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Jan 21st, 2011: Update 3 – EOD

Posted by pugsma on January 21, 2011

Subscription Offer:  I can offer the last week of January for free if you sign up for a $50 paid subscription for the balance of Q1-2011 (February & March).   Just drop me an e-mail at pu_gridiron@yahoo.com to get started.  I will send over a payment via Google Checkout and once paid, I will provide the January Password for protected posts.

Let’s really get this stock market “Correction” going with a my favorite Crash Year’s Song:

5:00 pm EST:   Lots of good spirited debate today in the comments section on whether or not the this major degree wave [1]-P3 has topped at 1296 on Tuesday, Jan 18th.  Subscribers presented their reasons and charts to support it.  There are definitely some valid  points on both sides of the argument.  Ultimately for me the negative divergence price action with respect to Dr Copper and SP-500 and the week-long sell-off in the Nasdaq and Russel-2000 has me in the camp of 1296 being the top of [1]-P3.  But I will leave open an alternate count that calls for slightly higher high near the 1303 pivot next week.  Tops are always tricky and this one is not going disappoint in that regard.

The primary count is that minute degree wave (2) of A-[2]-P3 ended today at 1291.21 with a 78% retrace of wave (1).  Today’s price action looks like a i-ii of (3) with a wave iii-(3) scheduled for early next week.  I’m looking for wave (3) reach at least the 1257 pivot.  And wave A to reach the 1245 pivot.  We need to see break-down and close between the 1278 support area (13-day EMA) to confirm this count.  Note, both the Nasdaq and Russel-2000 already completed closing below their respective 13-day EMA, which is bearish near term.

The alternate count (blue) is that minute degree wave (4) of 5-[1]-P3 is playing out as a large (25 point) contracting triangle that has put in waves A (1271) and B (1291) and is currently working on wave C toward the 1276/1278 support area.   Wave D should reach 1285/86 and then finally wave E should hit about 1278/80.  The wave (5) target would be the triangle target of (1296-1271) + 1280 = 1305, which should be reached before the end of next week.  There is pivot resistance at 1303 and then 1315 that should contain any significant advance higher.

In either case I’m expecting the major degree wave [2]-P3 correction to target the 1206 to 1210 area by mid-to-late February.

I hope everyone has a wonderful weekend.  I’m off to alma mater (Purdue University) to watch the #13 ranged (16-3, 5-1) Boilermakers take on #22 Michigan State at Mackey Arena Saturday Night.   ESPN College Game day is at Purdue this weekend, so it is going to a lot of fun.   I have lower bowl, center court seats.  Boiler Up !!!   🙂

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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