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Aug 16th, 2010: Update 6 – EOD

Posted by pugsma on August 16, 2010

5:50 pm EST:  Primary count is that wave 2-[1]-P3 bottomed today at 1070, which is the 50% retrace of wave 1-[1]-P3.  Waves i and ii of (1)-3-[1]-P3 were put into today.  We are looking for wave iii of (1) up towards 1105 to 1115.

Alternate count is that wave 1-[C]-P2 bottomed today at 1070.  I’m looking for a weak wave 2-[C]-P2 bounce to about 1092 or 1099 (38%  to 50% retrace).  Waves a and b of 2-[C]-P2 were put in today.  I’m expect wave c of 2 reach the first target of 1092 tomorrow.  There is a gap fill target of 1090.

How the SP-500 reacts around the 1090 gap and the 200-day SMA of 1088 tomorrow should provide some good information on the correct count.   I’m of two minds right here in the neutral region between 1057 and 1105.  Basically, the primary count would play-out as a long, slow grind upward towards 1220 to 1250 by the end of the year for the completion of wave [1]-P3.   Or for the alternate count wave [C]-P2 down will be violent washout to at least the 950 area by late Sept to early Oct.  Then from there, P3 up gets underway going into the end of the year and plays out to new highs in 2011 and 2012.   The action in the US Treasury’s 10 Year Note Yield would seem to indicate that the alternate count is correct.  But maybe all the “smart money” rusing into Treasury’s and fixed income bond funds to protect against the coming market crash this fall have it wrong.  They could miss out on a 15 to 20% rise in the stock market if my primary count is correct.  It’s going to be an interesting fall to chart the waves.

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

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