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Jan 14th, 2011: Update 4 – EOD – Top of [1]-P3 ?

Posted by pugsma on January 14, 2011

In honor of MLK, please enjoy this U2 Classic – Pride – In the Name of Love!

Annual-2011 and  Quarter 1-2011 Subscription sign-up is officially closed.  The next sign-up period for Quarter 2-2011 is March 21st-31st, 2011.  If you missed the sign-up and still want to get in,  I will do a few manual sign-ups through Sunday Jan 16th, 2011.  Send me an e-mail to pu_gridiron@yahoo.com and request a payment link for either an Annual or Q1 subsciption.

4:40 pm EST:  The SP-500 closed today at a new recovery high of 1293.24.  It’s been an impressive 6.5 month rally to this point from the P2 low of 1011 in late June 2010.  For major wave [1]-P3, the minor wave 5 = 1 target of 1291 has been met, along with minute wave (5) = (1) target of 1289 and the minuette wave v=i target of 1290.  The daily RSI (14) of 76.71 shows negative divergence with the Nov 5th, 2010 RSI (14) of 80.  Dr Copper is showing negative divergence with the last three SP-500 price highs of 1276, 1287 and now 1293.  The SP-500 closed outside of the upper Bolling Band (BB) like it did just before the Nov 5th, 2010 peak of minor 3 of [1]-P3.  The VIX also closed outside the lower BB.   All of this points to a significant top of major [1]-P3 being very near this area.

For the primary count I can count 5 small waves for v-(5) up off the 1280 low from Thursday.  This could mean that the minor 5 of major [1]-P3 was hit today at 1293.24.   Of course the market will have to gap down on Tuesday, Jan 18th and not make a new high for this count to be correct.

A slight alternate to the primary count, is that wave iii-(5) is sub-divided differently and it’s peak was reached today at 1293.24.   This would imply a slight pull-back or consolidation above 1286 for wave iv-(4) early next week and then one more push higher for wave v-(5) that could reach the 1295 to 1300 area. 

In either case, I’m expecting major [1]-P3 to end very soon a major [2]-P3 retrace to begin.  The targets of interest based of the 1293 [1]-P3 high are 1227 (23% retrace), 1207 (30% retrace, and the same as major [2]-P1), and 1184 (38% retrace).  Even tough wave 2 will typically retrace 50 to 62%, I don’t foresee major [2]-P3 retracing that deep in this bull market.

Enjoy the MLK Holiday weekend.  I’ll be back with a new post on the morning of Tuesday, Jan 18th.

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 Daily chart (EOD):

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