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July 30th, 2010: Update 4 – EOD

Posted by pugsma on July 30, 2010

5:45 pm EST:  Oh what a glorious July to be a Bull.  The SP-500 closed at 1102, up 91 points (9%) above the July 1st bottom of 1011.  Subscribers and followers received the news of the July 1st bottom (P2 bottom, 38% retrace of P1) on the afternoon of July 2nd with the SP-500 trading between 1015 and 1020.  Since early July, the SP-500 has followed a near perfect set of Elliott Wave channels on a march to a July 26th high of 1121 (see the 15-min and 60-min charts below).

The primary count is that wave (2)-3-[1]-P3 ended today at 1088 at nearly a perfect 50% retrace of wave (1).  And wave (3)-3-[1]-P3 got underway this afternoon.  The SP-500 maintained a close above the key 13-day EMA at 1095.  The bullish cross of 13 vs 34-day EMA occured early this week and the SP-500 has closed above the 13-day EMA each day during this wave (2) correction.  Also, note on the Daily chart, that today the SP-500 produced a bullish cross of the 20-day SMA (1082) above the 50-day SMA (1081).  This is the first such bull cross since the mid-May bear cross.  So all the momentum is clearly in the bulls favor.  The key to really get the bull summer party started is a close above 1120.  There is  large Inverse Head and Shouders pattern with a neckline at 1120.  Once decisively above 1120, the SP-500 is free to run up to a target area of 1230.  Plus, remember my Diamond Bottom Pattern that measures to 1251 is still in play was well.

There is an alternate count with a little deeper retrace to  for wave 2-[1]-P3 if the 1081 to 1088 area is taken out next week.  However, I don’t give this count much confidence at this time with the SP-500 still above key support.  The primary count looks good right here.

Have a great summer weekend.  If you want to become a PUG Premium Service subscriber for August or for the next quarter (Aug to Oct), send an e-mail to pu_gridiron@yahoo.com.   The goal of the premium service is to keep you on the correct side of the trade.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

SP-500 Daily Chart (EOD):

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