We broke over the important pivot od 1215 this week on the SPX. However, the break was only by 2 points. If we get some follow through come Monday morning, this should imply a clean break of this pivot. There are a few possible routes that the market could take from here. The 2 that stick out to me both happen to be bullish. However, one is more bullish than the other.
The first one is a count on the SPX. We could be in an ending diagonal. Wave (iii) may have completed at the highs on Friday.
If this is the case, we should get a quick and sharp pullback for wave (iv). Prices could come as low as 1191 and this count could still be in play. After the wave (iv) pullback, we should continue higher towards 1225.
The more bullish count is on the Nasdaq.
We are in the middle of wave (v) for this count and should continue higher from the open on Monday. We could also get a very small pullback to 2205 for a wave b, but this pullback is not required for this count, however a wave b pullback would set up more divergences when we make highs for wave c.
The SPX daily chart also implies that we could not be done yet. We are at some resistance from the Lehman bankruptcy day, but this could be easily.
The 61.8% Fib retracement of the entire down move also resides at 1228 - which is close to 1225. So that entire area between 1225-1230 should serve as solid resistance if we get to it.
The reason I am hesitant to call for a bearish count is because we basically closed at our highs on Friday. So there are basically no waves down from our highs, since we are sitting right on them to the penny. And even if we are to gap down on Monday, this is not how a new downtrend would likely start, because bearish opens usually reverse quickly. This is a pattern that has re-occured many times.
I also just wanted to post a quick rough count on Apple.
We could be close to a top, the next pivot to watch for is 275, which could be the top for this wave.
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