Even though we had a lower close week over week the cash S&P500 formed an uptrending price bar on the weekly chart higher. As shown in the chart we once again have found support at the confluence of the short (red) and medium (blue) moving averages. A new downward pulse began at this week’s high. Also of interest is that we continue to close at or above the lower of three Gann angles (shown in red on the chart) from the March 2007 low. The support identified in prices by these tools is critical as a failure to hold 1489 would be a bearish development. I expect it will hold.
If our Elliott Wave count is correct than we now have four waves up completed from the August low and have begun the fifth, which is subdividing. This week’s downward price pulse being associated with wave “2 of v”. The Fibonacci and Gann (green lines) targets derived from the weekly chart are shown and are unchanged from last week. Target ranges for wave “v” are 1597-1603, 1624-1627, and 1658-1665. I am also sticking with a guess of November 28 – December 7 for the end of “v”.
Bearish divergence remains in place on the weekly chart between price and all the momentum indicators I follow. This indicator of “trouble bubbling under the surface” was covered in yesterday’s post concerning the monthly chart. The only thing keeping this market up is “time”. In my work time is just not up for this bull.
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