SPX 500 - Now That Was Some GCM

Now that was some Green Candle Monday [ GCM ] for the SPX 500 - NYSE  Index .The Price rise continued, as expected, with the retracement off the "Zone" . The "Zone" [ 1292.66 - 1292.18 ] is comprised of the termination  level of the first leg up ( EW 1 ? ) from the low of 1074.77  and several Fibonacci levels. 

On 5/18/12 the "Zone" was tested by the drop in the Index Price to 1291.98 . there was a successful reversal  with Index Price  retracing back to 1295.12 . However, keep in mind that this level will be tested again and will eventually fail.

For now, the item of importance is the retracement from 1291.18 . The intraday High of 1316.39 tested the ascending Fibonacci level at 1315.99 [ L2AF764 ] .  The Price eventually dropped back to and Closed at 1315.99 leaving the price just above the Fibonacci level [ L2AF618 ] at 1315.64 . If the retracement continues along the expected path we should eventually see the levels 1318.37 and 1321.09 tested. Caution should be exercised if and when the Price reaches 1321 as the Fibonacci level coincides with a descending upper trend line of the short term descending channel. IF  that level is cleared then the Price could rise to test 1339 +/- .

The Indicators on the 60 minute chart  known as the Birds [ www.theidiotandthemoon.com ] which are the CCI 6 , CCI 20 and CCI 50 are all above the -100 level indicating a BUY in this time period .  However, on the Daily  chart only the Canary [ CCI 6 ] is above -100 with the other Birds rising but still far below the -100 level.

On a daily basis both the EMA 5 / WMA 13 and the Idiot [ www.theidiotandthemoon.com ]  are on a SELL so caution is the order of the day . One needs to keep this retracement  or "rally" , as some might call it,  in perspective . It is going to be a short lived retracement and the reversal might be swift and vicious.

Enjoy the retracement now because those Storm Clouds are going to return  and wash out the retracement.