SPX Chart Analysis
The very long term monthly exponential moving averages will be in full bull market alignment as soon as the 20 moves above the 50, which appears to be imminent.
The weekly chart has already moved into full bull market alignment with a bull cross of the 50 over the 200 a month ago.
The daily chart shows a probable Wave 3 rally off the July 2010 bottom.
Evidence strongly points to this move as a Wave 3 impulsive bull move and not a C wave corrective. Within that context there are a variety of scenarios describing where the index is within that Wave 3. Above is one possible scenario, which calls for a minor (iii) top soon near 1340. The wave (iv) correction would be of the same degree as the August 2010 decline, which would suggest a selloff lasting 2-4 weeks and giving back 38.2%-50% of the prior wave from the September 1, 2010 bottom.
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