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Aug 6th, 2010: Update 1 – Pre-market

Posted by pugsma on August 6, 2010

9:25 am EST:  The ES were flat between 1122 and 1126 (1125 and 1128 cash) overnight prior to the July jobs report.   The jobs report came in moderately weaker than expected.    The ES quickly dipped to 1112 (1115 cash), so right back to the 200-day SMA 1115 support area.  This area between ES 1112 and 1115 (1115 to 1118 cash) seems to be holding up as support in the pre-market.

The primary count changes again back to my thinking of earlier yesterday.  It was a matter or whether or not wave 2-(3) is complete.  My first instinct with yesterday mornings drop to 1118 said wave 2-(3) was going lower to the 1105 to 1109 area, but I changed it in the EOD update.    It’s now very likely that wave 2-(3) will get put it today and the key area to watch to the downside in the cash market is still the 1102 to 1107 gap support.  The wave 2-(3) 62% retrace target is 1105, 50% retrace target is 1109 and 38% retrace is 1113.   The lower channel line is right at 1107 at the open today and climbs to 1112 by the close.  So it’s critical that level above 1102 holds up.   However it will be intesting early today to see of the 200-day SMA support near 1115 can hold this drop for wave 2-(3).  If it does, the bulls will regain control very quickly.

And break down through the 1102 to 1107 gap will trigger a move to the alternate count (see the purple lables).   In the alternate counts calls for a wave 1-[1] end at 1129 and now a wave A of 2-[1] drop that should target the 1088 to 1098 area including a break the lower channel line support.  The B-wave would retest this broknen channel support near next week.   And the ultimate target for the wave C of the alternate count  is 1055 to 1069.  This would be a deep retrace for the leading diagonal triangle of wave 1-[1].

Finally, I will be away from my computer all-day today and will not be able to post blog or chart updates, as I’m driving from Chicago to St. Louis to move my oldest daugher in to her apartment in St. Louis.  Also, the EOD update maybe very late tonight or even tomorrow morning, as we are moving her in between 5 and 9 pm.  We are driving back from St Louis to Chicago on Monday, so my blog posting on Monday will also be very limted.  I will try to post comments and answer questions in the comments section when I can.

I have update the 15-min chart to reflect the change back to the wave 2-(3) heading lower in an a-b-c move.  Today is obviously a wave-c down for this correction.

SP-500 15-min chart (EOD 8/5 revised for today’s pre-market):

SP-500 15-min real-time link: http://www.freestockcharts.com?emailChartID=5c1d870d-5ca4-4216-950a-9e712b1daf50

ES Futures Chart (8:42 am):

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