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Jan 4th, 2011: Update 2 – EOD

Posted by pugsma on January 4, 2011

6:40 pm EST:  Given what transpired today with the Russel-2000 in breaking well below the Dec 31st low, I think the top of minor degree wave 5 of major degree wave [1]-P3 is very near.  It could even be in place at 1276.17.  However, I do think there is one more high left in the SP-500 near the minor degree wave 5 = 1 in price and time target of 1291 by Jan 10th.

Also given the Russel-2000 deep retrace  today and the McClellan Osc peaking yesterday, I have had to re-adjust the SP-500 count to show the 1276.17 high as the end of minute degree (3) of 5-[1]-P3.   This means that the price action since mid-day yesterday is minute degree wave (4).  I have also, relabed the Dec 22nd to Dec 31st consolidation as a triangle wave iv-(3), and the pop to 1276.17 yesterday as v-(3).  This means that the minute degree wave (4) wants to retrace back to the prior degree wave iv-(3) area of 1254/1256.    It’s very possible that today’s low of 1263 was the end of wave (4), but it could also just be wave a-(4) and b-(4) was the climb back to 1270 at the end of today.  Thus tomorrow we would be looking for a test of the 1257 to complete wave c-(4), as  I have shown in the blue alternate.  In either case I do still expect a climb to a new high above 1276, to finish out this wave that began back in early July, more that 6 months ago.  Tops are typically volatile and it’s looking like we are getting some of that back in the markets, so the end should be near.  The major degree wave [2]-P3 retrace target has been changed to 1185, based off the 1291 wave [1]-P3 completion target and a 38% retrace.  There is strong pivot suppor at 1165/1177/1187 that should contain the wave [2]-P3 pull-back in late Jan to early Feb.

The key supports to watch for a break-down are the 1257 pivot (also the 13-day EMA of 1255) and then the 1245 pivot.  Once those areas are closed below, then the top of [1]-P3 is likely in place.

SP-500 5-min chart real-time link: http://www.freestockcharts.com?emailChartID=0fe313e1-fa22-478a-a754-ab5dbabf07fa

SP-500 15-min chart real-time link: http://www.freestockcharts.com?emailChartID=9abc3129-7d58-497a-9809-8559c51b137e

SP-500 5-min chart (EOD):

 

SP-500 15-min chart (EOD):

SP-500 60-in chart (EOD):

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