Posted on April 27th, 2008 at 11:20 PM

     One of the most asked questions asked of me recently is, "Do I think the market is going to rally from here..."  Here is what Advanced GET and the chart patterns show.

     The SPY is currently in an Elliott Wave 4 down which should support new lows in the market, however based on our trading criteria there are a few warning signs that do not suggest new lows coming anytime soon.  The first thing I see is that our PTI (Profit Taking Index) is lower than 35, when the PTI is that low it suggests that the market has seen too much profit taking and will not be making new lows, or if the market does make new lows it will be a slow and tedious move.  The second problem is the Wave 3 Time Channels (The Red, Green, and Blue Levels) in a normal Wave 4 we should not exceed the Red Channel.  We have violated this level and this indicates more than normal profit taking.  The ultimate sign on the SPY is the approaching retracement of .618, once Wave 4 exceeds this retracement the chance for a new low is historically less than 30%, this level is 140.81.  If the SPY rally's past this price we may see a retest of the October highs.

~Ron Wheeler

Additional Resources:

Join us at a FREE online seminar for Advanced GET.
Check out the entire feature list for Advanced GET.