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Mar 3rd, 2010: Extension?

Posted by pugsma on March 3, 2010

4:15pm EST:  It’s appropriate that I titled today’s blog post “Extension”, as the key to my thinking now is whether or not wave (5)-1-[5] extends higher that 1126?  A close today over 1115 continues to be bullsih for a possible extension.  This close is also above the Inverse Head and Shoulders neckline which targets the 1165 area.

OK, we have a pretty good looking top of wave (5)-1-[5] at 1126.  It fits with a lot of things like the 78% re-trace from 1150-1045 and the wave v=i for wave (5).  However, the pull-back so far as only been to 1117, which is a 23% re-trace of 1086 to 1126.  So it already has hit the minimum retrace of a wave 2 and has since bounced a bit.  We will need to watch to see, if key support at 1108/1112 holds, before deciding if wave (5)-1-[5] wants to extend or not. 

I have re-thought what my turquoise count is all about.  It’s not a wave 3-[5] as I have been protraying it the last few days.  That would be rushing this next bull market wave [5] phase way too much.  I expect this wave [5] leg of the bull market to take several months and last into the summer.  So what is it then?  The ultra-bullsih torquise count is a wave (5)-1-[5] extension.  As I stated above, the wave (5)-1-[5] reaching 1126 could be the end of this 1st major bull move off the Feb 5th 1045 low.  And now we are ready for a corrective wave 2-[5] back down towards 1075/85 over the next couple of weeks.  However, this wave (5)-1-[5] may want to extend and it could very easy extend above 1126 into the 1130’s, 1140’s and even 1150’s by early next week.  As long as the lower blue channel line is not taken out (1108 to 1112 area currently), then the wave (5) extention is on the table.  As soon as that area cracks, maybe tomorrow, then it’s time to give up on wave (5)-1-[5] and start playing wave 2-[5] back down towards 1075/85.  Also, if wave (5)-1-[5] does extend towards 1150, then the depth of the wave 2-[5] pull-back will at higher targets closer to 1100 and of course further out in time.

15-min SP-500 Chart (EOD):

60-min SP-500 Chart (EOD):

Daily SP-500 Chart (EOD):

11:15am EST:   Daily Candles Chart showing 13-day EMA resistance now turned support after the bullish cross above the 34-day EMA.

Daily SP-500 Candles Chart (11:15am):

10:05am EST:  It’s looking like the this wave up off 1086, wants to continue to extend.  The SP-500 has hit a higher high at 1023.89 today.  The Russel-2000 has all set a new 2010 high today.  I think the 1127 area will get tested today.

15-min SP-500 Chart (10:00am):

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