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Sept 24th, 2010: Update 3 – EOD – IHS Neckline Break-Out

Posted by pugsma on September 24, 2010

6:00 pm EST:  In honor of the bullish “Underdog” E-wave bloggers (i.e. Tony Caldaro – The Elliott Wave Lives On, David – Trade Your Away Out, and Alphahorn ), please enjoy this song by Spoon, “The Underdog”.


8:30 pm EST:  The flat or expanded flat for wave (2) shown as an alternate on the update 15-min will become valid if the SP-500 breaks below the 1137 pivot.  The flat would start as a 5-wave down from here (1149) to 1123, c=a.  The expanded flat would rise up to 1155 and then drop to 1113, wave c=1.62*a.  Let’s keep and eye this alternate next week if if there is any weakness below 1137 and wave (2) requires more time. 

SP-500 15-min chart (updated to show the flat alternate count):

4:35 pm EST:  Yesterday was head-fake break-down of the large inverse head and shoulders neckline.  Today was the confirming break-out.  The IHS target is 1251.

Looks like a small ascending triangle formed at the end of the day.  I’m expecting this wave i-(3) to extended up to 1155 to 1158 early Monday.  The primary count is the wave (2) low was put in yesterday at 1122.79.  The SP-500 is now in wave i-(3) of 3-[1]-P3 up.  I’m expecting this wave i-(1) to top out here near 1155 and then produce a wave ii-(3) put back to about 1139 (50% retrace) and hold the key 1137 pivot support.  Wave i-(3) would be 32 points, so a typical wave iii = 1.62*i => 1139 + 52 = 1191.   There should be a consolidation triangle near the 1177 pivot and finally the target for wave v-(3) is in the 1200 to 1220 area.  Also, keep in mind in that in a wave (3)-3 the pull-backs, even for a wave ii-(3), should be very small.

The only alternate count I see right here, is the this rise to 1149 is part of a 3-3-5 flat for wave b-(2), and we’ll see the SP-500 re-test 1123 in a wave c-(2) early next week before beginning (3) up.  But this count a much lower probability count as long as the SP-500 stays above the key 1137 pivot.

Notice on the daily chart with the 13 vs 34-day EMA, since the bull cross on Sept 10th, the 13-day EMA has moved up to 1124.  This 13-day EMA was at 1119 yesterday and is one of the reason the market bounce off 1123.  In a strong bull run the SP-500 should respect this 13-day EMA after the bull cross over the 34-day EMA.

It’s time for some football.   Have a great weekend !

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 Daily chart (EOD):

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