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Aug. 2nd, 2010: Update 2 – Afternoon

Posted by pugsma on August 2, 2010

3:40 pm EST:  A very stong push up today certainly looks like a iii-(3)-3-[1]-P3 move.  And the alternate count shown last Friday EOD of is out.  However, if this is a iii-(3)-3 move then it should not stop here at 1126.  It should power on through the middle channel line and bust up the potential bearish rising wedge pattern (see 60-min chart below).   The alternate count would be that this move from 1011 to 1126 is a leading diagonal triangle for wave 1-[1] (i.e. a bearish rising wedge).  And it’s complete or almost complete after today’s move.  Leading diagonals apear in the wave 1 of an impulse or A position of a corrective, so this fits with a wave 1-[1]-P3 impuluse move up.  In which case we’ll see a deep correction for 2-[1] of between 38% and 62% back down to the 1055 to 1082 area to better form the right should on the Inverse Head and Shoulders pattern.  This alternate count would agree with Springheel_Jack’s Scenario that he has shown on the ES.

I’m a believer in the primary count for now and we need to see the SP-500 consolidate above the 200-day SMA of 1115 and push above 1131 (June high) to confirm this count.   But we should keep watch out for the alternate count if the SP-500 breaks down below lower channel line that has now pushed up the the 1095 to 1105 area.

SP-500 60-min Chart (3:30 pm):

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