S&P 500 - Nov 11, 2008

charts courtesy of stockcharts.com

Daily Volume picked up a bit on the downside and breadth was a bit to the negative. More new lows were made – again.

This count is tracing quite well as market seems to be the playground of traders, for it to stay valid the range should hold for at least one more leg up, and that would make a triangle. If it continues to chop, then it morphs into an abc-x pattern, if it breaks decisively before completion, up or down, then we are dealing with a different wave pattern. Sounds complex and indeterministic? Welcome to the world of corrective waves!

After a burst down at the open, intraday volume tapered on the descent, and then, around 2:00 pm, the real battle started between bulls and bears, S&P briefly made it to upside of 912 level, but was forcefully knocked back. Neither bulls, nor bears could really win the close, and market stayed in range.

The longer the index stays in range, the more forceful the move out if the range may be. To the upside, 912 is important, to the downside 850 is a must hold. These levels are not absolute, I usually give them +/- a few points to play.

It remains a market that rewards traders with discipline and quick fingers.