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Jan 6th, 2010: Three Bearish Rising Wedges

Posted by pugsma on January 6, 2010

3:10pm:  Added an EOD 60-min, EOD 5-min chart and updated the EOD 15-min chart.  The rising wedge started to try to break down at the end of the day.  However, it’s not decisive yet.  One thing that might be telling is that both the NASDAQ and Russel-2000 appread to have topped and are starting to roll over.  The SP-500 is being propped up here by the strong moves in the financials, energy and metals via a weakening $.  Once those run their couse the SP-500 should strart to colapse a bit.  I’m still looking for a 50 to 75 point (5 to 7.5%) correction in late Jan-Feb.

2:30pm:  I just noticed that on the 15-min chart waves (1), (3) and now (5) have each formed a bearish rising wedge that broke down into waves (2) and (4).  So what will happen with this wave (5) bearish wedge breaks down?  Well, it is wave (5) of 5 of 1 of [5] of P1 or my alternate is wave (5) of 5 of [5] of P1.  So, things could get pretty ugly latter in Jan and Feb.  Stay tuned.  Also, the entire wave 5 structure from the final 1086 low point is nearly a prefect ending diagonal pattern.  Hmmm…

5-min Chart (EOD):

15-min Chart (EOD):

60-min Chart (EOD):

12:40pm: The SP-500 just keeps eeking out new highs.  Today it’s up another point to 1138.17.  This certainly does not look like anything more than the final last few gasps of the wave (5).  I have shown a possible small ending diagonal for the completion of this wave (5) on the 5-min chart below.  But, I’m not very confident it this micro-count.  I’m still thinking a target above 1140 will be hit.

Energy and metal stocks are on fire today.  That is helping hold up the the SP-500.  If the US $ resumes it’s rise, those stocks will be hit and a reaction in the SP-500 should ensue.

5-min Chart (12:40 pm):

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