11/11/20089:07 PM Pacific

The fact that we spent all day hanging around the triple .618 confluence (from last night’s report) and then worked higher is constructive. Since we are now familiar with all the possible patterns for a 4th wave, let’s look at probable price targets in the context of the patterns. If the triangle pattern is going to manifest, then the probable target for the next wave up is 946 ish in the S&P cash.

Looking at the futures and measuring an extension from the first wave up, there is no confluence or anything to highlight this level except perhaps the 200 period ma if it doesn’t work lower before price gets there. If we get 5 waves up, it is probable that 5 waves could end at this level, but with 5 waves up to this level, it would be only an interim target rather than a final objective.

11/11/20089:07 PM Pacific

The triangle does not look promising based on this extrapolation. The next chart shows an extrapolation of another 5 waves up with a 1:1 Fibonacci extension of the 5 waves up from the low that ended at 1008. The target for this completed pattern is 1068. This is the zigzag scenario. It is the strongest probability if we can maintain upward price momentum for a few days. Above 950 it is very high probability. The last chart is the most interesting and supports the zigzag thesis. It shows the retracement levels of 2 and (2) along with the 1:1 ratio extension level of the move up from the low. That is a powerful confluence at 1068. If we can build on these gains, there is a HIGH PROBABILITY we may have a date with this level.

11/11/20089:07 PM Pacific

11/11/20089:07 PM Pacific

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