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Dec 4th, 2009: Mid-Day Update – Head Fake?

Posted by pugsma on December 4, 2009

Quite the interesting day.  I waited to post this until things settled down a bit after this mornings wild swing from 1099 to 1119 and back down to 1096 !

It looks like yesterday’s drop to 1099 can be explained via an expanded flat wave iv off the 1113 wave iii peak.  In an expanded flat the b-leg is roughly 1.2*a and the c-leg is 1.6*a.  So, the b-leg shot up to 1115 and the c-leg down to 1099 and it fits the math perfectly.  This mornings rapid rise could have been wave v up to 1119 peak for the completion of 5 of [5] of P1.  And so far today we have had nice 1-2, 1-2 impulse lower off the 1119 peak.  And I think there is much more down-side to come.

Am I 100% sure of this?  No.  I about 75% confident that we are headed down near term.  Never-the-less even if there is some small upside, the market is in the topping process.  Watch for a close below 1113 today.  Close below 1113 keep me bearish near term.  And a close below 1098 and I’m extremely bearish.  And any close over 1113 and I’m bullish again for a short time.

1-min Chart:

15-min Chart:

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