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July 27th, 2010: Update 5 – EOD

Posted by pugsma on July 27, 2010

5:40 pm EST:  Looking at the wave structure on the 15-min chart, what makes the most sense is that wave iii-(3) ended today at 1121.  And todays price action is a wave iv-(3) ascending triangle.  This wave iv-(3) a-b-c-d-e triangle satisfies the alternation rule with wave ii-(3), which was a simple a-b-c Zig-Zag.  So the next move should be wave v-(3) move to complete the inverse head and shoulders target of 1137 on the 15-min chart.  A couple things this primary count has going for it is 1) today’s cosolidation near the 200-day SMA and 2) the three white soldier daily candle pattern from the previous three today’s often signals a continuation of the trend upward after a small consolidation.  The trend upward usually last a few more trading days after the three white soldiers appear.

Alternately, I have labeld today’s 1121 high was the completion of wave (3)-3-[1].  And we are looking for a wave (4) correction of 38% down to the 1100 area and back-test of the inverse head and shoulders neckline.  Ultimately this count also ends up in the same 1137 area for wave (5)-3-[1], it will just take a little longer to get there.

Taking a look at the 60-min chart, there is a larger inverse head and shoulders pattern with a neckline between 1120 and 1130 that targets the 1229 area.  This pattern agrees with the diamond bottom reversal pattern that targets the 1251 area.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

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