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May 24th, 2012: Update 1 – Mid-day/EOD

Posted by pugsma on May 24, 2012

5:05 pm EST:  The direction of the market for the next 4 to 6 months depends on where 1292 or 1357 is breach first.  A break of 1292 confirms the primary count with the SPX headed to 1207 by the fall of 2012.  A break above 1357 confirms the 1st alternate (blue) count with the SPX head to 1440 or higher by the fall of 2012.

The primary count is that wave (c) of minor 4 of major [A]-P2-C3 is underway.   Minor 4 could play out as either a contracting triangle if the wave (a) high of 1328 is not breached during this (c) wave or a simple Zig-Zag on a move above 1328 that targets 1333 where (c)=(a) to 1354 where (c)=1.62*(a).  Once minor is complete a move down towards 1274 for minor 5 of major [A]-P2-C3 is next.   Note a move above 1357 will invalidate this primary count.

The 1st alternate (blue) count is major  [4]-P1-C3 is playing out as a large contracting triangle. The move down to 1292 completed minor A of major [4] and now a bounce to 1363 to 1372 for minor B is underway.  Ultimately the minor E wave of major [4] should finish above 1292 and launch a major [5]-P1-C3 wave higher toward at least 1440.  Note a move below 1292 will invalidate this count.  There is nice bullish [2]-[4] up channel that has formed off the 1075 price low from Oct 2011 and as long as 1292 holds this 1st alternate (blue) count looks good.

SP-500 15-min chart (EOD):

1:15 pm EST:  Here is the updated 60-min chart.

SP-500 60-min chart (1:11 pm):

12:10 pm EST:  Here is the updated daily chart.

SP-500 Daily Chart (12:06 pm):

11:00 am EST:  Here are the three count options I will be tracking the rest of this summer.  They vary widely in their outcomes, so it will be important to watch close at the key adjustments points on the charts.

1) Primary (white) count is that P2-C3 is unfolding as an [A]-[B]-[C] Zig-Zag headed for a 62% retrace of P1-C3 at 1207.  Right now we are in the minor 4 of major [A] leg and there will be one more drop to the 1274 area to complete major [A].

2) 1st Alternate (blue) count is that P1-C3 is in a major [4] contracting triangle and will still make a new high above 1422 for major [5]-P1-C3.  The low at 1292 ended the minor A of major [4] leg and there will be a B wave leg up to the 1363 to 1372 area next.

3) 2nd Alternate (red) count is that Cycle 2 (C2) is still unfold since May 2011 and the final Primary C (PC) wave has begun from 1422 and is headed for a C2 low of between 950-1000.  Right now we are in minor 4 of major [1] and there will be minor 5 leg down to 1274 to complete major [1].

SP-500 4-hr Chart (10:50 am):

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