I have been updating the SPX long-term count in the weekly posts, but before I leave for the summer holidays I wanted to review my preferred scenario.
- Very long-term trend is sideways/down: From the 2000 Top price is unfolding a Double Zig Zag, therefore now price is involved in completing the wave (X). Once the wave (X) is in place price will begin to unfold the second Zig Zag down towards the 2009 lows.
- Long-term trend is up: From the November 2008 low price is unfolding the wave (X) within a Double Zig Zag that is not completed yet. If this EWP plays out then off the October 2011 lows price has to unfold the last Zig Zag (ABC) up.
Therefore now price should be involved in unfolding the wave (B), which should not breach the rising trend line support in force from the March 2009 low. Hence the area of 1220 (April 2010 top) and where we also have the 100 d MA is the critical support zone.
