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Aug 31st, 2010: Update 2 – Morning

Posted by pugsma on August 31, 2010

11:10 am EST:  Here is close-up look at the potential bearish wave (b) triangle and head and shoulders on the 5-min chart.  A close above the uppler purple bear trendline would be very bullish (so a close above 1060 and preferably above 1067).

FYI, looks like we might be working on a small bull flag between 1054 and 1048 to close the 1048 to 1049 gap.  If this correct, then the bull flag target is 1048 + 14 = 1062.

SP-500 5-min chart real-time link: http://www.freestockcharts.com?emailChartID=5d715e75-1562-47e7-ae02-3940695da3c9

SP-500 5-min chart (11:00 am):

10:35 am EST:  Well, we got a third bounce off the 1040 support.  Is the third time a charm for the bulls?   I’m not so sure just yet.  I see a potential  (b) wave triangle of the double ZZ abc-x-abc alternate count (in red).  This triangle (b) wave could have a terminal e-leg anywhere between 1053 and 1061.  Once this e-leg is complete the SP-500 would reverse hard downward.  Interestingly this alternate count also sports a nice head and shoulders pattern with neckline at 1040 and target of 1040 – 25 => 1015.  So be careful bulls.

For now I’ll stick with my primary count of a wave ii-(1) running flat that ended right were where I predicted it would in the EOD update, somewhere between 1040 and 1045.  We should now be in the wave iii-(1) up towards 1086 to 1094.  I still looking for 1100 to 1105 with this count by the the day after Labor Day, Sept 7th.  Break through the 1063 to 1067 gap resistance will confirm this count.

SP-500 15-min chart real-time link:  http://www.freestockcharts.com?emailChartID=31c03079-fac1-4116-be5f-a2013b55f872

SP-500 15-min chart (10:25 am):

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