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Nov 11th, 2010: Update 1 – Pre-Market

Posted by pugsma on November 11, 2010

8:45 am EST:  ES Futures traded down to 1206 (1208 cash equiv.) afterhours yesterday, bounced to 1212 (1214 cash equiv) overnight and is right back down at 1206 (1208 cash equiv) in the pre-market.

For the primary count I’m expecting a 2nd ZZ, wave (y) of 4-[1]-P3 to be traced out, after the pivot resistance at 1219 held late yesterday afternoon.   Remember the 2nd ZZ should play out as an 3-wave drop:  a-wave drop,  b-wave bounce and c-wave drop.   The target I have for the wave (y) low is round the 1196 area.  However, it could be anywhere between 1196 and 1200 along the mid-channel line.

There is more bullish alternate count to consider (not shown on the chart yet).  It would be the 1st ZZ low of 1204.33 will hold as the low.   In this count, the 1227 high from Nov 5th would only be wave i-(5) of 3-[1]-P3 and the drop to 1204.33 yesterday was wave ii-(5).  It was almost precisely a 50% retrace of wave i-(5) and fits as a wave ii-(5).  I have seen some bloggers try to label it as a wave iv-(5) of 3-[1]-P3.  That count just does fit in my opinion because of the deep 50% retrace of the move up out of the triangle from 1183 of 1227.  With this alternate count the rise to 1219 yesterday was wave 1 of iii-(5) and the this mornings low will be wave 2-iii-(5).  So from this mornings first low above 1204.33, the SP-500 should then more aggressively higher over the next few days in wave 3-iii-(5) of 3-[1]-P3.  For this alternate wave count the 1227 high will be taken out in the near term and a new wave 3-[1]-P3 high will be made in the 1257 pivot area. 

This alternate count will be invalidated if a new low below 1204.33 is made in the cash market.  In wish the case the primary count is validated and the target is 1196 to 1200.  So watch to see how aggressively the first low is bought this morning to help sort out which count is correct.

SP-500 5-min chart real-time link:  http://www.freestockcharts.com?emailChartID=f5a242b4-a4dd-4f22-a754-fec4eaaddacc

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=06b74995-4566-472b-9ac3-658656248936

SP-500 5-min chart (EOD, 11-10-10):

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