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January 13th, 2012: Update 2 – Afternoon/EOD

Posted by pugsma on January 13, 2012

4:40 pm EST:  Primary count is that wave (4) of minor 3 of major [3]-P1-C3 bottomed today at 1178, where c=1.62*a, as single Zig-Zag off the 1297 wave (3) high.   Wave (5) of minor 3 is underway with waves i-ii in the books at 1187 and 1181.  The target for wave iii-(5) is at 1307, where iii=2.62*i.  I have an initial target for wave (5) of minor 3 at 1319, where (5)=(1), but there is an extended wave (5) target at 1344, where (5)=1.62*(1).    One thing to watch for with this wave (4) of minor3 count is the potential for a deeper retrace to 38% (1272) or 50% (1263) as a double Zig-Zag.  In this variant of the primary count the move up to 1289 late today is a wave (x) and the next move will be a similar 19 point drop down to 1270 for wave (y) of (4).   Note, that the primary count remains valid above the wave (1) of minor high of 1243, which is near the 50-day SMA.

The alternate (blue) count is very bearish.  It assumes 1297 was the end of Primary B of Cycle 2 and now Primary C of Cycle 2 down to 1000 on the SP-500 is underway.    For this alternate count I’m looking for wave (3) of minor 1 of major [1]-PC-C2 to reach 1263, where (3)=2.62*(1) and wave (5) of minor 1 to reach the 1257 pivot.  There is a confirmed bear-cross of the 4-hr MACD today and the VIX looks to have bottomed at 20.05 that indicate a major trend change could be underway per this alternate count.  We’ll need to see a daily MACD bear-cross and break of the 1245 pivot to confirm this alternate count.

I still strongly favor the primary count of the alternate count as long as the 1243 level holds, which also corresponds to the 50-day SMA.

Support is at the 1257 pivot and then the 1245 pivot.  Resistance is at the 1291 pivot and then the 1303 and 1315 pivots.

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

1:55 pm EST:  The VIX has broken above its bullish falling wedge with a MACD bull-cross and positive divergence. VIX could target the 25.0 to 27.0 resistance area next.  This could send the SP-500 considerably lower in price.

VIX Daily Candles (1-13-12):

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