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July 26th, 2012: Update 1 – EOD

Posted by pugsma on July 26, 2012

6:15 pm EST:  With today’s SPX price move to the 1363 pivot breaking the 62% retrace, it puts the primary count that major [2]-P3-C3 ended at 1329 as leading count.  However, the RUT and Nasdaq were relatively weaker than the DJIA and SPX today, so we did not have a completely convincing sign of leadership.   We’ll have watch closely over the next few days to see if the SPX can hold above support around 1348 and build a higher base for a move above 1380 and the 1386 pivot resistance.

For the primary count this 5-wave impulse move up from 1329 to 1363 is minor 1 of major [3]-P3-C3.   Wave minor 1 could be over at 1363 today or if wave (5)=(1), then we get a target of 1367 for the end of minor 1 for early tomorrow morning.    After minor 1 ends, I’m expecting a relative shallow minor 2 retrace of between 38% and 50% to 1353 to 1348 to hold above the rising 13-day EMA and 34-day EMA support.  From there, minor 3 of major [3]-P3-C3 should target the 1440 pivot, where M3=2.62*M1.  Note that there is still a chance for the primary count variant to play-out there.  This variant on the primary count is that this move up the 1363 pivot is only minor B of major [2]-P3-C3 and there will be a minor C wave drop to 1316, where C=A to complete major [2].   The rising 200-day SMA is now at 1317 and should support this primary count variant.  This count is somewhat less likely now that the 50% retrace area of 1355 was exceeded for minor B.  However any break below support in the 1348 area could still lead to the drop below 1329 to complete major [2] near the 1316 C=A target.

The alternate (blue) count is also on life support at this time.  The DJIA nearly breached its July 19th high of 12,977 today (SPX Equiv of 1380).   The DJIA often leads the SPX and any breach of DJIA 12,997 for minor 2 of major [C]-P2-C3 of this alternate (blue) count will invalidate the count.  So watch the DJIA to tip its hand even before the SPX breaches the 1380 limit of minor 2.  For this alternate (blue) count to really be taken seriously, there must be a solid break of the rising 200-day SMA support near the 1315 pivot.   It will take an aggressive minor 3 of major [C]-P2-C3 wave down move to do this, but that is what a minor 3 of major [C] should do.  Major [C] waves down are just like major [3] waves down in that they take no prisoners on the way to their target area, in this case the 1256 pivot.

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

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