$SPX Chart Analysis for 01.27.2007

Monthly chart shows strong impulse move up to new high. No sell signal in place as of yet.

New high made this week. Move up from October 2006 to current high has been made with divergence. Triple divergence in place.

Possible 5 waves up into new high this week from the 1360.82 low. IF we have 5 waves up, THEN look for a correction back to the .618 fib level, or the 1391.54 to 1400 level. Sellers came out in force the day after the new high was made, creating a bearish engulfing candle. There was weak follow through the following day, with sellers taking the index down to a lower low, to the 34ema, where early buyers stepped back in.