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Nov 16th, 2010: Update 2 – Morning

Posted by pugsma on November 16, 2010

10:15 am EST:  A prefect hit of the lower price channel line at 1186.63.  My target for today of 1187 was hit and the pivot support held thus far.  There is positive divergence in the 60-min chart MACD histogram on the past two price lows of 1194 and now 1187.  This positive divergence is the beginning of the bottoming process.  If you look back to late August 2010, you will see the same MACD histrogram positive divergence that formed on the 60-min chart at the 1040 price low.  Positive divergence needs some time to play out and we may trade between the 1177 and 1187 pivot for a few days to a week.

For the alternate count, this 1187 level could be the end of minor wave 4-[1]-P3 in terms of a price low.  Even if minor wave 4-[1]-P3 takes more time to play out, this could the limit of the price low.  For instance a complex triangle could form (i.e. contracting or ascending) and this 1187 would become the A wave low opf the triangle.

For the primary count of the continuing double ZZ, I’m looking for a bounce to attempt to fill the 1195 to 1197 gap down from this morning.   This could be the b-(y) wave going into tomorrow and Thursday and then a c-(y) drop to around 1177 to 1184 would follow.

SP-500 15-min chart (10:05 am):

SP-500 60-min chart (10:20 am):

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