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June 24th, 2010: Update 4 – Intra-day Mid-Day

Posted by pugsma on June 24, 2010

1:15pm EST:  I’m completely removing my primary count.  I don’t believe the 3-3-5 flat scenario for P2 has much of a chance with the price action the past week.  In other words I don’t see a test of the 1220 high coming before a new low below 1040.78. 

I think the evidence is mounting the the aggressive move down from 1220  to 1041 in May was a 5-wave move, which I will label [A]-P2.  The corrective move from 1041 to 1131 was an A-B-C for [B]-P2.  The retrace for the [B] was precisely 50%, which fits with a B-wave.  And now we have begun a 5-wave [C]-P2 that should target the 952 area if [C]=[A], which it usually does.  I believe the move down off 1131 counts best as a 5-wave impulse for wave 1-[C] and is at or near it’s completion in the 1075 area.  I’m looking for wave 2-[C]  bounce to target a 50% (1103) to 62%(1110) retracement before all heck breaks loose in wave 3-[C].  Wave 3-[C] should  bust through the 1040 support and bring in a lot more sellers.  I’m looking for the back-test of the 1103 to 1110 area over the next week or two as he Q2 ends and earnings news comings out.

The 1st and only alternate count remains unchanged.  It’s that the 1042 low in early June was a truncated 5th wave of a leading diagonal (LD) for wave [A]-P2.  In this LD scenario [B]-P2 should retrace to between 62% (1152) and 785 (1180).   The rise to 1131 would be A-[B], the drop to 1075 would be B-[B] and now we would be looking for rise up to 1152 to 1180 over the next few weeks.  This is possible with good Q2 earnings news.  But the SP-500 is going to need to break back above the 200-day SMA at 1111 very soon to prevent the primary count from playing out.  Even though this count recovers to the 1152/1180 area, it still ends up in the same place at around 950 in the early fall (Sept/Oct).

The key now to determining the correct count will be to watch how the SP-500 reacts at the 1100 to 1110 area on the next bounce higher.

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=735389ee-0b71-4f27-9e63-466233fbb721

SP-500 15-min chart (1:00pm):

SP500 60-in chart (1:00pm):

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