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Aug 2nd, 2010: Update 1 – Pre-Market

Posted by pugsma on August 2, 2010

7:30 am EST:  Welcome to August.   It’s starting off very similar to early July.  Let’s see if the SP-500 can achieve another 100 point gain in back-to-back months. 

ES Futures are trading higher at 1111 (1116 cash) this morning.  This would be good for a 15 point gap up open on the SP-500 if it holds up.  Remember, that the primary count from Friday EOD was that wave iii-(3)-3-[1]-P3 was underway.  This large gap up certainly fits with that count and it would be called a wave 3 “gap of recognition” if it remains open.  Often in a strong and decisive wave 3 move, there is a “gap of recognition” that remains open as the market advances. 

The 200-day SMA is a ES 1111 (1115 cash).  And there is strong overhead resistance at ES 1116 (1120 cash).  This is the neckline are of the large Inverse Head and Shoulders pattern that must be broken to confirm.   If the SP-500 can close above the 200-day SMA and cross the 1120 area decivesly then the near-term targets for wave (3) in the 1140 to 1150 are possible.  To the downside, ES 1084 (1088 cash) is now support and should not be broken if the primary count is correct.   And of course this gap up above 1101 becomes important support now as well.

Remember my plan moving forward with this service it not worry about the intra-day squiggles, but to focus on the EOD counts on the 15-min and 60-min charts that can be used swing trade over multiple days to weeks.  So there won’t be as many intra-day posts unless I see something of note that has changed my count before the EOD update.   For example if you were still in a swing trade off my July 2nd bottom call at 1011, you’d be up over 10% on a 1X SP-500 ETF (like SPY), over 20% on a 2X (like SSO) and over 30% on 3X (like UPRO).   The focus is provide the analysis and targets for these type of swings trades and not worry about the day-to-day volatility.

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=770e9e18-0616-4a67-8332-7c5ed7b336bd

ES Futures (6:53 am):

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