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December 14th, 2011: Update 1 – Mid-day

Posted by pugsma on December 14, 2011

1:05 pm EST:    The SP-500 price action since the 1267 Dec 5th high appears corrective and not impulsive and is following a well-behaved down channel with overlapping waves, which is indicative of a minor 2 of major [3]-P1-C3 correction.   However, if the price action begins to look impulsive downward and breaks beneath the pink down channel, then we likely have a re-test of at least the 1158 low from November and maybe even the 1075 low form October.  The former meaning Major [2]-P1-C3 is not yet over and the later case would mean that Cycle 2 (C2)  is not over and the SP-500 price could drop to the 1000 to 956 level.    The market is a very critical juncture here and a break of the 1187/1177 pivot are would mean a very bearish intermediate outcome is unfolding.

Primary count is that minor 2 ended today at 1209.83 as a double ZZ just below the 50% retrace of minor 1 target of 1213.  It will take a move back above the 1229 pivot and then above 1237.17 to confirm this.  Basically, the SP-500 needs to quickly regain the key 50-day SMA (1226), 34-day EAM (1228) and 13-day EMA (1233) moving average ribbon

Alternate (blue) count is that wave iii-(y) of minor 2 ended at 1209.83 and wave iv-(y) is underway with targets of 1223/1227 (38%/50%) retrace.  From there wave v-(y) of minor 2 will drop to the 1200 area, which is the 62% retrace of minor 1.   And it’s possible that this alternate count for minor 2 could challenge the 1187 and 1177 pivot support, which is the 78.6% retrace at 1181.

Support is at the 1187 and 1177 pivots.  Resistance is at the 1219 and 1229 pivots.


SP-500 5-min chart (12:45 pm):

SP-500 15-min chart (12:45 pm):

SP-500 60-min chart (1:10 pm):


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