Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.


|Includes:SPDR S&P 500 Trust ETF (SPY)

On Feb 10th, I posted this SPY yearly chart.

At the time it was my belief that we were in a 3rd wave, minor five, and that the END OF THIS MOVE WILL BE SOMETIME THE WEEK ENDING FEB 24TH, or shortly after.

I put out the possibility that SPY could trend down into this FIB TIME. Previous years the index moved lower into the 13 week Fib time frame; we had to consider this a possibility.

We know now, despite the loss of positive momentum into this 13th week, noted on RSI<5> and <2>, the index has been able to grind higher.

We can now count 5 minor waves up on the daily; lending credence to the top call for week ending Feb 24th.

Drawing a resistance line, which marks all previous tops in this minor wave 5, allows for an additional 10 points of upside in the SPX; into R1 at 1376.

Previous pull backs within this up wave have not exceeded 20 points-the index must move lower greater then 20 points and 2 days, to confirm a wave 4.

Our immediate near term downside targets are marked at the pivot: 1301 and resistance <1> 1270.

I have previously noted, the expected time for completion of wave 4 is 4.7 weeks.

In forecasting, we always have to assume alternatives-here is a weekly view.

Notice R1 gets us all the way to 1393, however our downside targets are much more bearish: 1234, 1098, 938. These are a probability, but more likely summertime pullback targets.

Notice weekly RSI<2> is almost 100. Hard to go much higher then that!


FIB week 13 is completed-ending Feb 24th. We are able to count 5 minor waves, suggesting a top of some sort.

R1 target of 1376 and top resistance line allows for an additional 10 points higher to complete this move. RSI divergence indicators however, suggest a beginning to wave 4 can come at any time-day-hour.

We expect at least a 70-100 point wave 4 decline, possibly more; completing within 4.7 weeks-give or take a few days.

Monday Pending home sales at 10:00. On Tuesday Durable goods orders, Case-Shiller and Consumer confidence. Wednesday Q4 GDP, the Chicago PMI, and the FED's beige book. On Thursday, weekly Jobless claims, Personal income/spending, PCE prices, ISM manufacturing, Construction spending, and monthly Auto sales. On Tuesday, FED governor Duke testifies before the Senate on Housing. Then on Wednesday, FED chairman Bernanke testifies before Congress on Monetary policy.

I expect all this data to be the usual web of lies and deceit, in an attempt to continue multiple expansion.

Tim Kathlina

Stocks: SPY