Thursday, August 26, 2010

SPX index with big trouble down the road



I have been writing posts on forecasting SPX index direction since July. For those who visit my blog frequently, I think it is a good time to summarize how we've been doing so far.

On July 18 when SPX index was around 1065, I forecasted that it will move to 1120 level based on the wave counts. The original post can be found here.

Then on Aug 5th, after SPX index hit my target of 1120 level, I called the top reversal based on complicated Elliot wave formation and intermarket relationships between US equity and USD/CAD. The original post can be found here.

Again on Aug 19th, I opined on another post that SPX index will fail to move above the 50 day MA, based on candlesticks formation and some other indicators. The original post can be found here. In that post I also pointed out the most critical support level SPX index need to penetrate in order for the coming  big drop to take hold.

Today, we have it. SPX broke down the cement support level (1060-1075) and backed up to test it but failed! Now we are below the support line and quietly approaching the internal trend line highlighted in yellow. Once this line breaks, SPX index is likely to unfold a massive continued downside movement.

2 comments:

Unknown said...

Thanks a lot for your real-time analysis!

liz said...

today is too volatile...need your insight. i didn't expect the mkt to dip to 1040 so fast and dirty, and then bounced all the way back within the same flash of eyes' time, breaking each small resistances above 1060 level to end the day. 1040 was the previous "buy" level after the April crisis, does that mean we are about to head back to the short term bull's mkt, perhaps with some zigzags? i normally see a sell off at the end of the day as investors didn't want to hold their positions overnight, but today is the first day that this didn't happen, and futures price is still gaining tho...

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