Big Picture:
The past twenty years can be viewed in terms of channels (both red and purple) and rising wedges. Here, we see the smaller yellow wedge set up within the larger red wedge. Both are fairly advanced (especially the yellow.)
We also have a red channel line from the Oct ’07 high connecting with current prices. I believe these channels are valid because they’re exactly parallel a trend line connecting the 2002 and 2009 bottoms.
Overall, the red channel lines have had significant influences on prices — particularly short and medium-term turns. The purple channel lines have influenced many of the major turns. SPX is currently at the intersection of red and purple channel lines.
Medium Close-up:
Zooming in, we can see some meaningful Fib ratios in the chart:
(1) The apex of the yellow wedge is near the Fib .886 (purple) of the Oct ’07 to Mar ’09 drop; it tags the red rising wedge at around May 7 at 1462. Rising wedges rarely make it to their apex but tend to fall out around the .618 mark (in time.)
(2) there is a nice looking Fib time series defining major highs and lows (red.) The series completes at the apex of the larger (red) wedge. We’re within spitting distance of its .618, which is also very near the apex of the yellow rising wedge.
(3) there’s a well-formed Butterfly pattern that began July 4 at 1356 and made its low at 1074.77 in October. It’s visible as the yellow Fib pattern on the chart; the 1.272 Fib is just overhead at 1433.11.
Close-up:
Using the October 1074 low as “0%” and the yellow rising wedge apex as the 100% mark for the Fib time ratio, we are currently between the .786 (Mar 21) and .886 (Apr 12) levels. From a price standpoint, we’re at the .886 of the 1074 – 1464 rise (the yellow wedge’s price range.)
While any jolt to the markets could unravel this hugely overbought market, it’s just as likely we’ll go on to complete the Butterfly pattern at 1433 sometime in the next two weeks. If so, however, we should see a mild correction first.
The key is the yellow rising wedge. The bottom trend line is currently about 1382. If we can stay inside a little longer, 1433 clearly remains on the table.
The past twenty years can be viewed in terms of channels (both red and purple) and rising wedges. Here, we see the smaller yellow wedge set up within the larger red wedge. Both are fairly advanced (especially the yellow.)
We also have a red channel line from the Oct ’07 high connecting with current prices. I believe these channels are valid because they’re exactly parallel a trend line connecting the 2002 and 2009 bottoms.
Overall, the red channel lines have had significant influences on prices — particularly short and medium-term turns. The purple channel lines have influenced many of the major turns. SPX is currently at the intersection of red and purple channel lines.
Medium Close-up:
Zooming in, we can see some meaningful Fib ratios in the chart:
(1) The apex of the yellow wedge is near the Fib .886 (purple) of the Oct ’07 to Mar ’09 drop; it tags the red rising wedge at around May 7 at 1462. Rising wedges rarely make it to their apex but tend to fall out around the .618 mark (in time.)
(2) there is a nice looking Fib time series defining major highs and lows (red.) The series completes at the apex of the larger (red) wedge. We’re within spitting distance of its .618, which is also very near the apex of the yellow rising wedge.
(3) there’s a well-formed Butterfly pattern that began July 4 at 1356 and made its low at 1074.77 in October. It’s visible as the yellow Fib pattern on the chart; the 1.272 Fib is just overhead at 1433.11.
Close-up:
Using the October 1074 low as “0%” and the yellow rising wedge apex as the 100% mark for the Fib time ratio, we are currently between the .786 (Mar 21) and .886 (Apr 12) levels. From a price standpoint, we’re at the .886 of the 1074 – 1464 rise (the yellow wedge’s price range.)
While any jolt to the markets could unravel this hugely overbought market, it’s just as likely we’ll go on to complete the Butterfly pattern at 1433 sometime in the next two weeks. If so, however, we should see a mild correction first.
The key is the yellow rising wedge. The bottom trend line is currently about 1382. If we can stay inside a little longer, 1433 clearly remains on the table.
