, we can look for a sideways portion of this last rally and call it "wave four".

Patience required, you know the drill.

hettygreen said...

I don't see how anything of any consequence (up or down) occurs until after the election. Twenty to twenty-five S&P points higher? Meh. Of course I am a strong believer in the powers of manipulation (for now).