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Oct 8th, 2010: Update 3 – Mid-day

Posted by pugsma on October 8, 2010

12:15 pm EST:  OK, today was more exciting that I first thought.  This could end up being a very important today in determining the next “major” move in the markets.    Updated 15-min chart.

SP-500 15-min chart real-time link:  http://www.freestockcharts.com?emailChartID=0e8b0271-c286-4844-b0f6-48bdccb11920

SP-500 15-min chart (12:10 am):

12:04 pm EST:  OK, the contracting triangle wave iv-(5) is out.  This whole move off the 1132 wave (4) low now is taking the shape of bearish rising wedge, ending diagonal (ED).  Grand (Wave Principal) has been showing this count since yesterday.   I think we may have just completed wave iii-(5) of the ED today at 1165.   The upper yellow trend line is still be respected.  I think we should get pull-back towards 1160 for wave iv-(5) and then one more push up to the at least the 1168 pivot resistance to complete wave v-(5) of the ED.  There could also be some over-throw above 1168 to the 1177 target.   This could all happen yet today and end the entire move for wave (5)-3-[1]-P3 or it could finish out every next week.

However, before you get to bearish that this impressive move up from 1040 maybe about over, keep on an eye on the VIX.  If it breaks support below 20.0, then the SP-500 is free to move much higher above 1168/1177 without a significant pull-back.  This wave (5) could just be at the beginning (i.e. only i-(5)) and the stretch targets of 1190 to 1200 could come to play-out in the coming weeks.   It’s all about the VIX here and if the yellow trend-line is broken through to the upside.  Also, remember my longer term weekly chart that has the last bearish trend-line off 1575 (Oct 2007), 1220 (Apr 2010) and now around 1168/1177.  If the SP-500 can fight through this area, it’s game over for the bears.  🙂

SP-500 5-min chart real-time link: http://www.freestockcharts.com?emailChartID=6c41c42f-cea5-414b-823b-f576068f9120

SP-500 5-min chart (11:50 am):

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