S&P 500 ~ Weekly Non-Log Scale

In wave parlance, we should be at the tail-end of an Intermediate (B) wave within

Primary -C-, right in the middle of Cycle Wave <IV> which began in late 2000. Given the
idea that we’re in a (B) wave, it’s worth remembering these words from Prechter:
-B-
“B waves are phonies. They are sucker plays, bull traps, (Z)
“c”
speculators’ paradise, orgies of odd-lotter mentality or “e”
9/1/2000 “a”
expressions of dumb institutional complacency (or both).
< III > They often involve a focus on a narrow list of stocks, are often
(Y)
“unconfirmed” but other averages, are rarely technically
“c” “b”
strong, and are virtually always doomed to complete
retracement by wave C.”
“d”
INDEED! “b” (B)
“a” (X) “y”
(W) c
“g”
a
“e” “a”
(X) “c” “b”
(X)
“w”
“f”

(W) “x”
“a” “d”
(X) b

“b”

This is a “diametric,” a seven-legged corrective

pattern that takes the shape of either a “bow tie”
or a “diamond.” The “diametric is a probably a (C)
(Z) morphed Orthodox “double zig-zag.”
-C-
(Y) -A- 2012?
“c”
(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Weekly Non-Log Scale
One of the axioms of wave counting is this: “If there is way for a wave to take longer to complete,
assume it will.” This has been especially true of this current (B) Wave. Notice how long it has taken
the S&P 500 to take back the 1255 level from its lows. It took only 24 weeks to drop 590 S&P points
while it has taken 95 weeks to take it back. The point is that both the structure of the move off the
lows and the time it has taken to rally, relative to the previous drop, are all strong clues that this rally
is a corrective (B) wave.
(B)

“y”
c
1313
-5-
Critical Inflection Zone
1255 a
-3-

-1-
-4-
“w”

“x”
-2-
b

alt: (A)

“c”
(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 “y” (B)
S&P 500 ~ Daily with RSI c
-5-

a
-3-

“w” -1- -4-

g

“x”
e
-2-

b
f
c

a This is as sharp of RSI Divergence as we have seen in quite some time. There is only one
d
inescapable conclusion: We’re about to see A LOT of volatility. Because, this sort of
b situation will only be resolved by a severe acceleration higher (which sets a new high on the
RSI) or an imminent puke out.

(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily
(B)
I’m expecting this Minuette Wave -5- to conclude within the first several trading days of
2011 as we have now reached equality in time with Wave -1-. “y”
c
-5-

Wave -5- Targets: (b)

a 1261: 61.8% of Wave -3-
1267: 78.6% of Wave -1-
1291: Wave -5- = -1- (d)
[a]
-3-
(5)
(b)
[b]
(3) (c)
(e)
(1) (a) -4-
-1- (4)
-x- (5)

(3) (2)

(1)

(a)
(4)
“x”
(2)

(c)
-w- -2-

-y-
b

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ 180 min with Weekly Support and Resistance

-5-
(5)?
(3)?

(1)?
(4)?
(b)
(2)?

[a]
(d)
-3-
(5)

[b]
(3) (c) (e)
-4-
(1)
(4) (a)
-1-
(5)
(3) (2)

(1)
While I am expecting some sort of peaking action this week, it
continues to be prudent to WAIT for some sort of “sign” from the
(4)
market that it’s “ok” to begin shorting in earnest. A breakdown
below 1233 would constitute that “sign” for me. Alternatively, any
(2)
impulsive move lower on the 60 min. charts will force me into fresh
shorts.

-2-

-y-
b

Andy’s Technical Commentary__________________________________________________________________________________________________

 Dow Jones Industrial Average (Monthly Log Scale)

The Dow Jones Industrial Average has become flawed (for wave counting purposes)
over the years as it is an “average,” and not a true index of stocks. It is for this
reason that we don’t model the DJIA. However, the DJIA has a much longer history
than the S&P 500 and is useful in getting our “bearings” on the longer term wave
model. 2000
< III > -B-
-V- -D-
REPRINTED from 9/7/2010
-A-
-C- -E-
< IV >
- III - - IV - 2018-2030
1966
<I> -I- This period looks congestive/correcitve.
-V- -X- The Wave -V- did not start until the
- II - beginning of 1995.
(X)
- III - -Y-
1929
(Y) -W- < II >
<X> (W) - IV - 1982
-I-
-D-
-B-
- II -

-E-
<Y>
-C-
II
The Supercyle Wave II, which began in 1860,
concluded in 1949.
-A-

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Weekly Non-Log Scale
This is my preferred long term model. The “crux” of the count is that the Primary - B - concluded on 12/11/2007, after the “absolute”
high of the same year. It’s “possible” that the -B- even concluded as late as May 2008, when the Transports actually peaked. Because
of the prolonged nature of the -B- wave relative the -A-, the -C- wave MUST last at least as long as (A+B)/2, about 3.5 years.
Therefore, the current Primary -C- wave will not conclude for at least another year.
-B-
2000 (Z)
“c”
“e”
< III > “a”

(Y) REPRINTED from 9/7/2010

This is was a “failed fifth” terminal diagonal “c” “b”
conclusion to the technology bubble.

“d”
( X ) “b”
“a”
(W)
“g”
“a” ( B )?
“e”
(X)
“c” “b” ( B )?
(X)
“f”
(W)
“a” “d”
(X)
“b”

This is a “diametric,” a seven-legged corrective

pattern that takes the shape of either a “bow tie”
or a “diamond.” The “diametric is a probably a
morphed Orthodox “double zig-zag.”
(Z) (C)
(Y) -C-
-A-
2012?
“c”
(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily: The “Bullish”Case

(B)
REPRINTED from 9/7/2010 a “y”
c
-5-
-3-
b
An “orthodox” wave counter should be able to “w” -1-
come up with this exact wave count by “w” g d
labelling the “w” an ‘abc’ move up--it’s actually -4-
g
easy to force that sort of count.
e
“x”
e
c
-2-
a
b
c f
A “Contracting” triangle here would
explain the “thrust” and why the
“thrust” concluded where it did (the
apex of the triangle.)

d
a
b

We’ve dubbed this the “bullish case,” even though the ‘effective’ price action could be the
exact same as the “bearish case” where the (B) wave has already peaked. The important
distinction here is that the Intermediate (B) wave has not yet concluded. In this model,
though, we should get an “impulsive” c-wave from the b-wave low. Because of the depth
of the Wave -2- correction, we’re anticipating a “terminal” diagonal shape to this c-wave.

(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

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This report should not be interpreted as investment advice of any

kind. This report is technical commentary only. The author is Wave Symbology
NOT representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author’s "I" or "A" = Grand Supercycle
interpretation of technical analysis. The author may or may not I  or A  = Supercycle
trade in the markets discussed. The author may hold positions <I>or <A> = Cycle
opposite of what may by inferred by this report. The information -I- or -A- = Primary
contained in this commentary is taken from sources the author (I) or (A) = Intermediate
believes to be reliable, but it is not guaranteed by the author as to "1“ or "a" = Minor
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