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July 26th, 2010: Update 3 – EOD

Posted by pugsma on July 26, 2010

6:25 pm EST:  A slow and steady march to cross the 200-day SMA of 1113 today.  As noted, earlier today the SP-500 was lagging in this regard and was bound to follow through higher with the high risk indices of the Nasdaq and Russel-2000.  When the risk trade is back on the Russel-2000 in particular will lead the advance higher.  The Russel-2000 was up over 2% today while the rest of the market advanced about 1%.  Also, today the SP-500 also achieved the bull-cross of the 13-day over 34-day EMA.  The 13-day EMA, currely at 1086, should now act as support.

The primary count is wave iii-(3), with wave-iii sub-dividing into another 1-2 move today.  Still looking for a target area of 1137 for wave v-(3) to complete.    I would not be surprised if the SP-500 gets caught up in a wave 4 triangle between 1105 and 1120 for a few days.  The McClellan oscillator is more over-bought that any time during the Feb to Apr 2010 advance to 1220.  So there needs to be some corrective waves soon to reset the over-bought conditions in the shorter-term oscillators.  However, the daily oscillators still have plenty of room to run higher.  The daily RSIs is barely at 60 and doesn’t go over-bought until above 70.  All the daily oscillators are now back into bull territory.

Also the is still the alternate count (purple) were wave i-(3) is completing and we’ll get a much deeper wave ii-(3) retrace to 1090 to 1096 (a retest of the broken Inv H&S neckline), before the march to 1137 for wave (3) resumes.

Finally for those that are new to my premium service for this free trial week, you really should go back and review my EOD blog entry from Friday July 2nd where I called the July 1st bottom of 1010.91.  I used the stong postive divergence in the McClellan Ocsillator to help make that call.  On that July 2nd Friday afternoon,  I laid our a wave road map for a climb towards 1200/1220 that has unfolded nearly as mapped.  We are just about half -way there today at 1115.  So we’ve had a 105 point (10%) gain in the SP-500 while the perma-bears were calling me crazy and betting on the next big wave down at every 5 point SP-500 dip.  Now that we are half-way home, we have to stay alert, as I do expect the perma-bears to resurface at some point and try to make a stand.  This area from 1115 to 1131 is a logical area for that next big fight.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):


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