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July 28th, 2011: Update 2 – EOD

Posted by pugsma on July 28, 2011

6:15 pm EST:  Like  I said in the comments last night, the primary and alternate count only differ slightly in the near term and the 1315 pivot resistance will help us separate them.  Well today with the move to 1316.32 and then a failure to move higher and close above the 1315 pivot, the market moved back lower and broke the 1303.49 low from yesterday, closing below the 1303 pivot.   This allows me to merge the primary and 1st alternate into one count now in the near term.  Both counts are looking for wave (5) of minor C of major [2]-P5 to complete near the C=A target of 1287.   However, with the new low below 1303.49, we have a clear 5 waves down off 1347 and this minor C of major [2]-P5 can end at any point between today’s of 1299.16 and the 1287 idealized target zone.   From this end of major [2]-P5, we’ll be looking for an aggressive move up to the 1372 pivot region for major [3]-P5 of the 1st alternate (blue) and toward 1400/1410 for the primary count (white).   Again the difference is that the 1st alternate will stall near 1372 as an Ending Diagonal (ED) plays out to complete P5 between 1372 and 1386., while the primary count is that P5 will not end until the 1440 pivot as 5 wave impulse.

The 2nd alternate count (red) has to be given serious consideration on a decisive break below the 1291 pivot area (1287 is key and the 200-day SMA is at 1284).   Today’s rise to 1316.32 could be labeled minute (2) of minor 3 of major [3]-PA and it was the last “getting off point” before a major market collapse.    The next move down, that may have begun late today, will be a devastating (3) of 3 of [3]-PA.  The first target for the completion of minor 3 of major [3]-PA is 1249, where minor 3 = 1.62*1.   This 2nd alternate count (red) is still of low probability in my opinion because of the extreme over-sold condition of the McClellan Oscillator at -77.54 and the VIX could be about to trigger a “sell” signal (buy equities) if it close back inside it’s lower Bollinger Band (BB).   But often a market collapse will happen when it’s least expected from over-sold conditions.  So it’s important to be prepared in the event that the 1291 pivot area breaks down in the next few days.

Support is at the 1291 pivot and then the 1257 pivot.  Resistance is at the 1303 and 1315 pivots.

The next 2 to 3 trading days will likely decide the fate of the 2+ year bull market.

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

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