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Feb 1st, 2010: A Moderate Bounce

Posted by pugsma on February 1, 2010

10:30 EST:  I continue to believe that this chart is one of the most simple and importate intermediate charts to watch.  There are no wave lables on the daily chart below.  Just the all important high/lows, trendlines and moving averages.  Pay particular attention the cross-over of 13-day EMA with the 34-day EMA that occured 3 trading days ago.  This is a key indicator of intermediate term weakness and selling pressure.  The 34-day EMA should now start to act as resitance to maintain the continued fall.  The 34-day is currenlty at 1111 and falling.  Also notice the key previous low of 1083 that was busted last Thurs/Fri down to the 1071 level so far.  Once a lower low is made, often times the next lower low will be tested.  In this case, it’s the 1029 low from late October 2009 that is next up.  And take special notice that the 200-day SMA (at 1014 today) will meet up with the 1029 area in mid-to-late Feb.  This is a tastey first target area for this correcton wave down to tag before finding significant support and start to reverse.  And in the case of the alternate count on the 60-min chart, it’s the most this correcton can retrace if it’s a wave 2 of [5] which in term would indicate P1 could make new highs later this summer.  So 1029 holds the key to this continued cyclical bull run.

SP-500 Daily 13-34 EMA (EOD):

4:30pm EST:   Most likely scenario is that we are in the B leg up (see 15-min chart).  Ultimate target for this B is the 1100 to 1120 area.  On the 5-min chart I show some additional scenarios.  One is that the ending diagonal for v of (5) of A is not yet complete and we will have new low below 1071.59 in the 1065 area tomorrow.  This is not real likely, with the close over the 1085 area today.

Another scenario to look out for (my alternate count) is that the B-leg is already done at 1103 and we are in the (2) up of C down.  In which case the ultimate target of (5) of C is in the 1030 to 1040.  And the the (3) of C could begin at anytime in a swift move down.

5-min Chart (EOD):

15-min Chart (EOD):

60-min Chart (EOD):

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