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Sept 8th, 2010: Update 3 – EOD

Posted by pugsma on September 8, 2010

4:20 pm EST:  Today played out pretty much as forecast.  At the EOD yesterday with the SP-500 at 1091, I forecast a new high today above 1105 for today in a wave v-(1).  The SP-500 reached 1103.26 and backed off.  I feel strongly that this wave (1) up is waning and is likely over.  But since we are still in the upward price channel, there is still a possibility for one more high above 1105 towards 1115 to compete the wave (1); shown in blue on the 15-min chart as an alternate count.  But for now, I’m going to call the wave (1) over at 1105.1 from Friday Sept 3rd.  There is a strong triple negative divergence between the MACD and price on the 5-min chart and a double negative divergence on the 15-min chart.  Also, the 60-min chart shows a strengthening bear cross on the MACD that was established yesterday on Sept 7th.  The next major move for the primary count is a move lower in wave (2).  The wave (2) targets are between 1065 (62% retrace) and 1073 (50% retrace).  I’m looking for the SP-500 to fall toward this level heading in to OPEX week, next week.

Notice the SP-500 price is still contained with the large triangle established from the April high of 1220 and July low of 1011.  Which ever trend-line of this triangle is broken first, should usher in the way for the next major directional move over the intermediate term of 2 to 3 months.  My primary count is that after a wave (2) pull-back to the 1065 to 1073 area, the wave (3) move up will break through the  inverse head and shoulders neckline at 1130 triggering a move toward 1251 going into the end of 2010.  Of course if the lower yellow trend-line near 1040 is taken out, then it could usher in a move down below 1011 towards 950 or even 870.  So the bulls are not out of the woods just yet.  They need to break above the upper trend-line (they have been trying the past 3 days unsuccessfully) and then above 1130 to confirm the move higher toward 1251.   A drop down to 1065 to 1073 next week will build back some bearish sentiment and add some additional short sellers required as fuel for the next move higher.

SP-500 5-min chart (EOD):

SP-500 15 min chart (EOD):

 

SP-500 60-min chart (EOD):

SP-500 Daily chart (EOD):

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