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May 31st, 2011: Update 1 – Pre-market

Posted by pugsma on May 31, 2011

7:15 am EST:  ES Futures are exploded to 1344 (1346 cash equiv.) overnight.

The alternate count (blue) labels become the primary count with the major [4]-P3 bottom ending as a running flat at 1311.80 on May 24th when ES dipped to 1302 (1304 cash equiv.) in overnight trading.  This was a classic bottom that has been formed many times during this great bull run off the once in a lifetime low of 667 in March of 2009.   Lows that form during ES overnight and are never revisited the next day in the cash market have marked many of the best buying opportunities of this bull market and this one was no different.  We discussed this classic set-up here the day and evening it was happening.

We are counting the first 5 minute waves off the 1311.80 bottom.   Assuming wave (4) of minor 1 of major [5]-P3 ended at 1328.93 on Friday. then wave (5) should reach 1343, where (5)=(1) or 1351, where (5)=1.62*(1).

The initial target for major [5]-P3 is 1386 and this could easily be reached in the first week or two of June.  The first two trading week of June are tradition very bullish in the 3 year of the 4 year Presidential Cycle.   And with QE-2 continuing through the end of June it’s very possible that major [5]-P3 could extend for several weeks reaching the 1440 pivot.

There is resistance at the 1342/1344 gap and then the 1354/1357 gap and 1363 pivot.   Support now rises from the 1315 pivot to the 1330 area.

The charts will be updated to reflect the alternate count (blue) as the primary count in the next update later today.


SP-500 15-min chart (EOD, 5-27-11):

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