Friday, May 6, 2011

S&P 500 ~ Intraday Update 1 ~ 6 May 2011

The ES hasn't breached 1355 yet (SPX 1357) so the bears are still in control.

We've got quite a big sell off in the past two hours which can either be seen as a backtest of the broken downtrendline or the beginning of wave (c) down.

As said earlier today's rally could only be a (b) wave i. e. a (c) wave to 1330 or even a bit lower would follow next week. Another possibility is that today's rally is a first wave of wave [iii] up and the most recent sell off a second wave.

If we rally above today's high I think wave [ii] is over and wave [iii] underway. This scenario is confirmed if we break SPX 1370.

Should the SPX get back into the downtrend channel we broke out earlier today then I think wave (c) is more likely.