S&P 500 EOD Review 14 Dec 2011
The S&P 500 is slowly edging downwards. The last 2 down moves are impulsive and this could be counted as 1-2-i-ii type of move but I think that it is actually a zig-zag which completes the leg e of the Expanding Triangle. But there is still no divergence on the MACD to the upside.
This down leg has retraced 50% of the previos up leg. The 61.8% retracement is at 1200.
If the market is poised to move higher, buying should come in soon. Otherwise, the bears are going to win and a sharp sell down can be expected.
Alternate View
The 1-2-i-ii type of move is unfolding which is setting the stage for a 3 of 3 powerful move down. Reason why I’m still not buying the 1-2-i-ii move is because the down moves are not as strong as the previous upwards moves that we saw on 28 and 30 Nov 2011. Therefore this leg down is looking relatively weaker and does not support the notion that we are in 3 of 3.
There could be a horizontal Triangle forming on the daily as well with this final move leg e of the Triangle.
S&P 500 Fibonacci Confluence
The Fibonacci Confluence band at 1220 – 1228 got penetrated and the S&P 500 stopped at the next band which is 1210. As mentioned yesterday, this type of move is not looking good for the bulls.
S&P 500 Volume
The volume is picking up with the selling. This is also quite bearish and we could see the S&P 500 heading lower still.
Elliott Wave Analysis 