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May 24th, 2010:

Posted by pugsma on May 24, 2010

5:40pm EST:  I’m watching the daily candles for a tradable bottom.  Interesting similarity to the Feb 5th, 2010 lows.  The selling volume decreased today on the red price candle, after the black price reversal candle on Friday.  Very similar to the Feb 5th low.  This daily candle chart plus the VIX closing red and Dr Copper signaling a bottom or turn is near is very interesting.  The SPY after hour price is down about 6 SPX points from the close.  So SPX is trading down around 1067 right now, as some after market traders are expecting a big drop tomorrow.  Will they be right?

SP-500 Daily Candles (EOD):

5:20pm EST:  Just noticed when updating the 60-min chart that 1073 closed right on the Oct 09 to May 10 trendline.

5:10pm EST:   It would apprear from the price action going into the close today, that the correct count is the primary count with wave (5) down underway. More specificially, it looks like wave iii-(5)-[C]-P2 has begun. One thing that bothers me about this count, is that the VIX stayed in the red all day and closed down -1.78 (-4.4%). Typically, when price and VIX both close red, it signals a turn-around in price is coming soon. So we’ll have to watch for clues in the ES Futures and near the open tomorrow. Targets for this wave (5) range from 1053 { (5)=0.62(1) }, 1032 { (5)=(1) }, 1021 { [C]=[A] } to 1010 { 38% of P1 }. The 1053 target is probably the most interesting, as it would set a slightly lower low below 1056 and likely set-up some positive divergence on the daily oscillators.

The alternate count is still valid as long as 1056 holds as the low. I have the alternate count as wave ii-(1)-1-[1]-P3 with a 62% retrace of wave i-(1) at 1069. This alternate count still sports the inverse head and shoulders (double left and right shoulders) with a neckline at 1090 and a target of 1124.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

1:05pm EST:  Is Dr Copper forecasting a trend change for the larger markets?  Over the past two days, Dr Copper has broken out of it’s recent consolidation lower range.  Copper needs to continue to hold above $3.05 to maintain bullish momentum.

Copper 60-min Chart (12:55pm):

12:10am EST:  Very intersting area here around the 1090 inverse head and shoulders neckline.  If the SP-500 is going to set a new low under 1056, it needs to get busy. Otherwise above 1090 things start to get more bullish near term with a potential target near 1124.  The VIX has been down 6 to 8% all morning with the SP-500 in the red., which is a bullish indicator.  The 50-week SMA support at 1072 mentioned over the weekend looks to be holding up as support thus far.

SP-500 15-min Chart (11:45am):

8:30am EST:  ES Futures have traded down to 1170 (1173 cash) this morning. Still well above the Friday AM low of 1153 (1156 cash). The primary count is that the SP-500 is in wave (4)-[C]-P2, possibily a triangle. Targets for (5)-[C]-P2 are down in the 1032 to 1010 area, but any new low below 1056 is a valid wave (5) completion. The alternate count is wave ii-(1)-1-[1]-P3, which needs to maintain above the 1056 Friday AM low. A move above 1115 in the cash market is the key to declaring the current wave down over.

SP-500 ES Futures (7:56am):

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