Friday, October 2, 2015

Chart Including Expanded Triangle Option

I added the expanded triangle option to my hourly chart. I am still giving 50/50 odds to the bounce from SPX 1867 being a wave 4 or X. And, within that count, I am giving 50/50 odds that the bounce is expanding into a large 8-week wave 4 or X sideways triangle. As SPX surpasses 1927, 1953, 1970 and 1990, the triangle odds become greater and greater. As for the wave 4 or X option, I'm not sure we'll know until we see whether the October low happens in 3 waves or 5 waves and how quickly/impulsively.

Here is a potential map for the expanded triangle count within wave 4 or X from the top.
1867-->2021=A
2021-->1894=B=82% retracement
1894-->1974?=C (1998=82%, 1974=62%, 1957=50%, 1956 & 1973=OEW pivots, 1953 & 1975= price pivots)
1974-->1924?=D=62% retracement near the 1927 pivot, 1930 price-volume support and 1929 OEW pivot)
1924-->1955?=E=62% retracement near the 1953 price pivot, OEW 1956 pivot and 1950-1970 max option pain)

1955-->1719=5/Y=wave 3/C and the leg prior to the flag/triangle and near the Fib 38% bull market retracement and near the bull market uptrend line and pitchfork and near the Dow year 2007 top

In this triangle scenario, the wave 5/Y drop should last 1-2 weeks into late October to match wave 3 and the heart of wave 1/A, and it should start on Friday October 16th OPEX +/- 3 days. If my overall long-term parabolic bearish scenario into Q1/Q2 2016 is correct, the Oct/Nov/Dec rally and consolidation could retest the 1900s from the 1700s offering a 10%+ move in a matter of weeks resetting sentiment only to be followed by a much much larger move lower over a few months. Good fortune.

Update Oct 2nd, 2015 2PM EST:
2%+ rally in about 3 hours. To borrow my friend Tony's OEW pivots, it would make sense for SPX to bounce between 1929, 1956 and 1973 +/- 7. Perhaps 1894-->1956-->1929-->1973 although SPX has already met some resistance at the upper end of the 1929 pivot. Today is a weekly option expiration with  max pain around 1930 so perhaps we hang out there for the rest of the day or perhaps we approach 1950 and fall back. Either way, I expect further upside for a couple days and SPX 1894 is the new rising line in the sand for bulls to hold.




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