SPY Update … (by Leaf_West)

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Best 3-day move in a while … this type of thrust tells me that we are in a Wave 3 move.  Next to come is a 4th wave pull-back and then a final wave 5 push to most likely new highs for this move.

SPY_June 30, 2011_15min
I believe that we are at or near the end of wave 3 … what makes me think that is the slightly different pull-back that we experienced yesterday afternoon.  The pull-back was the strongest we have seen since the move started Monday morning.  A wave 4 pull-back should go at least to the 25% retracement area and most likely the 38.2% / 50% areas.

I will be looking to be flat in my trading accounts this morning after pruning some smallish overnight positions.  If the set-up is good I will try and short the wave 4 move, but if not I will be patient and wait for the end of wave 4, to play the final wave 5 push.  Don't kid yourselves, the easiest most profitable part of this move is over (wave 3).

Cheers … Leaf_West