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July 1st, 2010: Update 3 – EOD

Posted by pugsma on July 1, 2010

5:30pm EST:  The 38% Fib level of 1010 for the entire P1 move up from 666 to 1220 was tested and held today at 1010.91.  The SP-500 had a nice bounce up to 1029 and closed at 1027.  The close of 1027 was in-between key support at 1019 (from Oct 2009) and 1029 (from Nov 2009).

For the primary count I’m going to lable 1011 has the end of wave 1-[C]-P2 (see the count in white).  We have been searching for this 1-[C] wave end for the past several days with no success.  This move down from 1131 has been very strong and very swift.  The SP-500 is going to have to close above 1029 and then 1041 to convince me this count is correct and we are headed up in wave 2-[C]-P2.  I have targets fow wave 2-[C]-P2 of 1071 (50% trace) and 1083 (62%) trace.  There is a gap at 1072 to 1074 that could be a good target as well.  I expect this 2-[C]-P2 bounce to last a couple weeks and target the July 16th OPEX date for it’s completion.   After that more downward price action should develop in waves 3-[C]-P2 and 5-[C]-P2 going into August and early Sept should drive the SP-500 to a target of 943 (50% retrace of P1).  The [C]=[A] target is 952.  There is a worst case target for this count of 870 (62% retrace of P1) if wave [C]=1.62[A].  Of course many traders will like this 870 target over the 943 target, as it fits better with the large head and shoulders target and the July 2009 low target.

Alternately, I think given the strength and swiftness of the move down from 1131 that this entire move may be the 5-wave [C]-P2 and that is why we are not seeing the 2-[C]-P2 bounce that I have been calling for the past several days.  It does fit with the nasty [C] wave drop I was calling for after the [B]-P2 top at 1131, but the time frame under which it is unfolding is much faster than I predicted.  So, in this alternate count we could have [C]-P2 complete here at 1011 where [C]=0.62[A] and we have P2 which is a 38% fib retrace of P1.   But it’s also possible that we only have completed 3-[C]-P2 today 1011 and after a wave-4 bounce to 1028 (23%) or 1039 (38%), the downward price movement will continue to a target area  975 where wave 5=1.  This would have P2 wrapping up in about another week or two at lower level near the 50% fib retrace of P1.

SP-500 15-min Chart (EOD):


SP-500 60-min Chart (EOD):

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