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Apr 12th, 2010: Next Intermediate Top is Near

Posted by pugsma on April 12, 2010

5:25pm EST:  Following-up on the 3:45pm post, I have added a new alternate count (in red) that has the 1199 high today at the end of wave 3-[5] and there should be a 38% retrace for wave 4-[5] down to 1156.  This would relieve the overbought conditions on the daily chart and set the stage for a charge towards 1257 in May and June.  The interesting thing about this new count, is that the SP-500 would stay below my middle channel line off the March 09 low of 666.  So far during the rise up from the Feb 5th, 2010 low of 1045, the SP-500 has been respecting this middle channel line.  This new count is my 2nd most likely count, with my primary count (in white) remaining that the SP-500 continues to push towards 1235 in wave (3)-5-[5] that should complete before the end of April.  There is a 2nd alternate (in purple) that shows an ending diagonal pattern with (5)-5-[5]-P1 complete today at 1199.20.  This count is ruled out if the level of 1201.03 is broken.

SP-500 60-min Chart (EOD):

3:45pm EST:  Take a look at this daily SP-500 chart for the past 3-years and tell me if you think it’s a good idea to be buying into the SP-500 at this 1200 level or it’s better to wait for next nice size (50 to 70 point) pull-back to buy in again? 1200 is the July 08 low and it sure looks like we should see a pull-back form this area, just like the 100 point pull-back we got from the 1130/50 (Sept 08 low) area on January 19th, 2010. The price today at 1199 is nearly 70 points above the 50-day SMA at 1131; the largest it’s been during the run up off the March 09 low of 666. Also, the sizable pull-backs have been happening about every 3 months, so one is due soon. The RSI on the daily time frame is the most protracted overbought condition since the Aug-Oct 07 1575 peak !!! It’s time for a reset of the oscillators. Keep your stops tight on any profitable long positions.  1260 (March 08 low) looks like the next higher target after any sizable pull-back. So maybe this run from 1086 to 1199 was wave 3-[5] and we get the 4-[5] down to about 1130/50, before 5-[5] takes the SP-500 to the final P1 target of 1260 in May/June. Just another alternative to keep in mind. 

SP-500 Daily Candle Stick Chart (Last 3-years):

8:00am EST:   ES Futues have pulled back inside the upper channel line.  The key area to watch today in the cash market is 1192.  A break below 1192 could mean that wave i-(3) ended on Friday at 1195 and a 50% to 62% (1181 to 1185) wave ii-(3) is underway.  Staying over 1192, would mean that wave iii-(3) is likely underway.

SP-500 ES Future 60-min Chart (7:22am):

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