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May 6th, 2010:

Posted by pugsma on May 6, 2010

11:15pm EST:  Here’s the weekly chart going back a decade showing the 2 cyclical bear markets of the past decade and the one cyclical bull in between.  The big question to be answered in the coming years is whether this March 2009 to present time is just another cyclical bull or is it a new secular bull similar to the secular bull run frm the 80’s and 90’s.  The P1 label implies this is a new secular bull market.  P2 can retrace all the way back down to 666 without chaning my view.  So we have a long way to a go in charting out P2, assuming P1 has topped at 1220.

SP-500 Weekly Chart (EOD):

5:25pm EST:  Like the rest of you, I have no idea if the story about the 1 billion share (vs 1 million share) sell order is true or not. However, what we do know right not is that there was a break of the bull channel line at 1140 this afternoon and it triggered massive selling in the market. Whether not the SP-500 would have dropped to 1070 without the mistake, we’ll never know for sure. I personally think the 1120 to 1130 level would have held as support.

Clearly Primary 1 (P1) as I have it labeled has topped at 1220. The wave 1-[5] level of 1112 was breached on the move down to the 1070 low. Thus we have wave 4-[5] overlap. So we have entered P2 and there are broad scale targets on my Daily chart for P2. I have also updated the 60-min chart to show the P1 top. My thinking is that wave (3)-1-[A]-P2 ended today at 1070 and we are in wave (4)-1-[A]-P2 with retrace targets of 1127 (38%) and 1145 (50%) which are typical wave 4 retrace area. We have already hit the 1127 level and closed at 1128. I expect tomorrow to be very volatile trading as this wave (4) settles out.

SP-500 60-min Chart (EOD):

SP-500 Daily Chart (EOD):

9:25am EST:  ES Futures have traded down to 1156 (1159 cash) and have been weakening throughout the morning. A cash market value below 1158.15 will invalidate the primary count that the wave (5)-C-4-[5]-P1 has finished. The alternate count has wave (5)-C droping to at least 1154 and as low as 1140 before completion. I’m flipping the confidence weighting to 30/70 primary/alternate. Key levels on the upside to confirm the push lower is over is a break above 1181.62 and then 1186.32.

ES Futures (9:00am):

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