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January 20th, 2012: Update 1 – EOD

Posted by pugsma on January 20, 2012

6:30 pm EST:   Nothing really changed today.   I did however decide to make a small minuette degree change with the primary count, as I think today might have been a minuette degree wave iv-(5) of minor 3 of major [3]-P1-C3.   There is no doubt that this minor 3 rally that began from 1202 in mid-December is getting a bit long in the tooth.  And we did get another potential topping signal today with the VIX closing well below it’s lower BB.  If get a VIX closes back within the lower BB early next week, then we’ll have a VIX buy signal and a sell the SPX trigger.

The primary count is that wave iv-(5) of minor 3 of major [3]-P1-C3 completed today at 1309 and wave v-(5) will compete early next week at the 1319 target, where (5)=(1).   When we finally have minor 3 in the books, we can look for minor 4 to retrace the typical 23%/38% of minor 3.   The minor 4 targets are 1289/1292 (23%) and 1272/1275 (35%) basis the end of minor 3 at 1315/1319.  Remember that wave 4′s also like to retrace back to the wave 4 of lesser degree, which in this case is 1278.  For this primary count to remain valid the minor 4 retrace must hold above the minor 1 high of 1267.  The cool thing about this 1267 threshold is that is also the Inverse Head and Shoulders (IHS) neck-line that must hold for a move to the IHS target of 1376 to continue.  So it fits well with both the count and IHS pattern.

 The alternate (blue) count variant to the primary is that wave i-(5) of minor 3 of major [3]-P1-C3 completed at 1315 or will complete at 1319 early next.  From 1315/1319, I’m expecting a 50%/62% retrace to the 1292/1299  area for wave ii-(5) of minor 3.   And I think waves iii-(5) and v-(5) of minor 3 will reach the 1340/1344 area, where minor 3 = 1.23*minor 1.

Support is at the 1303 and then 1291 pivots.  Resistance is at the 1315 pivot and then the 1363 pivot.

Have a great weekend!

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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