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Sept 20th, 2010: Update 2 – Morning

Posted by pugsma on September 20, 2010

11:10 am EST: If this is an Ending Diagonal (ED) for wave v-(1), then it must not exceed the 1141 level.  Right now at 1138, it’s has overshot the ED upper trend-line, which does happen sometimes.  The ED count max at 1141 and the pivot at 1137, must hold or else this will melt higher.

There is a potential canary in the coal mine today (negative divergence), in that the VIX is basically flat with this SP-500 move up over 10 points.  So the VIX is not confirming this break-out.

SP-500 5-min real-time chart link: http://www.freestockcharts.com?emailChartID=f5f7abc9-492a-4d75-89ae-1992ba822f72

SP-500 5-min chart (11:05 am):

10:55 am EST:  The SP-500 is holding under the 1137 pivot.  If it holds as resistance, I expect a retrace  back down to 1089 (50%) to 1100 (35%) for wave (2).  If it breaks through 1137 to 1140, then the next pivot resistance is 1168 to 1178 and we are clear in wave (3), not wave (1).

My feeling is this first break of the 1131 inverse head and shoulders neck-line will be a false break and we will need to test the support at the 1090 to 1107 pivot before heading much higher.  But if this move does not start to pull-back soon, then the break-out will be confirmed.

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=aa2b60cc-8184-4107-9d58-c8505bd1f234

SP-500 15-min chart (10:45 am):

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