Aug 5th, 2010: Update 4 – Mid-day
Posted by pugsma on August 5, 2010
12:45 pm EST: Of course if you’re playing the Diamond Bottom Reversal Pattern that I first identified in mid-July, after this 3-day consolidation between 1116 and 1127 (notice the similarity to Feb 2010) above the 200-day SMA at 1115 and once the SP-500 breaks above 1131, then it’s to the moon Alice (i.e. target 1251). 🙂
This is the battle ground area (1105 to 1131) of the bears versus bulls for the control of the market going into the fall. Interesting times.
SP-500 Daily Diamond Bottom Reversal (12:40 pm):
11:55 am EST: Here is a pertinent article from David Banister of Minyanville “Analyzing Pattern of SP-500 Index Rally” from 9:10 am, today. David questions whether this is “a “corrective” rally up in the markets working off oversold indicators and sentiment in late June, or the start of a major third Elliott wave structure off the 2009 bottoms that takes the markets to new all-time highs.” Sound familiar?
David implies that the pattern on the SP-500 is an “Ending Diagonal Triangle” which occurs at the end of a corrective move, like the end of a wave 2 or wave B. And he thinks the SP-500 is headed back down to re-test the 1011 low and likely headed lower. I’m looking at the pattern as a possible “Leading Diagona Triangle which occurse a the beginning of an impulsive move, like a wave 1 or wave A. My interpretation of the pattern (i.e. the alternate count) is for a wave leading diagonal 1-[1]-P3 of the next major wave of the bull rally to new highs. It will be an interesting few weeks to see how this resolves. 🙂
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