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Apr 16th, 2010: OPEX Day

Posted by pugsma on April 16, 2010

6:20pm EST:  Is the P1 top in? Maybe or maybe not. My primary count says yes, but I have two alternate counts that say no.

OK, so the SP-500 closed above the 13-day EMA (1190.60) at 1192.13, which is some what bullish going into Monday for a continued bounce. And when I look at the waves off the top, it looks like we only have 3-wave completed on the drop to 1186.77. Hmmm… Then if you take the trend-line from the symmetric triangle wave 4-[5] and extend it out, you can see that today’s low of 1186.77 hit it precisely and then it bounced up to 1197.  This lower yellow trend line has held several times now. And this leaves open the possibility of a new very bullish 2nd alternate count labeled in yellow. What if this drop today was wave (2) of 5-[5]-P1? It retraced 27 points of the 48 points of wave (1), which is right between a 50% and 62% retrace and typical of a wave 2. Very interesting, as the drop today did the trick to reset all of the daily over-bought conditions.  This new alternate count in yellow means that the P1 top is not in, in fact it means the P1 top is likely much higher near the 1275 upper target in late May.

We will know how things shake out right away on Monday, because if the the primary count or 1st alternate (purple) is correct, then there should be a wave-v down to new lows under 1186.77 for both of those counts.  By the way, the 1st alternate count targets are P1 top near 1235 in early to mid-May after testing the 1150 to 1165 area next week.

Thanks for all of the comments today.  There were some great input, ideas and forecasts.   I hope we can keep it going.  Don’t forget to sign up as a “Follwer” of the blog with the link on the right hand colunm.  Have a great weekend !

SP-500 15-min Chart (EOD):

SP-5000 60-min Chart (EOD):

SP-500 Daily Chart (EOD):

2:50pm EST:  This Daily Candle Stick chart of XLF (Financial Stocks) is about as bearish as they come.  Closing under the 13-day EAM of 16.46 could set the stage for a drop to the 15.75 low.

XLF Daily Chandle Stick Chart (2:42pm):

2:30pm EST:  Here’s a look at the Daily Candle Stick chart this afternoon.  Interestingly, it’s not as bearish as the E-wave counts are looking.  Assuming a close above the 13-day EMA of 1191, then things look somewhat bullish for the near term.  This doesn’t mean new high is coming, but that the current bounce may countinue into Monday.  A close below the 13-day EMA opens the door for a test of the 34-day EMA near 1167.

SP-500 Daily Candle Stick Chart (2:22pm):

12:25pm EST:  We now have a new lower lower at 1188.64. This confirms that the near term top is in place at 1213.94. I think we could have a failed wave (5) or the ending diagonal had just about 1 point of over-throw above the 1212.90 maximum calculation. Either way, the top is in for the near term.

We now have to start looking for what comes next on the down side. I going to call this 1214 as the end of wave (5)-5-[5]-P1 of the primary count. Primary Wave 1 (P1) has toppped after an impressive run from 666 to 1214. So we will be working on wave (1) of A of a very large A-B-C correction for P2 (Primary Wave 2) that could retrace 123 (23%) to 208 (38%) points on the SP-500. This large A-B-C correction will likely be a 5-3-5 single Zig-Zag. Wave [A] will have 5 waves. This move down today might just wave (1) of 1 of [A]. It should be wrapping up here around 1188. The we should get a wave (2) bounce back up to about 1200 (50% retrace) early next week.

Alternately, we could have only hit wave 3-[5]-P1 at 1214 yesterday. And we are having the wave 4-[5]-P1 correction back down to 1165 (38% retrace). In this case we have just completed wave-a of an a-b-c zig-zag for this wave 4-[5]. This will mean wave-b is going back up to about 1200 early next and then wave c down to 1165 later next week. This count would allow P1 to make new high in the 1235 to 1275 range somtime in May.

SP-500 15-min Chart (12:05pm):

10:05am EST:  SP-500 has traded down to 1203.96 (38% retrace), which is in my target zone of 1200 to 1205 for wave (4).  The first key is hold 1200 and ultimately it must hold 1191.80 in order to make new wave (5) highs in the near term.  Here is the updated 15-min chart.

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

8:25am EST:  ES Futures dipped down to 1202 (1206 cash).  Looking for wave (4)-5-[5] to trade down to 1200/1205 level today.  There is a rising wedge look to the ES chart, so maybe just more new high in wave (5) just above 1214.  All technical indicators on the daily time frame are wildly over-bought and will need to be reset soon.  You can also see a potential head and shoulders (as SH_Jack has pointed out) as well.  The target of the H&S is about ES 1194 (1198) cash markets.

SP-500 ES Futures 60-min Chart (7:43am):

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