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Jan 19th, 2009: What to watch for?

Posted by pugsma on January 19, 2010

3:30 pm (CST):  So you throw the bears a little bone and show the alternative bearish count (in red no less) and what happens?  Yep, you got it.  It’s another new high at 1150.44 and another new closing high at 1150.23.  🙂   And guess what, the alternate bearish count has been eliminated for now, sorry bears.   So, the primary count looks to be correct.  We just completed at wave (1) of 5 of [5] up.  I’m looking for a pull-back of about 50% to the 1140 area for wave (2).  The alternative is that the pull-back will be the e-wave of a triangle (rectangle) for wave 4.  This alternative count could theoretically project to a higher high than the primary count, as we would only be starting wave (1) of 5 of [5] off of the 1140 pull-back.  So the primary count is likely to finish in the 1160 to 1165 area, while the alternate count could hit 1170 to 1175 later this month. 

15-min Chart (EOD):

60-min Chart (EOD):

2:05pm (CST):  The SP-500 has pushed up to 1148.67, not quite reaching the old high of 1150.41.  This could be where wave (1) of 5 of [5] of the bullish count ends.  But it could also be the end of wave d of 4 of [5] of an a-b-c-d-e triangle (rectangle) between 1130 and 1150, as Croozer mentioned in the comments section.  The rectangle has an upside target projection of 1170, is similar to my wave 5 of [5] target area of 1160 to 1170.  Either way, I’m looking for a pull-back into the 1138 to 1142 area for the wave (2) or e-leg before the next run higher.  And on the bearish side an aburpt move lower to break 1130 would need to play out indicating we have entered the wave (3) of 1 of A down.  But to be quite honest, the bearish count is losing steam up here at 1148.

15-min Chart (2:05pm):

Jan 19th, 9:35am(CST):  Thus far the SP-500 bounced right up to the target area of 1142 (1144 actually) that I discussed with you last night’s update.  We are now a critical area to watch and see what transpires next.  This could either be near the end of (1) of 5 of [5] to the upside or near the end of (2) of 1 of A to the downside.  I’m biased towards the upside scenario, but we need to keep a close watch on both.

15-min Chart (9:35am):

Jan 18th, 7:30pm:  With the markets closed in the USA today Jan 18th, it’s time to reflect on what has transpired last week and what could be on tap this week.  We had two peaks to 1150 last week.  The first one likely ended wave 3.  Then there was an aggressive sell-off to 1131, followed by a second peak to 1150 and an agressive sell-off to 1131 again.  This can be viewed as a simple a-b-c flat (i.e a=b=c) that ended wave 4.  We are now set for the final 5 wave move up for wave 5 of [5] of P1 with a target of 1160 to 1170 in the next week or two.  Wave (1) up could already have begun late in the day on Friday.

The alternateve (in red on the 15-min chart below) is that second peak of 1150 was actually the wave 5 of [5] of P1 top.  In this case the aggressive 5 wave move to 1131 on Friday was (1) of 1 of A of P2.  And the end of the day bounce was wave (2).  Wave (2) should re-trace to 1140 to 1142 before wave (3) drops down towards the 1115 area in a very agressive sell-off this week.  And the final target for wave 1 of A could be in the 1105 to 1110 area.  Breaking they key levels of 1130 and then 1113 to 1115 will confirm this scenario.

So the key level to watch tomorrow morning is the 1140 to 1142 area.  If the market pushes up Tuesday morning and passes through 1142, then holds the 1131 level on a pull-back, the first scenario with new highs to 1170 maybe in play.

15-min Chart (EOD Jan 15th with options):

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