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January 23rd, 2014: SP-500 EOD Update

Posted by pugsma on January 23, 2014

5:15 pm EST:   The large drop in the SP-500 form 1845 to 1820 today has produced a revision of the primary wave count.

The primary wave count is that wave (2) of minor 5 of major [5]-P3-C1 is playing out as a flat.  The top wave (1) of minor 5 occurred back on Dec 31st at 1849.  Since then the SP-500 has been tracing out a 3-3-5 wave flat with a-(2) down to 1815, b-(3) up to 1849 and now c-(2) down to 1820, thus far.  The c=a target is at 1815 for this flat.  It’s possible that c-(2) ended today at 1820, but as long as 1832 is not breached to the upside, there is chance for one more wave 5-c-(2) down to 1815.  Once wave (2) is confirmed complete on a breach above 1832, then wave (3) up will be under way and headed for 1909, where (3)=1.23*(1).  The minor 5 target is at 1935 ,where minor 5=1.62*minor 1 to complete P3-C1 sometime in March-April.   Note: that theoretically this wave (2) of the primary count remains valid above the minor 4 low of 1768.  So should wave (2) break below 1815, there is a secondary target for the flat at c=1.62*a = 1793, which is also near the 62% retracement of wave (1) at 1799.

The alternate (blue) count has P3-C1 complete at 1851 and the P4-C1 correction is just beginning.  There is a double top potential at 1850 that measures to 1780 which would be the minor 1 of major [A]-P4-C1 wave down before a minor 2 bounce.  I’m looking for wave (1) of minor 1 to reach the 1815 pivot before a wave (2) bounce of 50% to 1833.  Today could have complete wave (1) at 1820 or there could one more push down to 1815.  Once wave s(1)-(2) complete, waves (3), (4) and (5) should take minor 1 down to the double top area of 1780.   Note that there is also a large potential head and shoulders topping pattern (shown on the 60-min chart) that began in late November that should help take the major [A]-P4 wave down to about 1687 to 1730.  Ultimately the P4-C1 correction should be at least a 23% fib retracement of P3-C1, which will drop the SP-500 back down to the 1687 pivot area over the next 6 to 9 months.

So the primary count remains valid above 1768 and the alternate (blue) count remains valid below 1851.  However a breach of the 1815 area would at least make the alternate (blue) count about as likely as the primary wave count.

SP-500 15-min chart (EOD):

PUG SP-500 15-min chart EOD 1-23-14

SP-500 60-min chart (EOD):

PUG SP-500 60-min chart EOD 1-23-14

SP-500 4-hr chart (EOD):

PUG SP-500 4-hr chart EOD 1-23-14

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