Saturday, June 14, 2014
MTU Weekend Ed. - Near Term Scenarios (6/13/14)
The 1.52% drop from its record high in SP500 this past week bodes well for the proposed ending diagonal triangle (Chart 1 and Chart 2), following a proper overthrow (6/6/14). If the EDT scenario plays out, SP500 is likely to see 1750 before the end of Q3.
However, price actions this past week could signal that the pullback was already over.
 SP500's retest of the upper EDT line support has been successful so far (Chart 1). There's additional support below at the inverse head-and-shoulders breakout area (around 1900).
 This past week's pullback can be comfortably counted as an ABC corrective structure. Since NDX peaked two days later than did SP500, we may be looking at an expanded flat in NDX (Chart 4) and a flat in SP500 (Chart 5). Moreover, wave A-down conveniently divides the entire pullback range into 0.382 and 0.618 Fibonacci segments.
While it is a challenge to decide which of the above scenarios is most likely, selling opportunities are emerging from a big picture perspective. Let's see where the market brings next week.