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Sept 13th, 2010: Update 5 – EOD

Posted by pugsma on September 13, 2010

8:30 pm EST: Dr Copper continues to negatively diverge with respect to price as the SP-500 moves higher.  This has been a sign of an intermediate term top the last 4 times it occured.

SP-500 vs Dr Copper Daily (8:08 pm):

4:55 pm EST:  Bulls maintained a firm grip on the Markets today, as the SP-500 jumped higher by 14 points and touched 1123.87.  The Russel-2000 shot up +2.5% today and Nasdaq was up +1.9%, while the SP-500 was up +1.1%.  The risk trade is certainly back on, with small cap and technology shares leading the charge higher.  The XLF banking index was up +2.0% as well.

The bulls have the football on the 6 yard line (i.e. 6 point from crossing 1130) in Bear territory.  Time to bring in the hammer and convert this touchdown (i.e. break the IHS neckline).

Realistically, the SP-500 is due for a pull-back here.  The SP-500 is up 84 points (+8.1%) in just 9 trading days.   The July rally covered 88 points in 12 trading days.  So this September rally off of 1040 is even faster.  But that’s what you’d expect in a wave (1)-3-[1]-P3 up.

Off this mornings high of 1124 it looks like a corrective wave to me.  Either its’ a wave a-b of 4-v-(1) that will hold above the yellow trend-line at 1113 to 1115 before making a new high above 1124 (likely around 1129) in wave 5 of v-(1), as shown as my alternate count .  Or it’s already begun the waves i-ii of wave a-(2) down, as shown in my primary count.  In which case the SP-500 should be headed for about 1105 for wave a-(2) and ultimate down to 1092 for wave c-(2).  Note that 1092 is the 38% retrace of wave (1) and there is a cluster for targets for the 13-day EMA, 34-day EMA and 50-day SMA between 1088 and 1092.  And of course there are multiple gaps from 1090 to 1113 that need to be filled before the market can advance higher than 1130.  For the primary count, the SP-500 can’t climb above today’s high of 1123.87 and remain valid. And for the alternate count, the SP-500 needs to hold above 1111 to remain valid.

SP-500 5-mi chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

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