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Wednesday, 04/22/2009 9:40:36 AM

Wednesday, April 22, 2009 9:40:36 AM

Post# of 541
Look close at the SPX chart and you'll notice a smaller inverse H&S setup with the right inverse shoulder low possibly setting up at 800ish. Being that that is the area of the 50 day and a possible shoulder low, that could spark the next final leg up rather than a fall to 750. So, watch for SPX 800 to be a possible entry point with the target then 200 points off the 875 high rather than the 750 low.

I just can't believe though that the SPX would justify a level over 900 fundamentally. That's why the wave counts here are so important. They are all calling for a next leg down to new lows. But this H&S has everyone talking. If the SPX comes in at an EPS of $60 or less, SPX 950 or more will be extremely overvalued. So, it would be just a technical short squeeze setting up another monster short.

We'll see. Possibly the market is setting up foolish longs in that H&S pattern. Bull trap?

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