-X-

S&P 500 Daily ~ A “Triple” Concluded (Z)

“c”

“a”
(Y) “x”
“c”
“b”

“a”
1036
“y”
“w” (23.6%)
(X)
(W) “b”

869
(X)

This week’s very sharp decline provides strong evidence that the corrective move that began at 667
is over and that a new bear market phase is beginning. Major trend lines from the 667 and 869 lows
have been decisively snapped. There still remains a potential shallow trend channel that might
provide some support this week, but if it does, it will likely be only temporary support. The S&P 500
seems destined for the 1,036 level (the 23.6% retrace of the entire advance) over the next several
weeks. The medium term picture looks something like this

667
-W-

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 Weekly (Log Scale) ~ Duration
One of the important considerations in proper Wave Analysis is time. The <A>  <B> lasted approximated 375 weeks, with the <B>
wave occupying much more time than <A>. In such scenarios, the resulting <C> wave should last as long as (<A>+<B>)/2. This puts
the <C> wave finishing in the middle of 2011. If the <B> actually finished in May 2008, then it would put the conclusion into the
beginning of 2012, a Presidential Election Year. The much bigger picture continues to like the next page 

Wave III <B>

(B)

(A)
-X- or -B-

( B )/( II )

( A )/( I )

( IV )

<A>
( C )/( III )
Interestingly, this model fits quite well with historical analysis that
shows the second year of a Presidential term (2010) being the worst
in terms of stock market performance, while Years 3 and 4 can be (C) (V)
very good (2011/2012 bottom?). -W- or -A-
-Y- or -C-
<C>
Andy’s Technical Commentary__________________________________________________________________________________________________
 S&P 500 Weekly (Log Scale)
Supercycle Wave III concludes amid
“euphoria” over stocks.
<B>

(B)

(A)

-X-
<D>
2014/15

<A> 2020?
<E>
2011/2012 IV
-Y-
(C) <C>
-W-
This large Supercycle Wave IV triangle is my preferred model for the next several years. Essentially, it’s going to be a long
slog as the U.S. grapples with credit deflationary forces and the efforts of government/Fed to arrest the deflation. Some time
at the end of this decade, after the Baby Boomers have finally cashed out of the stock market to provide for their own
retirements, it should be a good time to enter the market.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 (180 min.) ~ “Something” Ended…

The theory we had of a “c” wave that was taking the shape of a “terminal diagonal” has
proven correct with the sharp pukeout that has retraced the entire “c” wave in a very short
(Z)
period of time--something that is required at the end of a “terminal.” It’s too early to tell
“c”
what the wave count is off the highs (I’ll make an attempt on the next page), but the trading 1050
scenario is pretty clear: Rallies should be sold as the trend is now lower.

The market has created two areas of resistance now

at 1115 and 1129. Shorts should use these levels to
formulate “stops losses” in case this “trend change”
thesis is wrong.
1129

A “Terminal” c-wave
1115

There is classic chart support here. I would expect

the 1084 level to attract some buying interest.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 (15 min.) ~ A guess at the count…
(Z)
“c”
1050

At this point I do not see a completed five wave move lower. In this
model the waves (1) and (3) are equivalent in size which means that
(2) the Wave (5) is going to be “extended.” The minimum target for this
set up would be a Wave (5) low at 1078-1080, but it could easily
move lower than that with a ‘fifth extension.”

(1)
[a]

[c] (4)
[e]
(3)
[2]?
[d]
1105
[b] [1]?

Aggressive traders can add 1105 in as another level

of resistance. The market clearly “broke down” from [4]?
that point, so it should now act as a ceiling for any
short term bounce.

1084
[3]?

(5) of ??
Andy’s Technical Commentary__________________________________________________________________________________________________
 S&P 500 Daily ~ A “Triple” Concluded? ( Z ) of - B -?
“c”
1050 “e”?
Observe the trajectory of the various waves higher. “a”
The upside momentum is clearly slowing down… (Y) “x”
“c”
“d”?
“b”
1036
“a” (23.6%)
1033
“w” “y”
“b” (X)
(W)

Reprinted from 1/16/10

869
(X)

If we did finish the (Z)-Wave of a “triple,” then the count from 667 would look like this model. We should
see the market collapse down to the 1036 level, which is the 23.6% retracement. That level would also
align will with prior resistance/support. It’s easy to imagine plenty of buying support in the 1036 zone.
For months I’ve been envisioning a “triangle” conclusion to this whole pattern, so I’ve outlined that
possibility here as well.

667
-A-
Andy’s Technical Commentary__________________________________________________________________________________________________
 DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. This report is technical
commentary only. The author is NOT representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author’s interpretation of technical analysis. The
author may or may not trade in the markets discussed. The author may hold positions opposite of
what may by inferred by this report. The information contained in this commentary is taken from
sources the author believes to be reliable, but it is not guaranteed by the author as to the accuracy
or completeness thereof and is sent to you for information purposes only. Commodity trading
involves risk and is not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading:
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND
RISKY BUSINESS. Before you invest any money in futures or options contracts, you should
consider your financial experience, goals and financial resources, and know how much you can
afford to lose above and beyond your initial payment to a broker. You should understand commodity
futures and options contracts and your obligations in entering into those contracts. You should
understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk
disclosure documents your broker is required to give you.