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Feb 18th, 2010: Overdue for a Drop?

Posted by pugsma on February 18, 2010

5:40pm EST:  Well, I called for one more pop up yesterday and today we got a 7 point (0.66%) pop to close at 1106.75.  The intra-day high was 1108.24.   The 50-day SMA was at 1108.56 today.  And 1110 is a 62% re-trace of the fall from the 1150 peak to the 1045 low.   Thus, there are several reasons besides the wave count for the market to start to pull-back from this area.

For the primary count, I see this1108  area as the peak of wave (3)-1-[5]-P1.  I’m looking for a wave (4) drop back about 38% of wave (3) to the 1090/92 area.  And I think if that area holds, wave (5) could reach the 1115 to 1125 area early next week.  Wave 2-[5]-P2 should then pull-back to about 1085/95 area late Feb to early March.  Notice the bearish rising wedge in yellow on the 5 and 15-min charts.  This is signaling a drop is near.

For the alternate count, we have completed wave c-[B]-P2 at a 62% retracement point.  Now wave [C]-P2 is about to get underway which would be very bearish and could take the SP-500 to new lows below 1045.  There are three targets for [C]-P2:  [C]=0.62[A]=>1043, [C]=[A]=>1003, and [C]=1.62[A]=>938.

5-min Chart (EOD):

15-min Chart (EOD):

60-min Chart (EOD):

Daily Chart (EOD):

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