S&P 500 counter-trend rally could surprise to the upside

• Posted by tradingpoints
• on February 16th, 2010

DarthVader, your sad devtion to that ancient religion [of Elliott Wave Analysis] has not helped conjure up [your nihilistic fantasy scenarios].

While fully admitting that the S&P 500 rally from early February lows looks more corrective than trending price action, with its large overlapping price swings. It seems that every EWer out there is pounding the table that the counter-trend rally (so far) has run its course and a nihilistic dystopian future awaits us all [shortly]. Is it enough pessimism to continue this counter-trend rally to post crash highs? One trade at a time.

What we do know is this, 1045 was a -9.2% correction from recent highs and this level was soundly rejected. There are huge amount of buy stops just above 1084 $SPX cash that if triggered could propel the indexes to 1091 and 1111, thus catching many market participants offsides.

Multi-timeframe charts below for Cash, ETF and futures:

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S&P 500

$SPX" href="http://blog.chart.ly/wp-content/uploads/2010/02/SPX1.gif">

S&P 500 ETF $SPY

S&P 500 Futures (day session) $ES_F

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