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Oct 13th, 2010: Update 5 – EOD

Posted by pugsma on October 13, 2010

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5:50 pm EST:  There are some warning signs that an intermediate top is near based on the SP-500 Daily Candle Chart and month and half  long Negative Divergence with respect to the McClellan Oscillator ($NYMO).  See the attached chart below for my comments.  We should be looking for an itermediat top in the next 1 to 7 trading days (Oct 14th through Oct 22nd).  The bulls need to protect their massive gains since the 1040 low on August 31st.  A big chuck of your gains can be wiped out in a one or two day distribution.

SP-500 Daily Candle Chart (EOD): 

 

4:20 pm EST:  The SP-500 broke-out above the 1177 pivot resistance and traded as high as 1184.38 this afternoon.  My EOD  Oct 12th prediction for wave 3-iii-(5) was 1184 based on W3=1.62*W1.

The primary count (white) is that wave 3-iii-(5) of 3-[1]-P3 completed today at 1184.38.  I’m looking for a wave 4-iii-(5) retrace between 23% (1177) and 38% (1173).  This retrace began late this afternoon.  I would not be surprised by a back-test of the busted yellow wedge trend-line and a gap fill between 1169 and 1170.  Wave 4 would stay above 1168.68 to remain valid (i.e. W4 into W1 violation).    After the wave 4 correction, I’m looking for wave 5-iii to reach the 1195 target area.  And ultimately wave v-(5) of 3-[1]-P1 should reach 1215 over the 2 week period going into the end of October.  This is all clearly laid out as an “idealized” E-wave count on the 15-min chart with the white circle targets.

For the alternate count (blue), I have found a count that works based on the wave (4) low being at 1122.71 and today’s high of 1184.38 being the end of wave v- (5).  The target for this alternate count was 1182, based on wave v=i.  If this alternate count is correct, the SP-500 should begin to correct and consolidate between a retrace of 38% (1130) and 23% (1151) in wave 4-[1]-P3.  If the SP-500 breaks back down through the 1168 pivot, this alternate count will gain  momentum.  The first target for wave (a)-4 is at 1162.

On the daily chart, the all-important bull trend indicator, 13-day EMA has risen up to 1156.  Keep watching for closes above this 13-day EMA to support the up-trend continuing.

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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