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Feb 26th, 2010: Range Bound Again?

Posted by pugsma on February 26, 2010

5:30pm EST:  Boring day, so it probably set the stage for an explosive next week.  For the primary count I think we completed (1)-3-[5]-P1 today and will get a small pull-back for (2)-3-[5] to the 1096 area, before (3)-3-[5] gets underway in earnst next week.  (3)-3-[5] should get through the tough resistance at 1115 and 1130.  And 3-[5] could reach for the 1150 area in a short amount of time, before  5-[5] finishes around 1165.

For the alternate count I have decided to move c-[B] out in time to Moday and into the 1115 gap area, as I think iv-c-[B] was the drop down to 1086 yesterday and we are in v-c-[B] now with a burst up towards 1115 coming Monday.  If this alternate count is correct, we will know by a hard reversal signally the start of a nasty [C] leg down to new lows.  The threat of this nasty [C] leg drop is keeping a good amount bulls on the side-lines.

Have a nice weekend.

15-min Chart (EOD):

60-min Chart (EOD):

Daily Chart (EOD):

12:50pm EST:  How about a large symmetrical triangle for Wave [4]?  It should be made up entirely of 3’s, or A-B-C-D-E which is 3-3-3-3-3.   So far it looks pretty good for A-B-C-D all being 3’s.  We might be working on E right now with a touch down at about 1094/96 required before breakining out upward.  One nice thing about a Wave [4] triangle is that it would alternate with the Wave [2] simple Zig-Zag or A-B-C, thus satisifying a key Elliott Wave guideline.  The Wave [5] triangle target would be about 1205 on the SP-500 for Wave [5] of P1.

60-min SP-500 Triangle (12:50pm):

10:20am EST:  On a postive note for the bulls, the 13-day EMA is just about ready to cross back over the 34-day EMA, which would by a buy signal for the SP-500.  Notice the SP-500 bounce off the 1097 area this morning as support.  Also, the Russel-2000 already had this 13 vs 34-day EMA bullish cross early this week.

SP-500 Daily 13 vs 34-day EMA Chart (10:20am):

10:05am EST:  Forgetting the counts for a moment, just take a look at this SP-500 Daily Chart below.   You can see that the SP-500 is once again trapped between support at 1085 and resitance 1110, same as the Nov-Dec 2009 time frame. The bounce off the 20-day SMA at 1086 yesterday indicates that is a strong support level. And of course we have not been able to decisively break back through the 1110 level since the Feb 5th low of 1045. In fact every time the 1105/1110 level is tested, the SP-500 tends to sell-off hard indicating strong resistance there.

So we must be patient and wait it out. I would say that a break of either 1085 or 1110 decisively should bring in a lot of volume and a new directional move in the markets. So be careful around these levels and protect your trade with stops.

SP-500 Daily Candles Chart (10:05am):

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