Using the top on 4/26/10 and the 'Flash Crash' lows, and then the low of June 8th, I used these dates and prices as a Start-A-C pattern for the $SPX. Then building a spreadsheet with the highs and lows since the 8th, I get the chart above. Now, in fairness, I thought today would be a down day, and so far, it has not been. I saw negative divergence in some indicators and we were near the 'return trendline' shown in the diagram above as a dashed line. Refer to web articles, Google search 'return trendline'. The foundation for the channel I am creating is the brown trendline along the bottom of the chart. It is precomputed from the A-B-C pattern I have mentioned. Some inaccuracy can be assumed because of the short time scales more appropriate to intraday calculations, and I am doing this with daily data, which puts some obvious limits on fidelity. That said, we are only at less than a .200 node value and most moves get closer to .500 before they terminate. I still think we are near a minor top, (I thought that after the close Friday and over the weekend, though) but the real top I still think is several days away...Relative to the early node values we are at, I think there is time for this rally to build a 'right shoulder' to the April 26 top....
P.S. this chart looks way smoother than an intraday chart of the same time frame because I'm using only the highs and lows of those days...
P.P.S. Those of you familiar with the Math I'm using can build the same spreadsheet. The values I used are here:
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