Saturday, July 11, 2015

MTU Weekend Ed. - Potential Upswing (7/10/15 close)

... draft in progress, subject to change ...

The pullback in SP500 from its Mid-May record high has been a three-wave structure so far (Chart 1). A break above its July 7th high (2083.74) which invalidates a potential bearish triangle would confirm the end of the three-wave decline. Since the Dow (Chart 2) and NDX (Chart 3) have already exceeded their respective July 7th highs, odds appear to favor similar actions in SP500.

Price actions in SP500, Dow and NDX suggest the possibility that the three-wave ABC decline ended with a triangle and Friday's advance was the initial wave of a new upswing (Chart 1 green, and Chart 2 and Chart 3)

Whether the proposed three-wave ABC decline is part of a larger bearish structure remains to be seen. If the pullback is complete, SP500 is likely to wrap up wave E highlighted in Chart 4. Otherwise, in addition to the small-degree gray wave [v] in Chart 1, a larger EDT from the high is another possibility. See Chart 5.