SPX Challenging its Orthodox Broadening Top Formation

By: Anthony_Cherniawski

SPX at the hourly level is still challenging its Orthodox Broadening Top formation. Earlier I had reported that I was expecting two Primary Pivot days. The first was Wednesday where SPX made the Wave B high at 1881.60. The second was today, where it appears to be making a Wave [ii] high that may be complete at 1864.28.

I had originally thought that either or both of these Pivots would be lows, since the Elliott Wave structure suggested a Wave (3) low is due at this time. That is the nature of my Cycles Model. The Pivots are reversals and have to be applied against the direction of the previous Cycle. So in this case, both Wednesday’s and Friday’s Pivots are reversals down. Using the 4.3 day panic guideline, we may ascertain that the panic decline may extend to either the close on Friday, February 19 or shortly after the open of the market on Monday February 22. I will try to be more specific as the decline offers us more detail.

Apparently the rally is an effort to put the bulls at ease and confuse the rest of us. In reality, it appears to be aiming at the daily Cycle Bottom resistance again, currently at 1868.24. Whether it hits that target or falls short may not be important, as it is simply the index testing and retesting resistance as it is clear this is what happened on Wednesday and again today.

That this is happening on two Primary Pivots may mark the start of a panic Cycle going into next week. The last half hour of the day will be revealing, as the hedge funds and institutional investors will weigh in. This rally may have just given them a better perch from which to sell longs or go short.

Regards,

Tony

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