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Sept 21st, 2010: Update 2 – Morning

Posted by pugsma on September 21, 2010

11:00 am EST:  Here is a alternate count (in blue) showing this wave v-(1) continuing to extend off the wave iv-(1) low of 1105.   In a 5th wave extension a good target is for wave v=iii.  Wave iii was 65 points from 1040 to 1105.  So a 5th wave extension would mean 1105 + 65 = 1170.  As I noted, 1168 is a key longer term pivot resistance point.  If this wave v-(1) does continue to extend, we should see wave 3-v-(1) reach for the 1150/1155 area later today or tomorrow.  Then a wave 4-v-(1) consolidation above 1140 before wave 5-v-(1) rises to the 1165 to 1170 area before the end of September.

If you look back at how the wave [3]-P1, exploded off the 869 low of July 2009, you can see that this explosion off the 1040 low of August 31st, 2010 is very similar.   That first wave of [3]-P1 covered 150 SP-500 points before it’s first significant pull-back.  Thus far this wave has exploded 105 SP-500 pionts with any significant pull-back.  If this wave reaches 1170, then that will be 130 points.  This would make a good arguement that this wave is the beginnig of [5]-P1, as I speculated in my Sunday blog post.

The primary count remains that a wave (2) pull-back to at least the 1121 area (maybe as deep at 1105) is going to happen later this week, after the FOMC announcemnt.

So, either the FOMC announcement is either the catalyst to reach 1170 in the extension or the catalyst for the first significant pull-back to the 1105 to 1121 area.  Obviously that does, help much in trading as it could break either way from this point.

SP-500 15-min real time link: http://www.freestockcharts.com?emailChartID=9bad97ef-3f21-4735-8544-8f0fa38153ef

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

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