Thursday, October 10, 2013

Charts 10-10

I did want to put up a quick sketch tonight of how I think we might finish up the rest of the month.

The pop into the close looked like (v) of 1 to me, because it was too long to be a subwave of 3.  I guess we will see tomorrow; maybe it will morph into something else.

Better still would be some squabble in the morning over socialism or growth or whatever other distraction, that would give us a 50% retrace for a W2, to the 1669 area.  Not only is this the 50% retrace, and the logical target for support for an inverse head & shoulders, but it is also where the old lower trendline for the original ending-diagonal, the one drawn up from 1560, passes through.  So it should offer excellent support.

A halfway-back move tomorrow could be an excellent spec play with front-month options, if a real budget deal is hammered out over the weekend.  Yeah, I think we can pop all the way up into the 1740s out of that one.

If the W3 actually completes into October opex, then waves 4 and 5 will need to find a way burn off time and excitement by moving sideways, maybe even with another E-D for the 5th wave.  October 31 still makes an excellent top, coming after a Fed meeting, when the new POMO schedule and amounts are announced.

SPX 10-10


Permabear Doomster said...

Hmm, an index short in the 1740/50s would certainly be more appealing than where currently are.

Christian Gustafson said...

Agreed. This is pretty wild. If a Halloween top is in store, we now have a lot of time to kill.