SPX: intermediate iii and iv in!?; projected targets for intermediate v

Well 1780 held as key support and the 80/20 rule is still in play. I have re-adjusted my count on the SPX and believe based on fib-extensions, retrace levels, and the daily MACD histogram that 1813.55 was intermediate iii of Major 5 of Primary III, and 1799.09 was intermediate iv. Let me explain:

1) intermediate i from 1627 to 1729: 102 points; intermediate ii down to 1646; intermediate iii should ideally extend, as you all know, to 1.618x i, measured from ii: 1646 + 1.618x 102 = 1812. Market hit 1813… Pretty darn close and strongly suggests to me 1813.55 was intermediate iii.

2) the MACD often peaks during a 3rd of a 3rd wave. Well, in this case, the daily MACD histogram peaked on 10/22/2013 @ 1759.33, which is imho minute iii of minor 3 of intermediate iii (of major 5 of primary III) Note: not shown on chart below since chart is hourly

3) 4th waves tend to retrace to the previous 4th wave area which was in this case 1776… (1780 +/- 5 key support) and it held (this is also the 1.00x extension of Primary I, measured from II!)

4) The retrace from 1813.55 to 1779.09 was deeper than the retrace from 1775.22 to 1746.20: 34.46 vs 29.02 points, respectively, and suggest to me that the last decline was thus of a higher degree.

With that out of the way, lets look at some targets (yellow, red and blue on chart): intermediate v should ideally extend to 2.000x i, measured from ii: 1646+204=1850. The R2 on the daily is at 1855…. 5th waves can also go to the 1.764x extension, which is 1825. The OEW pivot is at 1828 and the daily R1 is at 1830… Also, a trade through 1780s suggests (often and at least) 1820s based on the “80/20 rule”. Lastely, the 1.764x extension to 1826 is right where Major 5 is 1.618x Major 1, measured from Major 2 and also close to the 1.07x extension of P-I.

SPX update 12072013   

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2 thoughts on “SPX: intermediate iii and iv in!?; projected targets for intermediate v

  1. Excellent job of labeling the chart!
    How would you describe Intermediate 2 vs. Intermediate 4 to satisfy EWT “Rule of Alternation”?

    • Thanks tom! I haven’t compared ii and iv in detail, but ii was a zigzag (5-3-5) IMHO and iv appears like either a 3-3-5 or a 5-3-3. Note that 4 and 2 don’t have to necessarily always alternate. They often do, but not a requirement: form over structure!

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