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July 17th, 2012: Update 1 – EOD

Posted by pugsma on July 17, 2012

6:10 pm EST:   Today the SPX showed impulsive strength up to 1365 this afternoon after a quick dip to 1345 this morning.  The alternate (blue) count has now been stretched to the limit with a 78% retrace for minor 2 of major [C]-P2-C3.   Any move higher above this area will break the down trend-line from the May 2nd high at 1415 down through the July 2nd high of 1375 as seen as the down sloping yellow line on the 60-min and 4-hr charts.  A break of this line will likely lead to the melt-up scenario shown for the primary count taking the SPX well above the 1440 pivot.

The primary count is that wave (2) of minor 3 of major [3]-P3-C3 completed at 1345 today and (3) of minor 3 of major [3] up has begun.   The move up to 1365 looks like a 5-wave impulse for i-(3) and we could now see consolidation for ii-(3) in the 1355 area before iii-(3) up kicks-off towards 1407.  This iii-(3) impulse up should break above the large blue base channel (i.e. potentail bear flag pattern of the alt (blue) count) shown on all time-frame charts.  It’s important for the bulls and the primary count that next move up breaks this base channel during wave (3) of minor 3 of major [3] to show the strength of the move higher.   Finally a break below 1325 will invalidate the primary count and would mean the alternate (blue) is likely playing out to the 1249 target area.

The alternate (blue) count is that minor 2 is complete at 1365 or will hold the 88% retrace at 1369 tomorrow, before wave (1) of minor 3 of major [C]-P2-C3 down begins.  The first target for wave (1) is at lower trend line support of 1332.  Minor 3 should reach the 1283 area where M3=1.62*M1 and minor 5 should reach at least the 1249 target to complete major [C]-P2-C3.  Note: a break above 1375 will invalidate this alternate (blue) count and require a change from a single ZZ to double ZZ up to the 1396 area.  There is IHS that measure to 1396 and the upper blue trend-line of the potential bear flag channel is near 1396.   This final move to 1396 would become the end major [B]-P2-C3 target for the double ZZ count modification.

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

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