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May 13th, 2010: Still Wedging

Posted by pugsma on May 13, 2010

9:20pm EST:  Here is a quick look at the Daily 13-day vs 34-day EMA chart with trendlines since the July 2009 low of 869.  You can see that the SP-500 is trading in the mid-channel and needs to hold the 1150 support in order to stay there.  The move higher so far has been rejected by the 34-day EMA at 1173 and the bear-cross is still in affect from May 6th.  I have also attached the standard Daily Chart. You can see the lower Elliott Wave P1 channel trend line (white) comes from the March 2009 low of 666 and sits at around 1150 tomorrow.  I think 1147/50 is very important to hold tomorrow for the bulls to keep control.

SP-500 Daily13-day vs 34-day EMA Cross-over Chart (EOD):

SP-500 Daily Chart (EOD):

4:45pm EST:  The bearish rising wedge broke down, as I favored from my morning reports. Also the 34-day and EMA and 50-day SMA held as resistance at the 1173 level. The minimum target for the rising wedge break down is back to the base from which it formed or around 1147. When we get to the 1147/50 area, there will be some good support as shown on my 15-min chart. The longer term lower P1 channel line will be in this 1150 area tomorrow. If you favor the alternate count that we are in P3 headed to new highs, then this 1147/50 area (23% retrace since 1067 low) would be a good spot for a wave (4)-1-[1]-P3 to end and then we’ll see more upside going into OPEX week for the continuation of (5)-1-[1]-P3. If you favor the primary count, then the move lower in wave (1)-[C]-P2 should pick up steam and head toward the 1120/29 area near-term. Also, for the alternate count if we consider that wave 1-[1]-P3 ened at 1173.56 today, then wave 2-[1]-P3 down would also target this 1120/33 area in a 38% to 50% fib retrace.

So in summary watch for a bounce at 1147/50 tomorrow to see of this wave up will extend or not. If a bounce comes, then it could signal new highs above 1173.52 going into next week (OPEX). If it breaks through this 1147/50 area, then we are lookinng at 1120/33 for both primary and alternate counts.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

10:20am EST:  The SP-500 is a tipping point.  If the 1177 resistance is broken to the upside, then the channel that has developed since the May 6th low of 1067 does support levels between 1190 and 1230 by OPEX Friday 21st.  I slightly favor the 1177 resistance to hold and break-down of the bearish rising wedge to lead to levels around 1147/50.  But if the bulls can break-through 1177 and then 1182, the short covering and popped stops means the upside potential for next week is very large.

SP-500 15-min Chart (10:15am):

8:32am EST:  ES Futures traded up to 1174.50 (1177.50 cash) and tested the 1177 long term pivot.  Still in a wedge, but if 1177 is breached to the upside it could become a channel and extend upward.  First upside targets are 1182 to 1190.  To the downside we are looking for the lower wedge line to break-down and a drop to about 1147 should occur.

SP-500 ES Future 60-min Chart (8:01am):

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