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Sept 17th, 2010: Update 5 – EOD

Posted by pugsma on September 17, 2010

5:40 pm EST:  Well, I’ve been trying to figure out where wave (1)-3-[1]-P3 was going to end since mid lat week on Wed Sept 8th.  Late in the day today, I’ve come to the conclusion that wave (1) ended on Tues Sept 14th at 1127.36.  This is where the trust out of the wave iv-(1) ascending triangle ended near the measured move target of 1129.  I believe the consolidation between 1114 and 1131 this week is part of a wave (2) expanded flat.  The a-(2) wave of the flat was the drop from 1127 to 1114 on Sept 15th.  The b-(2) leg up was today’s peak at 1131, which is roughly 1.22*a.  And I’m now expecting a wave c-(2) down on Mon/Tues to about 1107 to 1110 area for 1.62*a.  Thus, I think this wave (2) will hold the key 1107 pivot area after a 20 to 25 point retrace from 1131.  This should help to reduce some of the overbought conditions without breaking a key support area.

Note that the 13-day EMA is at 1107, which achieved a bull-cross above the 34-day EMA (1096) on Sept 10th.  The SP-500 also closed this week decisively above both 20-week SMA of 1091 and the 50-week SMA of 1107.  The 20-day SMA has moved up to 1088 and the 50-SMA is at 1094.  All of these important moving averages listed are sloping upward in a bullish configuration and should provide plenty of support to the SP-500 on the wave (2) pull-back toward the 1107 pivot early next week.

After the wave (2) correction finishes, I’m expecting an aggressive wave (3)-3-[1]-P3 leg up to at least the 1170 area, which should begin mid-to-late next week.  There is a medium size inverse head and shoulder (yellow labels) on the 60-min chart with neck-line at 1105 and a target of 1170.  I expect the wave (2) pull-back early next week to be a back-test of the broken inverse head and shoulders neck-line.  And of course once the large inverse head and shoulders (green labels) with neckline at 1131 is broken above decisively, this should lead to a target of 1251 by end of 2010.

I hope every one has a great weekend.  It’s time for some football… Stocks Up!  Boiler Up!

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 Daily chart (EOD):

SP-500 Weekly chart (EOD):

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