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Aug 10th, 2010: Update 1 – Pre-market

Posted by pugsma on August 10, 2010

9:10 am EST:  ES Futures dropped to 1113 (1116 cash) overnight.  The ES 1111 (1114 cash) level is the lower channel edge the cash market open today.  This lower channel line has been in place since the July 1st low of 1011.  So clearly if it’s breached significantly the nearly month and half move higher is likely ended.   And a drop through the gap of area of 1099 ot 1104 (1102 to 1107 cash) would further confirm that a move lower is underway.    In this case the alternate count would become the primary count.   The 1129 level would be labaled as the top of wave 1-[1]-P3 for the leading diagonal triangle (bearish rising wedge).   The price targets  for wave 2-[1] are between 1036 and 1069, as the the leading diagonal should have a deep retrace between 50% and 78% of wave 1-[1].

Obviously if the lower channel edge holds near 1114 cash or if the SP-500 maintains the gap support avbove the 1107 low made Friday, it’s means that the primary count still has chance of playng out to new near term highs above 1129.

Dr Copper fell hard overnight and has fallen the past two days.

My thinking is that the SP-500 my try to maintain the lower channel line this morning as we await the FOMC announcement at 2:15 pm EST.  That should be the catalyst for the next move in eithe direction.

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=a2c800fe-dd43-4876-95ee-151071015c0f

ES Futures (8:49 am):

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