Tues 4/10/2012. 1360ish support?

(Update Wed 4/11/12 3:55PM EST)
SPX has probably done enough for a wave 4 at 1375 but the drop has looked corrective so far, so I slightly favor one more Cof4 leg up to 1380 +/- 5. Also, it looks like Apple has traded down 2 days off its top in a wedge/LDT. It may be done or need one more slight low. That will almost certainly determine the next SPX direction. And, Google earnings interpretation may determine Apple's decision. I favor a break upward but it's a crapshoot and the low is probably not in. Good luck.

(Update Wed 4/11/12 12PM EST)
The 17+pt rally from 1357 makes the 1-2-1-2 down scenario unlikely and I continue to lean towards my 1-2-3-4 count with 4 completing today/tomorrow rather than the downtrend already being over. A cycle low is scheduled for Thursday +/- a few days and then May 3ish. Keep in mind that the 50dSMA and previous bull market top are serving as resistance at 1373-1378 and lots of bulls were trapped by the swift drops from 1398 and 1383 with the previous degree wave 4 covering 1378-1387. So, I suspect the morning SPX rally was Aof4 with Bof4 finishing this afternoon and Cof4 finishing by end of day or tomorrow at 1380+/-5. Then, SPX should finish 5 waves down at 1340ish and then probably bounce into OPEX week near the gap at 1398. If SPX breaks 1393 before 1357, my count is wrong and I think even 1387 would make my count unlikely. Good luck.

P.S. I just noticed that discretionary spending for March (see link to right) actually ended at 116.16 vs 116.09 for August 2011 (my estimate was to fall slightly short), so that DOES confirm November 2011 as a pivot low which likewise confirms a likely 8-10%+ top this week and/or June 1 +/- a week based on spending-SPX lags since 2007. So, 1422 could be the top from last week but keep your eyes on any rally into end of May too.

(Update Tues 4/10/12 3:50PM EST)
SPX has gapped down 5-6 days in a row and SPX is consolidating near 1360 support with the most oversold short-term indicators in a long time. So, I think odds favor either a gap up or reversal up tomorrow. I can see 3 short-term EW counts. (1) A double zigzag ending near the current 1357 low, (2) a 1-2-1-2 count with today being another nested wave 1 or probably a wave 3of3of3 and (3) the count I laid out below counting today as 3of5 down from 1422.

I think #1 is unlikely because 1357ish would be an extremely shallow retracement of 1075/1159-->1422 especially after such a lengthy overbought rally. However, the length of the current 1-day drop (1387-->1357) makes bearish #2 very possible, but we should be able to distinguish in the next day or so. If SPX drops another 5-10pts tomorrow and/or only makes an 8-10pt bounce similar to recent bounces, I'd favor #2. Otherwise, a large gap up tomorrow and/or bigger than 10-12pt rally would favor #3 which calls for a wave 4 likely into the previous degree wave 4 range of 1378-1387 before retesting the low.

Regardless of count, I favor lower SPX action (even if just a retest of 1357) into Thu/Fri, and I think there will be a 3-5 day buying opportunity into OPEX on short-term oversold conditions but the more short-term bearish count would allow for a test of 1340ish or lower in the coming days, so buying too early could be expensive and shorting the rips should be safer into at least the end of April. Good luck.
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SPX has reached my 1355-1365 target area. The 1075-->1159 uptrend line crosses 1360-1365 today. 1360 also lies in the middle of the previous wave 4 range (1340-1378). TRIN closed above 2 yesterday, SPX pierced its lower BB20 and VIX closed above its BB20. TICK is extremely low today. Apple reversed lower intraday but is hanging in there. Those are all good reasons for SPX to bounce from 1360ish, but shorting the rips is the game now.

A possible SPX count:
1422-->1392=w1=30pts
1392-->1402=w2=10pts
1402-->1360ish=w3

If that count is correct, SPX should bounce approximately 10pts in a wave 4 and could even retest 1378-1387 before likely forming a double bottom with posd but a w5=w1 trip to 1340ish support is also possible.

My cycle work projected a low around this Thursday +/- and then May 3ish and May 18ish. Putting it all together, I am expecting a low any day now but probably Thu/Fri followed by an OPEX week 50-70% retracement and then a drop to 1290-1320 by May 3 +/-. After that, we should have a better idea whether 1422 marked the cyclical bull market top or not. Tentatively, I expect a final lower high around June 1 based on discretionary spending data before SPX retests the 1100s in the fall, but a lot can happen to change my mind in the next few weeks. Good luck.