*************** PEBBLEWRITER.COM IS LIVE! TO SIGN UP, CLICK HERE ***************

Monday, April 9, 2012

Analog Watch: Apr 9, 2012

Just eye-balling them, these two patterns are only vaguely similar.  But, when analyzed from the standpoint of Fibonacci Time and Price patterns within rising wedges, the similarities are inescapable.

It strikes me as more than coincidence, too, that these two moves can be seen as a big measured move pattern.  The June 2010 - May 2011 move was 359.67 SPX points.  From the August 2011 lows to the 1433.11 Butterfly completion point (from 1356.48) would equal 358.34 points.

Both complete at the red, dashed line overhead -- which just so happens to be the upper bound of the big rising wedge that's been in the works since Mar 2009 (though the top line is actually something much more significant -- more on that later.)

I'm intrigued by the thought that the earlier rising wedge broke down around the .886 in both time and price -- which is what seems to be happening with the current market.  But, the market subsequently rallied and completed a tag of the original rising wedge price target -- albeit 10 weeks later than the original apex would have been.

If the price decline which began on Friday were to be arrested in the next few days, I suspect a similar rebound would be in store.  The .886 of the 2007-2009 decline is up ahead at 1472.   And, the smaller, yellow rising wedge intersects with the large red, dashed rising wedge upper bound sometime around the first week of May in the 1465-1470 range.  It'll be interesting to see what Bernanke pulls out of his hat in his Monday night speech.

Stay tuned.

No comments:

Post a Comment