Wednesday, November 12, 2008

Strong bounce possibility in SPY

Very strong possibility of a good bounce here.
this set up appears much more promising than the wedge set up from a day ago.

If it occurs, whether it is a rally or just a bounce within the consolidation zone is another matter.

Multiple reasons for a bounce.

1. convergence of trendline and triple support.
2. v oversold on 60 min time frames
3. angle of selling is steady but not steep and similar to the last move down
4. RSI/ CCI below 20
5. OPEX/ G20 meeting upcoming
6. SPY has just completed CD leg which was equal to AB. Within CD leg, another harmonic AB=CD sequence

If support breaks, stop is set around 81-82. This seems almost too set up to be true so if it fails, I will fold immediately and reassess.

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