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July 6th, 2010: Update 5 – EOD

Posted by pugsma on July 6, 2010

5:05pm EST:  McClellan Oscillator did come in higher today after the close and it confirms the positive divergence with the SP-500 price low from July 1st.  Notice how this same indicator predicted the Nov 5th, 2009 and Feb 5th price lows and the subsequent intermediate (few months) trend change.  Notice, the larger the correction, the longer it took to acheive the McClellan Oscillator positive divergence “buy” signal indicator.

SP-500 Daily Candles showing McClellan Postive Divergence (EOD):

4:45pm EST:  Bulls win the battle today by closing green after pushing the SP-500 back to the 1041/42 resistance point.  The rejection at the 1042.5 high today was quite strong and a drop to 1018.35 ensued.  For the primary count today’s action was  i-ii of wave (3) of 1-[1]-P3 up.   So we are expecting a wave iii-(3) up to the 1050 area in the next two days and a target of 1071 to 1084 for wave (5)-1 by OPEX Friday, July 16th.   For this count to remain valid, the 1015 level can’t be voilated to the downside.  If 1015 is violated, then we are looking at the alternate count (red) that has today’s 1042.5 as the end of wave c-4-[C]-P2.  And today’s drop to 1018 was wave i-5-[C]-P2, followed by the end of the day rise to 1028 for wave ii-5.  I’m expect wave iii-5 to get going after wave ii-5 reaches about 1032 (62%).  Wave iii-5 could target the sub-990 area and v-5 the 975 area.

I’m still believe the primary count is correct, based on the daily MACD and McClellan Oscillator positive divergences that are setting up off of the 1010.91 low from July 1st.

SP-500 15-min Chart (EOD):

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