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Nov 2nd, 2009 – Morning Update

Posted by pugsma on November 2, 2009

Update 10:45 am:  Market continued a strong push upward after the open.  Watch the 1055 area later today to see if the SP-500 can break the upper down channel line.  If this line is broken, then the next target will be the 1070 to 1072 area.  Finally, 1080 is a key back-test area for the broken wedge support from March 2009.

The futures are showing a 5 point (0.5%) pop in the SP-500 this morning.  That would put the SP-500 at about 1040 at the open if it holds.

Now that we got the pull-back to my first target area of about 1030, what’s next:

   1)  First, I would expect a bounce back to the 1060 to 1080 area over this first week of November.
   2)  At this level of about 1070 the market will be at a tipping point.  It could continue upward to new highs;
   3)  or drop back to my 2nd target area of around 1000 to 1010 later next week. (i.e. late June correction)
   4)  Finally, I have a worst case pull back area of abougt 950 in late November the market breaks down.

Potential Correction Magnitudes:
Late June 2009 Correction: 956 to 869 = 87 points or 9.1%

1st Target (Thus Far): 1101 to 1033 = 68 points or 6.2%

2nd Target (1000): 1101 to 1000 = 101 points or 9.2%

3rd Target (950): 1101 to 950 = 151 points or 13.7%

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