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Apr 26th, 2010:

Posted by pugsma on April 26, 2010

4:30pm:  Well we had a bearish Monday.  This has been about as rare as hens teeth since the March 2009 low.  Could it be telling us something about the changing trend?  We’ll have to keep an watchful eye on this weeks price action to find out.

For the primary count, wave iv-(3) is pushing the limit of iv-i overlap as it touched 1211.07 which is just above the wave i-(3) high of 1210.99 (see 15-min chart). And the SP-500 closed at 1212.05, so it will take a flat or gap open to save this primary count as it’s currently labeled. If 1210.99 is violated in the morning, then I will likely move the completion of (3) to the 1219.80 high from today. This would be mean the SP-500 has already entered the final Ending Diagonal as wave (4) will have overlapped (1) by crossing under 1213.92 late today. Wave (4) could then drop to as low as the lower green channel line near 1200/05 tomorrow, before wave (5)-5-[5]-P1 completes the ED above 1220 later this week. That will become the new primary count if 1210.99 is taken out tomorrow.

The new alternate count (purple) for the expanded flat is very much in-play if 1200 and lower green channel line support it broken. The wave B of this flat would be complete today at 1219.80 and wave i of the 5-wave C-leg down could have begun late this afternoon. The target for this C-leg is 1172 based on C=1.62A. The B-leg measured out very well as 1.22A, almost hitting the 1221 predicted target. There is a big-time negative divergence to the daily RSI at today’s new SP-500 price high. This divergence could fore-tell a sudden drop that is coming. The FOMC meeting announcement on Wed (4-28) could be the trigger for this alternate count to play out. If this alternate count plays out, it could ultimately lead to higher highs above 1220 later in May or June (see the 60-min chart).  Or it could be the start of P2 and P1 will have ended here near 1220.  We’ll have to watch the wave action closely this week for clues.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

4-26-10, 8:25am:  ES hit 1216.70 (1220.70 cash equiv) overnight.  I’m seeing a possible rising wedge on the ES chart with a target near 1218/1220 (1122/1224 cash equiv) today.

4-25-10, 10:20pm:  Late evening, ES Futures are hitting a new recovery high of 1215 (1219 cash) after a quick back-test of the 1210 (1214) break-out from  Friday.  Staying above 1210 (1214) is a key for continuaon to highs early tomorrow.

ES Futures 60-min Chart (4-25, 10:01pm):

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