May 11th, 2010:
Posted by pugsma on May 11, 2010
5:45pm EST: All the conditions were met for 5-waves up on the primary count wave-v-C-[B]-P2. The 1170 level was hit, which is inside the resistance band of 1168 that we been watching. And there was rejection of prices at cluster of moving averages (13-day EMA, 34-day EMA, and 50-day SMA). Thus the primary count is that we have started down in wave [C]-P2, namely wave (1)-[C]-P2 The first target is to break the 1129.32 level (wave i-C-[B]-P2 peak) and head towards the gap support of 1121 go 1110. One cavet to this primary count is a possible consolidation triangle that could form between 1150 and 1170 for wave-iv-C-[B]-P2 if prices decide they need one more puch higher. The triangle target would be the 1190 area.
The alternate count is that wave (5)-1-[1]-P3 is completed and we are headed down for a retrace in wave 2-[1]-P3. The retrace target is the 1110/21 gap area or a 50% retrace. This alternate count is subject to same possibility of the wave (4)-1-[1]-P3 consolidation triangle if price decide that one more push higher is needed. Target is the same 1190 area.
What will separate the two counts is what happens once the 1110/21 gap area is reached. The primary count will continue to new lows below 1067 fo the completion of [C]-P2 and the alternate count will head to new highs above 1220 for the wave 3-[1]-P3.
SP-500 15-min Chart (EOD):
SP-500 60-min Chart (EOD):
12:40pm EST: Here is the daily candle stick chart showing resistance in the 1168 to 1177 area. We have our new high for wave-v-C-[B]-P2 as expected. So far we reach the 1168.04 level, which is the start of a key resistance area. Going back to my comments from the EOD yesterday, I have the first target for this wave-v at 1174 (v=0.62i), a second target at 1182 (78% retrace), and third target at 1190 (v=i). Let’s see how far this wave wants to run up.
SP-500 Daily Candle Chart (12.27am):
11:15am EST: There has been some good discussion the last few days on trend change models vs E-wave analysis. The trend change model I like to use the the 13-day vs 34-day EMA cross-over. As long as the 13-day EMA remains on top of the 34-day, we are in a up trend. When it crosses under we are in a down trend. The last bull-cross was on Mar 1st, 2010. And we just got a bear-cross on the May 6th, 2010. This is one reason I’m still favoring the primary count that we are still in P2 as the May 6th bear-cross indicated a trend change. If this [B]-P2 wave dies out in this 1164 to 1182 area in the next fews days, then we should not get a new bull-cross and may head back down in the [C]-P2 wave to new lows below 1067 (First target is 1010). Also, remaining below the 13-day EMA after the bear-cross is very typical behavior. Right now the 13-day EMA is around 1170 and falling. However, if we can get above 1170 and more importanly above 1177 and remain there for a few days to week, then a bull-cross will likely be triggered and my alternate count will start to take over.
SP-500 Daily 13-day vs 34-day EMA Cross-Over Trend Model (11:15am):
8:30am EST: ES Futures have traded down to 1040.50 (1143.30 cash equiv) overnight. It looks like wave-iv-C-[B]-P2 as not complete and yesterday’s drop to 1148 was only wave-a of iv. Then the late day push to 1160 was wave-b of iv and now we are working on wave-c of iv down. The key level to watch for the primary count up to continue upward is the wave-i high 1129.32. If we trade above this level then wave-v-C-[B]-P2 can still reach more targert area of 1174 to 1190. For the alternate count the key level to stay above is 1137.24 for wave (4)-1-[1]-P3 and then wave (5)-1-[1]-P3 can continue upward.
SP-500 ES Futures 60-min Chart (7:25am):
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