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Aug 12th, 2010: Update 4 – EOD

Posted by pugsma on August 12, 2010

7:10 pm EST:  Today’s drop and close below the 50-day SMA is not a good sign for the bulllish primary count.  The SP-500 is going to have regain the 1088 to 1090 area very soon (1 to 2 days) or else there is a much greater probability of new lows below 1011, than there was just two days ago when the SP-500 was above the 200-day SMA at 1115.   Below 1057 will be my uncle point to bring out an alternate count that is much more bearish and has P2 going lower than 1011.

I have the primary count as a wave (4) of C triangle.  I’m expecting about a 16 point drop from today’s high of 1086 to 1070 tomorrow.  This should fill the 1070 to 1072 gap and complete the wave 2-[1]-P3 correction.   1070 is a 50% correction of wave 1-[1]-P3.  It is possible that the market moves higher from today’s low of 1076.69 without a gap fill at 1070.  So we’ll have to watch how the market reacts overnight and early tomorrow.  If this area around 1070 holds, then I look for the SP-500 to start advancing into OPEX.

I’ve looked at a number of things this evening and I’m removing the alternate of a larger A-B-C correction to the 1036 to 1057 area.  If this current wave down extends below a quick test of 1070 tomorrow or Monday, then it’s time to start considering alternate counts with P2 lows below 1011. 

On the 60-min chart you can see that the SP-500 also closed below the critical support line from the Oct 2009 to May 2010.  Also, the bull cross of the 13-day vs 34-day EMA that occured on July 26th is now in serious jeopardy of revesing (see daily chart).  The market needs to re-gain the 1088 to 1090 area very soon.

SP-500 15-min chart with MACD (EOD):

SP-500 60-min chart with MACD (EOD):

SP-500 60-min Chart (EOD):

SP-500 Daily chart with 13 vs 34-day EMA (EOD):

SP-500 Daily Chart (EOD):

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