Saturday, June 13, 2015

MTU Weekend Ed. - A Decision Point (6/12/15)

SP500 rebounded sharply from 2072.14 (see Rally Next? (6/5/15)) but gave back half of its recovery on Friday. We monitor for a breach of the range defined by the pullback low (2072.14) and rebound high (2015.02) in the context of our three tracking scenarios.

Chart 1 revisits the big picture since the 2009 bottom. As discussed before, we track the 2015 price actions in SP500 as the end of the blue wave [3]-up (or [C]-up), the transition into the final leg of the blue wave [4], or part of the green wave [5]-up.

Within that context, recent price actions have allowed us to uncover the following near term tracking scenarios.

Base case bullish scenario (Chart 2)
An EDT wave E-up of (5)-up of [3]-up is still unfolding. The June low is wave [d]-down of E-up. Wave [e]-up is in progress.

Alternative bullish scenario (Chart 3)
Wave (2)-down of wave [5]-up is a lengthy sideways pullback. The final decline is a potential expanding EDT, potentially targeting the 2040 area.

Alternatively, wave (1)-up of wave [5]-up could be an LDT to the all-time-high and wave (2)-down has just commenced.

Alternative bearish scenario (Chart 4)
SP500 has concluded its wave [3]/[C]-up, or wave (D)-up of its wave [4]-down. An LDT decline begins the next down swing.