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Nov 20th, 2009: EOD Charts – Which Way is Up?

Posted by pugsma on November 20, 2009

Well, today the market did not tip it’s hand any further.  It’s still very unclear what the next move will be.  I spent a good amount of time today looking at the charts, and I have decided that the alternate count is going to become my primary.  Why?

  • It looks like there was a missing 5th wave on the last move up.
  • There was no touch on the upper green channel line.
  • The past couple of days may have had some Options Expiration (OPEX) influence to the down side with SPY Max Pain at 108 = about 1080 SP-500.
  • The SP-500 is still within (or very near) the March Rising Wedge trendl ine and very close to re-gaining the Bear Trend Line.

If you look the move between the 1105 peak and today’s low at 1086, it can be counted as 3-3-5 expanded flat (B=1.2A, C=1.6A).  This would expain the peak at 1113 and then sudden drop the past two days.  So, I’m expecting this expanded flat to be end of the 4th wave, and there is a 5th wave up yet to come.  This 5th wave could take the SP-500 up to about 1140 and an upper green channel line touch in the first two weeks of December.  This would be the end of Wave [5] and the end of the P1.  The market would then go into a resting and colidation parttern for P2 in early 1020.

The alternate count now becomes that the large 3-3-5 running flat that began off the 1101 Wave [3] peak continues with the c-leg down to about 1050 for the end of Wave [4].  This alternate count matches up with a potential head & shoulders formation mentioned in this mornings update.  This drop to 1050 for Wave [4] would also all for some potentially higher highs to be sent in early 2010 in the 1200 to 1230 area.

Both the 20-day and 50-day SMA’s are in the 1070’s now to provide strong support.   And there is great chance the SP-500 witl close above the Montly 20-period SMA at 1040.  This is a very bullish sign and has signaled the beginning cyclical bull markets that last for several years.

15-min Chart:

60-min Chart:
Daily Chart:

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