Weekend Chart Update #3

Here is my preferred big picture count. I believe that we have completed a double zigzag (Y) at the 956 high. It appears that we have finished an ABC structure at the 869 low, which I have labeled X. I am of the opinion that we are in the process of tracing a "triple zigzag", which consists of 3 sets of zigzag correctives with intervening X waves to separate them.

This is a rare pattern, but basically comes into play when a "double zigzag" (2 sets of zigzag correctives) has not retraced an adequate amount. 3 is the most that is allowed. When this structure is complete, then this bear rally will conclude. That assumes that I'm correct in my interpretation of the structure.

My alternate is at the bottom.

Friday was a smallish range day, putting in a small bodied candle (SPX was a doji). This was to be expected, if in fact, we were in a 4 wave (white).

It looks as though we finished a 3 (white) late Thursday. We may be tracing out another triangle (dotted yellow). We should know fairly quickly, maybe even by Sunday night globex, as it looks close to completion.

I would be surprised as wave 2 was a mess and alternation would make sense. Perhaps this turns out to be a flat...that's how I have my labels set. We will know soon enough.

When 4 completes, there should be one more 5 wave structure up to finish off A. At that point, we will begin correcting the move from the 865.25 L. Targets for this upcoming 5th are guessing games right now. It depends on what happens to this 4th. If you assume that 928 will be the low, then the 61.8% sits at 974.75. Due to the extension of the 3rd, it makes more sense to look at wave 1 equality, which is 19 handles. Currently this puts the target at 947 - pending 4's outcome.

This is a weekly OEX line on close chart. There are some interesting trendline fits. The dark gold lines come from a Fibonacci fan from the highs. Again some interesting fits.

The middle pane is a stochastics (5,3,3). The first thing that jumps out is the divergence that came from the June highs. That looks small compared to the potential divergence setting up.

I spent way to much of my Saturday looking at charts. I'm throwing this in to just let you be aware that there are valid bearish scenarios. We don't have to keep screaming higher.

This chart assumes that our highs finished an A and we are working on a B. What if this is an expanding B wave triangle? It's possible, though the probabilities are very low.

Another scenario that is possible. Assume again that we finished A. Now move your triangle labels over and start A where big A is. Another expanding triangle that would eventually call for higher prices, but they would certainly go lower first.

Again, low probability in my opinion. Keep an open mind and don't get married to a bias.