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Aug 4th, 2010: Update 3 – Mid-Day

Posted by pugsma on August 4, 2010

1:03 pm EST:  The SP-500 may still achieve that one last push up towards 1134 to 1138 in a wave 1-(3) or it could be done at 1128 from early today.  However, a close examination of the 60-min chart with MACD Oscillator shown below price, indicates that this push higher is very likely over.  The triple negative divergence on the MACD signal line with each new high of 1099, 1121 and now 1128 indicates that prices should begin to correct again.  And notice the MACD signal line has a bear cross and the histogram bars are going below the zero line.  Both of these argue for a at least a near-term correction in a wave 2-(3) to the the 1103 to 1107 area.  And if that 1102 to 1107 area fails to hold up, then the alternate count with the leading diagonal triangle for the wave 1-[1] , says that we should expect a drop to the 1055 to 1069 area (50 to 62% retrace) in a wave 2-[1] correction.

The risk is  weighted to a down side correction at this point.  We just have to watch and see the magnitude of the correction in determine if the primary count holds or we need shift to the alternate.

SP-500 60-min chart with MACD (12:50 am):

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