May 9th, 2010: Gap Up Monday?
Posted by pugsma on May 10, 2010
10:11pm EST: ES Futures have traded up to 1137 (1140 cash equivalent). A value above 1126 (1129) invalidates the contracting triangle scenario. My thinking tonight is that 1067 maybe have been the wave [A]-P2 low for the primary count. And we are an A-B-C up for the [B] wave of P2. The move on Friday May 7th may have been the i-ii of C of [B] and tomorrow will be wave iii of C of [B]. This [B] leg could be very interesting. At a minimum it should retest the broken P1 lower channel line at 1142 (a 50% retrace of [A]) or even back toward the 1168 pivot (62% retrace). However, [B] legs can be very tricky to map and can retrace 100% over even more of the [A] leg if it’s a flat or expanded flat. So if the bulls can gap the SP-500 open above 1129 tomorrow in the cash market, then C of [B] leg up will be underway and the let the short covering rally begin. Most likely this [B] of P2 rally will last into options expiration on May 21st.
SP-500 ES Futures 4-min (9:57pm):
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