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September 13th, 2012: Update 1 – EOD

Posted by pugsma on September 13, 2012

8:05 pm EST:  After a major upside surprise like today that eliminated the alternate (blue) bearish count with the move above SPX 1460, it’s a good time to look at the charts and reassess the wave count on the primary if needed.  With the daily RSI (14) moving into over-bought territory above 70 and the $NYMO closing at 57 outside its BB of 54, I think the analogy to early November 2010 blow-off IT top post FOMC QE-2 formal announcement fits well here.  Thus, I’m going to modify the primary count to show this move to a 1468 target where [3]=1.23*[1] as the end of major [3]-P3-C3.  This allows for a significant 23% to 38% cooling-off correction for major [4] to unfold over the next few weeks.  The typical targets for major [4] are 1436 (23%) to 1415 (38%).  The 38% retrace to 1415 would represent a -3.6% correction in the SPX and be in-line with the post QE-2 announcement correction from November of 2010.  This major [4] wave correction must remain above the major [1] high of 1380 for the primary count to remain valid.   After major [4] completes at 1415 to 1436, I have a preliminary target for major [5]-P3-C3 at 1529, where [5]=[1]. There is also a possible target at 1599, where [5]=1.62*[1].  There is weekly pivot resistance in the 1524 area and at the October 2007 all-time high of 1576.

Resistance is at the upper blue channel trend line at 1464 to 1470.   Support is at the 1440 pivot area (1440 +/-7 points).

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hr chart (EOD):

SP-500 Daily chart (EOD):

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