Wednesday, September 14, 2011

S&P 500 ~ Elliott Wave Count ~ 14 September 2011

The bounce from the support area at 1140 continued today. By early afternoon the SPX hit my preferred target for a potential second wave at 1186. The market didn't show any signs of weakness there though and just rallied further up to the next resistance area around 1204-08.

As you can see in the chart the support and resistance areas continue to work very well:

Support levels remain at 1140ish and 1120ish. Resistance areas are at 1204-08, 1230ish and 1260ish.

Even though the (i) (ii) i ii count is technically still possible I changed my SPX Elliott wave count so that it matches my Nasdaq count. Wave A or 1 ended at 1120 and wave B or 2 is now underway.

There is a noteworthy bearish alternative count though: today's rally could be a wave c of (ii), i. e. wave (i) ended at 1140 on Aug 6th and wave (ii) at today's high (or tomorrow slightly higher).

I suggest to use the support and resistance levels to enter a trade though. If you look a chart again you can see how well these levels worked during the past few weeks - in fact much better than Elliott waves.