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Jan 15th, 2010: Correction Continues

Posted by pugsma on January 15, 2010

3:15pm (CST):  The SP-500 definitely picked up a bounce off the 1131.39 low today.   So far just 3-waves up, so it could be still be in a wave iv of c of 4 and we’ll see v of c of 4 down a little more on Tuesday.  For now I’m calling c of 4 complete at 1131.39 and we are in (1) of 5 of [5] of P1 up.  Still targeting 1160 to 1170 for the top of 5 of [5] of P1 later next week or early the week after. 

To the downside, we have to watch the break of 1130 first and then 1113 to officially call the intermediate top up here at 1150.  And from a neutral stand-point, we need to watch to see if a larger triangle wave develops between 1130 and 1150.  In that case we have a d-leg up to 1150 and an e-leg down towards 1130 before a break-out up to 1170.  I have the primary was this simple a-b-c for wave 4, since wave 2 was large complex triangle (rectangle).  And I think we need to resolve this move more quickly if 1150 is going to be taken out.

Also, I’m showing my potential P2 down-side targets on the update daily chart.  Those levels and time framws are very preliminary at this time.  We need to call the top of P1 first and see how aggressive P2 starts down.  P2 could take a lot of different forms and the elapsed time is difficult to determine right now.

Hope you made some $’s this week.  Have a great weekend !

15-min Chart (EOD):

60-min Chart (EOD):

Daily Chart (EOD):

2:55 pm (CST):  Here is a 1-min chart I had made-up yesterday at the end of the day, but did not choose to show on the blog.  Interesting how close it was to what transpired today.  Nothing has been moved on the chart since yesterday and the targets were almost precisely hit today.  This chart shows the potential forecasting power of E-wave plus trendlines and channeling.

1-min Chart (EOD, 1-14-10):

1:50pm (CST):  Well, we got the pull-back to 1140 and then some, all the way down to 1131.39.  As, I mentioned in yesterday morning updates, this wave 4 of [5] could need more time and a larger a-b-c or even an a-b-c-d-e could from between 1130 and 1150.  It looks like to me that we have completed the a-b-c so far.  Wave 5 of [5] could be about to get under way.  A significant break of 1130, means this down term has more near term legs and I would not go long if 1130 breaks.  And a break of 1113 confirms a intermediate top is in place at 1150 and a significant new intermediate down-trend is beginning.

Might not be a bad place to go long for a trade here around 1130.  But again be very nimble and watch it like a hawk if you do go long.  The 10 month up-trend could be losing momentum and the P1 intermediate top is near.  I still would like to see a run to 1160 to 1170 in the next week or so to confirm this top.

15-min Chart (1:50pm):

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