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Aug 25th, 2010: Update 2 – Morning

Posted by pugsma on August 25, 2010

11:15 am EST:  Good news for the bull is the bears left a lot of tasty gaps to fill (i.e. 1051, 1067, 1086, 1094, and 1121).   We are getting a new bull cross on the 15-min MACD as a type this and the 60-min chart has a nice MACD positive divergence and is nearing  bull cross.

11:05 am EST:   For the primary count I have wave v-(c)-2-[1]-P3 complete at 1040 this morning.  The wave (c)=(a)=>1040.  Also, the leading diagonal for wave 1-[1]-P3 retrace target for 2-[1]-P2 was 78% or 1037, so that fits.   I’m expecting a move up towards at least the 1095 to 1105 area for wave (1)-3-[1]-P3.

For the alternate count (red), I have changed things a bit.  I believe we are in wave 3-(3)-[C]-P2 down, not 1-(3)-[C]-P2 as previously labeled.  So we are right in the heart of a strong downward wave 3.   All bounces should be small and short lived.  I have wave i-3-(3) compelte at 1040.  I expect a bounce to between 1055 (38%) to 1065 (62%) for wave ii-3-(3).   Then wave iii-(3)-3-[C]-P2 down will crash through all support to a level down below 1011.   The wave 3-[C]-P2 target is 985 for the head and shoulders target.  Ultimate wave [C]-P2 target is 950 area (50% retrace of P1).

The strength and magnitude of this next bounce separate the two counts.  Anything above the 1067 gap is very bullish.  If it stalls between 1055 and 1065, the alternate count is much more likely.

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=2926229d-1dad-4f2e-a045-3cbe55329437

SP-500 60-min chart real-time link: http://www.freestockcharts.com?emailChartID=17818127-0b8a-4e1b-b4bf-424ab5d5a7f9

SP-500 15-min chart (11:00 am):

SP-500 60-min chart (10:00 am):

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