Ending Diagonal Trangle in S&P500 index

On 1st April, when the S&P500 index was at 797, I suggested that we will get  a move to just short of 850 but that will be about where the rally will fail. After reaching 845 on 2nd April, the market has been gently easing lower. The analysis done on 1st April used the daily chart. When we look at the hourly chart, we get some additional clues. The most important clue is that all moves from the low of 766 to the high of 845 has been 3-wave affairs. We already know (or think we know) that the index is in the fifth wave of the recovery from 666.  When we see a move unfolding in ‘threes’ at the fifth wave position, we should start looking for a diagonal traingle, which is  a very profitable setup. With this heavy technical stuff, you will be able to make better sense of the attached chart. Enjoy.

PS:  If you don’t like the technical speak, don’t be too worried. I invariably include enough non-technical comments to make it clear where I think the market is going.

 Related S&P500 links:

Was that the stock market bottom?SNP500 revisitedS&P500 and CitiFifth wave extensions can make you rich!What is a significant rally in the stock markets?Harmony in markets: S&P500Ending Diagonal Triangle in S&P500?S&P500 Elliott Wave updateS&P500 index: is a top already in?S&P 500 update: where is the top?S&P500 continues its rallyS&P500 remains resilientS&P500 ready to dive?S&P500 Update: May 19, 2009S&P500 Elliott Wave update:21 May 2009S&P 500 breaks higher: update 2 June 2009

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