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July 24th, 2012: Update 1 – Afternoon/EOD

Posted by pugsma on July 24, 2012

6:20 pm EST:   Here are the updated 15-min, 60-min and 4-hr charts.  For the primary count on the 15-min chart we have a C=0.62*A target at 1326 (also near the 1324, 50% retrace of major [1]) for tomorrow to complete major [2]-P3-C3.  Or the drop to 1324/26 might only be minor A of major [2]-P3-C3 if major [2] needs more time and price to correct to the deeper 62%/78% retrace targets fo 1310/1292.

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

3:25 pm EST:  With the break of the larger two month long rising wedge today, it’s clear that the primary count should be shifted to what was the alternate (blue) count variant of the leading diagonal for major [1]-P3-C3 ending at 1380 and since then a major [2]-P3-C3 correction has been underway.   The targets for major [2]-P3-C3 are the 50%, 62% and 78% fib retracements of major [1] of 1324, 1310 and 1292, respectively.

The question for the primary count now is when does major [2]-P3-C3 end.   There are two possibilities.  First the initial drop to 1337 could be the end of minor A of major [2] and the bounce to 1353 would be minor B. That would mean the current drop from 1353 to 1329 thus far is minor C of major [2].  The C=0.62*A target is 1326 and the C=A target is 1310. Both of these match the fib retracements of major [1] of 50% and 62% respectively.  It is also possible that this move down from 1380 to 1329 current is only minor A of major [2].  Thus, once complete there will be a minor B of major [2] bounce to 1350-1360 in the next couple of day before minor C of major [2] drops to the 1310 to 1292 target areas in the coming week or so.  Conditions across several key indicators are at or reaching over-sold, so at least a bounce is down very soon.

I have also added back the intermediate term alternate (blue) count to the 60-min chart where P2-C3 is on going from the 1422 April 2012 top.   Thus, the drop from 1422 to 1267 in April-May was only major [A]-P2-C3 and the rise to 1380 in July was major [B]-P2-C3.  This current move down from 1380 would be minor 1 of major [C]-P2-C3.  After a minor 2 of major [C] bounce in the next couple of days, there will be big minor 3 of major [C] drop toward the 1257 pivot support.  Ultimately major [C]-P2-C3 would end at either the 50% fib retracement of of P1-C3 at 1249 or 62% at 1207 some time early this fall.   This the alternate (blue) count would become more likely on a break of the 1291 pivot support.  I consider this alternate (blue) count much less likely than the primary count currently because conditions are already very bearish (like the AAII weekly Sentiment Survery).   I this favors the major [2]-P3-C3 retrace of the primary count that is shaking out the bulls and emboldening the bears, as major wave [2]’s often do.

SP-500 60 min chart (3:06 pm EST):

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