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May 20th, 2010:

Posted by pugsma on May 20, 2010

5:30pm EST:  For the primary, I have the count as wave-v-(3)-[C]-P2. Targets for wave-v-(3) are 1065 (v=0.62i) and 1047 (v=i). Next I expect a wave (4) bounce to about 1085 (38% retrace from 1065) or 1074 (38% retrace from 1047). Finally, there should be wave (5) down to about 1026 (wave(5)=(1)). Other levels of interest are 1010 (38% retreace of P1) and 1021 (where C=A). I think P2 will complete late next week or in early June.  As the alternate (purple), I have the count as wave (5)-[C]-P2 under way late today and the target is the 1047 to 1065 area for completion of P2 (may as early as tomorrow).

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

SP-500 Daily Chart (EOD):

2:15pm EST:  If the Oct-09 to May-10 support line holds and the 1067 flash crash low is not taken out, then one alternate that is on the table is that P2 traced out a 3-3-5, A-B-C flat. The flash crash drop from 1220 to 1067 can be counted as a 3-wave, the bounce up to 1174 can be counted as a 3-wave, and the drop from 1174 to 1073 can be counted as 5-wave. This would mean some more consolidation here above 1067 and then the next bull run higher. We’ll have to watch 1115 on any upside move.

1:30pm EST:  SP-500 bounced off the support line (yellow) going back to early Oct 2009. This support line held the Nov-09 drop, the Feb-10 drop and thus far the May-10 drop.

SP-500 60-min Chart (1:20pm):

SP-500 Daily Chart (1:20pm):

10:35am EST:   SP-500 has traded down to 1078. I’ve gone back to my original labels for the wave (1)-[C]-P2 ending at 1115, then (2)-[C]-P2 at 1150 and now we are in (3)-[C]-P2. There are a couple ways to count (3)-[C] off of 1150. We could be either in iii-(3) or v-(3). The large gap down would argue for iii-(3). If we are in iii-(3), then there is lower prices yet to come. Since wave i-(3) was 1150 to 1100 (50 points), wave iii-(3) would be 1.62*i = 81 points for a target of 1119-81=1038. If we are in wave v-(3), then it should end aournd wave v=i or 1069. Any bounce for wave (4)-[C] should stay below 1115 to keep the down wave headed lower.

SP-500 15-min Chart (10:30am):

8:20am EST:  ES Futures have traded all the way down to 1089 (1091) in the cash market which is a new low since the May 6th flash crash to 1067. Obviously, this is a very bearish overnight outcome. The fallening wedge is still valid to about 1190 in the cash market and it looks like the futures bounced up from this area.

We must remember that the primary count is that we are in wave [C]-P2 with an ultimate target down to 1010 to 1020. I have been trying to determine if we are still in (1)-[C] or (3)-[C]. The futures action (if it holds up in the cash market today) may have made that decision for us. If closes under 1100 today, then the alternate bullish near count will be eliminated.

SP-500 ES Futures 60-min Chart (7:54am):

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