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Dec 13th, 2010: Update 4 – EOD

Posted by pugsma on December 13, 2010

For any new premium subscriber, I’m offering the final 3 weeks of December for free if you sign up for a 2011 quarterly ($75) or annual ($240) subscription.  Follow this link to sign-up.  Thanks.

4:50 pm EST:  OK, looks like I may have been off by a day with the IT (Intermediate Term) Top call.  The SP-500 ran head-long into the 1245 pivot resistance today, peaked at 1246.73 and buckled into the close to finish at 1240.46.   The 10-year and 30-year long bonds reversed course to at the 62% retrace point.  And the VIX put in a second reversal daily candle today.  Also, the market leaders Nasdaq-100 and Russel-2000 reversed off key resistance level at or near their respective Oct 2007 highs.   There is big-time negative divergence on the SP-500 60-min MACD with respect to price.  And the daily MACD histogram on NDX and QQQQ put in a lower bar.   All of this is part of topping process.

The primary count has wave v-(5) of 5-[1]-P3 complete today at 1246.73.   Minor W5=0.62*W1 at 1246, so this fits.  There are additional targets a little higher at 1251 and 1252, but break-down at the end of the day below the lower rising wedge line likely means wave v-(5) has ended.  We did not quite get the wave iv-(5) into wave i-(5) overlap at 1240.02, but we came close at 1240.34.  The target for minor A of [2]-P3 is the 1177/1187 pivot area toward the end next week.

I’m bringing back the alternate count that today’s high of 1246.73 was only minute (1) of 5-[1]-P3.   If this is correct, then we should be looking for at least a 38% retrace for minute (2) to a level near the 1219 pivot.  From there, minute (3) and (5) will push minor 5-[1]-P3 towards the W5=W1 target of 1291 going into mid-January.  The key for this count is watch for the support at the lower blue channel line near the 1219 pivot.  SPY current pain is at 122.0 (SP-500 1215), so I would look for this wave (2) retrace to target the end of day on Friday, 12/17.

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

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