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Oct 21st, 2010: Update 1 – Pre-Market

Posted by pugsma on October 21, 2010

8:35 am EST:  ES Futures rose to 1182.50 (1186.50 cash equivalent) overnight.   This sets a new recovery high for ES since the April 2010 high   The DOW-30 and Nasdaq are now within a cat’s whisker of breaking their April 2010 highs, which could happen today.  The SP-500 is within 2 points of producing a “Golden Cross” of the 50-day SMA (1118) above the 200-day SMA (1121).  The last “Golden Cross” on the SP-500 occurred in late June of 2009 with SP-500 trading around 900.  The SP-500 rose to 1220 over 30% after this cross.  If the SP-500 achieves a 30% rise from here, it will gain about 350 points and hit a level of 1530 reaching it’s old 2007 high.  Can you say P3 up!

All three counts are still in play.  For the primary count of the large triangle wave 4-1]-P3, the 1185.53 level should contain this move higher producing reversal back down in a wave (c) towards 1168.   However, the 1st alternate count with the SP-500 in wave iii-(5) of 3-[1]-P3 is looking pretty good this morning.  Before switching over to this count, I want to see a push through 1185.53 in a sustained move.  There are couple upside levels above 1185.53 to watch for as resistance this morning.  The first resistance is around 1191, which is th target for the wave the (b) of an expanded flat for wave 4-[1]-P3  of the 2nd alternate count. If this 2nd alternate is in play then the SP-500 would terminate at 1191 before reversing hard back down in a (c) wave towards 1150.  The second upside level of resistance to watch is the 200-week SMA at 1195.    The 200-day SMA is the resistance the cap the April 2010 high of 1220.

SP-500 5-min cart real-time link: http://www.freestockcharts.com?emailChartID=7908870a-446b-44e7-8d1d-ba4f56a4aace

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=ee407341-26c0-4ae0-b9d2-79c501fc560b

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