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Sept 22nd, 2010: Update 1 – Pre-Market

Posted by pugsma on September 22, 2010

8:10 am EST:  ES futures fell to 1129 (1134 cash) overnight.  So this has been a 15 point correction off the ES 1144 (1149 cash) peak yesterday afternoon and ties the largest correction for this bull move off the August 31st low of 1040.  My warning about the McClellan Oscillator negative divergence and MACD negative divergence with 15-min and 60-min charts still stands.  Be very careful here with long positions.

For the primary count I’m expecting this move lower for wave (2) to continue to at least 1107 for 38% correction ow wave (1).   There are other lower targets at 1094 for a 50% retrace and 1081 for a 62% retrace.  However there is a cluster of moving average support in the 1094 to 1107 band and of course the key 1090 and 1107 pivot supports.  So I don’t expect wave (2) to drop through this support.  If it does, then is major red flag that price are head much lower.

For the alternate count that wave v-(1) is going to be extened to up to 1160 to 1170, this wave 4 of v-(1) must hold above ES 1122 (1227 cash) to remain valid (i.e. stay above the wave 1 of v-(1) level).   I suspect this move lower would find support at the large head and shoulders neckline at ES 1126 (1131 cash).  This morning ES hit 1129 (1134 cash) and bounced.  We’ll see if hit holds up in the cash market.  You can see the rising ES channel break would also be in the ES 1126 (1131 cash) area.

As a note to subscribers, anytime you see my primary and alternate count with near-term target circles in the same direction (like yesterday afternoon I had both targets lower; primary target at 1107 and alternate at 1130), it’s a good idea to play this directional move for potential profits.  This type of “set-up” means I’m almost 100% confident in the next directional move.  Look at my 3:05 EST post from yesterday with the SP-500 near the 1148 high.  Both of my target circles were significantly lower. 

SP-500 5-min chart real-time link: http://www.freestockcharts.com?emailChartID=945c3b93-51c1-40b7-bce8-841b383dd805

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=b55e0cab-5dda-406c-b4ba-5da45fc9e829

ES Futures (7:24 am):

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