S&P 500 Commentary 20Feb12

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Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ A Series of Corrective Moves Higher

One of the bizarre and difficult of aspects to this market ever since the March 2009 lows is the tendency for the market to propel higher

in corrective patterns that yield NO meaningful retracements until the wave higher has finished. In other words, the moves higher havenot been ³impulsive´ in nature and µtrustworthy.¶ They¶ve been powerful corrective waves that offered shorts no way out as each wave

failed to even register a small 38% retracement.

67 Trading Days;

Max Retrace = 29%

71 Trading Days;

Max Retrace = 29%

53 Trading Days;

Max Retrace = 38%

54 Trading Days;

Max Retrace = 38%

March µ09




S&P 500 ~ A Series of Corrective Moves Higher

But wait, there¶s more of these«.

49 Trading Days;Max Retrace = 24%

56 Trading Days;

Max Retrace = 24%

32 Trading Days;

Max Retrace = 50%

One of these waves was not like the

other«and it was an omi nous sig n

for the Market.




S&P 500 ~ Current Rally

The current corrective move yielding no more than a 25% correction has lasted 41 trading days. It this is going to look like

all the other such patterns, then it should have a several days longer to run.

41 Trading Days;

Max Retrace = 25%




S&P 500 ~ 120 min. with Weekly Support

I¶m not going to even try a shorter term count because this has become a ridiculously confusing pattern. The market is into key resistance

right now as it approaches the ³double top´ zone from last year (1347-1371). I would be surprised if the S&P 500 takes out that zone prior to a good retracement of some kind. The trend channel up is extremely well defined with plenty of ³touch points.´ This is a ³corrective´

leg higher, so trading bulls need to be very ³quick´ to exit long positions when support breaks. Longs should consider 1,317 and 1,295 for

first and second points of support in the week ahead. Though, if that lower trend channel breaks,

this market will likely coast lower. That level looks like 1330 for Monday.

COPIED from 2/12/2012




S&P 500 ~ Daily with Weekly Support and RSI

In the last few weeks the best I¶ve been able to do for readers of this report is to identify the levels that should provide support--i.e: stop

loss levels for bulls/longs or entry points for those waiting to short. This continues to be the best I can offer under these circumstances.

The market his heading for a major double top at this point, so it would be a foolish long not to have some tight stops. With that, 1335 and

1300 look like good first and second levels of support. 1371 is the previous high, so it would be an ³obvious´**

last resistance point for the S&P 500.

S mall R SI

Divergence

** Please note there has been a tend ency for this market to briefly violate

³obvious´ support and resistance poi nts only to reverse back through those levels.




S&P 500 ~ Weekly Longer Term Count Updated

( A )

³w´

e

³x´

³y´

Confidence in the previous longer term counting of the ³y´ and ³x´ waves has wavered due to the price behavior of the market. I am now

forced to make a slight adjustment to the previous longstanding count. It¶s becoming obvious that the last ³x´ wave did not conclude at the

1075 low--it had to have concluded later if that¶s even the correct count. The idea of ³contracting´ triangle ³x´ wave fits with the ³thrusting´

nature of this market since the year began. Confidence in this wave count is tepid. We discussed two other alternative theories last week

(copied on the last two pages of this report.) Those counts must also be considered.

( B )

³z´

( C )

a

b

c

d

a

b

c

d

e

³x´

e?

BOTTOM LINE: W hether this is the correct count or the mod els on the next two pages are

right, the bottom li ne is similar--the market is becomi ng overextend ed on this leg and is d ue for

some type of d ecent correction (100-150pts). W e will not k now which of these mod els is the

correct one until we see the price action d ow n and where it might fi nd support, if any. This

market is i n an extremely vul nerable place over the next few weeks.




S&P 500 ~ Weekly Line on Close

( A )

³a´

³b´

³c´

This is NOT my wave count or idea. This is a count that it is being promoted by Glenn Neely of NeoWave. I can¶t find too much wrong with

it, so it must be considered. He suggests a large contracting triangle from the March 2009 low. Because of the shape of the pattern and

the ³smallness´ of the ³b´ wave, it¶s possible to get a marginally higher high before the (B) wave ultimately completes. It would be a triangle

with a strong upward sloping bias. I suppose this count, along with a marginally higher high, would inflict the most amount of pain

on the greatest number of people. The bulls would obviously be ³besides themselves´ if we were to set a fresh

high in 2012 and the bears would surely ³throw in the towel.´

³e´

- B -

( C )

³d´a

b

c

( B )COPIED from 2/12/2012




S&P 500 ~ Weekly Line on Close

³c´

( A )

³a´

e

³b´

³c´

This count is yet another possibility if we take out the highs. This idea was discussed a few months ago and it must be considered. We

could be in the middle of large scale diametric. It certainly ³fits´ the mold of a diametric in the sense that all the legs have been ³corrective´

and have taken ³similar´ amounts of time, a key element of a diametric. If this particular shape develops, it will confirm Neely¶s belief that

there are ³new´ wave forms that exist as this particular outcome would fit no known orthodox Elliott Wave pattern.

³a´

³b´ ³e´

- B -

( C )

a

b

c

d

a

b

c

d

e

³d´

1

4

5

3

2a

b

c

³f´

³g´

( B )

COPIED from 2/12/2012



DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. Thisreport is technical commentary only. The author is NOT representing himself

as a CTA or CFA or Investment/Trading Advisor of any kind. This merelyreflects the author¶s interpretation of technical analysis. The author may or may not trade in the markets discussed. The author may hold positionsopposite of what may by inferred by this report. The information contained in

this commentary is taken from sources the author believes to be reliable, butit is not guaranteed by the author as to the accuracy or completeness thereof and is sent to you for information purposes only. Commodity trading involvesrisk and is not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC) has said

about futures trading: Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKYBUSINESS. Beforeyou invest any money in futures or options contracts, you should consider

your financial experience, goals and financial resources, and know how muchyou can afford to lose above and beyond your initial payment to a broker. Youshould understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the riskdisclosure documents your broker is required to give you.

Wave Symbology

"I" or "A" = Grand Supercycle

I or A = Supercycle

<I>or <A> = Cycle

-I- or -A- = Primary

(I) or (A) = Intermediate

"1³ or "a" = Minor

1 or a = Minute

-1- or -a- = Minuette

(1) or (a) = Sub-minuette

[1] or [a] = Micro

[.1] or [.a] = Sub-Micro

P LEASE NOTE THAT THERE IS ADDITIONAL INTRA-WEEK AND INTRA-

DAY DISCUSSION ON TECHNICAL ANALYSIS AND TRADING AT

TRADERS-ANONYMOUS.BLOGS P OT.COM

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S&P 500 Commentary 20Feb12