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Apr 28th, 2010: Fed Day

Posted by pugsma on April 28, 2010

4:40pm EST:  I’m unsure wheter this C-leg of 4-[5] for the primary count is complete or not.  There is a possible wave-iv contracting triangle playing out for wave-iv of C-4-[5] with wave-v down to 1172 (C=1.62A) for the expanded flat yet to come.  However, a pop up and over 1196/98 tomorrow morning with a close over the 13-EMA EOD, when mean wave 4-[5]-P1 of the primary count is complete and wave 5-[5]-P1 is underway for the primary count.  Wave 5-[5]-P1 projects to 1235 to 1275.  If the market spits the bit at the 1198/1206 area tomorrw and drops hard, it would mean that the alternate count (in red) is in play, where wave (2)-1-[A] rises to 1200/06 and the falls hard for wave (3)-1-[A].

SP-500 15-min Chart (EOD):

3:05pm EST:  Fed remains dovish on future interest rate hike.  Support at 1181 has held.  You can see on this daily candle that the SP-500 is trapped between the 34-day EMA at 1181 and the 13-day EMA at 1198.  The RSI, MACD and Full STO indicators are all bearish.  A break-through and close above or below one of these two key levels will set the near-term direction.  I have the SP-500 in a possible contracting triangle for wave-iv of C of 4-[5], with a wave-v drop towards 1172 yet to come.  However a close above 1196 (20-SMA) or certainly above 1198 (13-day EMA) would change this to a bullish near term count of wave (1)-5-[5] is underway.

Notice how in the Jan correction the SP-500 crashed through the 34-day EMA as if it offered no support. Then the 13-day EMA contained any attempt to move higher for the better part of 3-weeks. This time it’s different, as the 34-day EMA has held as support thus far. A lot of people thinking we are in for a severe correction like Jan. But so far it’s not the same. If we can hold this 1181 area for another day or two, things will get real bullish again, particulary we close over the 13-day EMA.

SP-500 Daily Candles (2:57pm EST):

8:35am EST:  ES Futures dipped a little further overnight to 1176.8 (1180.8 cash) and have since rebounded as high as 1187.2 (1190.2). As I said in yesterday EOD, I count 5-waves down off the 1219.80 high. Wave v of the drop is roughly equal to wave i at 15 and 16 points, respecttively. Primary count has this as the completion of the C-leg down of the A-B-C flat. However if wave-v were to extend to be v=1.62i, then I get 1174 or very near the 1172 C=1.62 target of the expanded flat. The level to watch early today is whether 1190 is breached to the upside in the cash market, if it is then this wave-v down is over. Then we should be looking at the 1200/06 area for wave (1)-5-[5] or in alternate count wave (2)-1-[A] bounce.

SP-500 ES Futures 60-min (8:09am):

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