"All human activities have three distinctive features: pattern, time and ratio - all of which observe the Fibonacci Summation Series" (R.N. Elliott - "Nature's Law - the Secret of the Universe" - 1946)

Thursday, February 21, 2013

SPX - Possible top of minor degree

Yesterday's session changes the outlook and has strong bearish implications.
There is a high probability that the market has reached a top of minor degree even if the pattern that it would close the bullish wave is not clear, because it doesn't seems an ending diagonal, but for exclusion seems to me the most likely scenario (with more than one doubt...).
The confirmation of the beginning of a corrective phase would occur with the break-down of 1495, but the index could also enter into a sideways correction respecting this support.
Now, considering that my preferred scenario has been invalidated by the drop below 1514, it's necessary a recount.
The new preferred scenario considers a top of minute degree, and the beginning of a new wave x that, for the principle of alternation, should be a "sideways type correction".
In this market situation, the best strategy could be to close long positions and stand outside.
Have a great trading day... with care!!!


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