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October 5th, 2015: SP-500 EOD Update

Posted by pugsma on October 5, 2015

5:30 pm EST:  After the bullish weekly hammer candle put in last week, the SP-500 gapped open above the Friday close of 1953 creating a bullish weekly gap at 1953-1955.   As long as this weekly gap remains open the ST/IT trends are up.   Also, a potential Zweig Breadth Thrust (ZBT) trigger must now be closely watched.   The ZBT LT Buy Signal is triggered on a close above 0.615 within 10 trading days (Monday Oct 12th) from the Monday Sept 28th low reading below 0.40 (see the ZBT definition below).  A ZBT trigger would be an indication of a LT trend change (i.e. bearish to bullish), meaning a significantly new high above SPX 2135 is likely (i.e. P5-C1 wave extending to the P5=P1 target of 2580 basis P4-C1 low at 1867).

ZBT Chart Link: http://stockcharts.com/public/1130414/chartbook/230315073

ZBT Definition:  http://www.investopedia.com/terms/b/breadth-thrust-indicator.asp

A this point both wave counts are still in play but with the SP-500 price near the 1991 pivot the blue wave count is significantly more likely, meaning the PB-C2 wave is still on-going for the Aug 24th 1867 low.

The blue count is that PB-C2 is playing out as a major [A]-[B]-[C], 3-3-5 wave structure Flat wave, that will once again test the 2019 to 2046 pivot resistance, where the PA-C2 break-down occurred in August.   Once PB-C2 completes, the largest Cycle 2 (C2) wave Primary (PC) will drop much lower than 1867 into next year.   Within PB, the 5-wave structure major [C] wave is underway off the recent 1872 low.   With in major [C], wave minor 1 completed at 1927, wave minor 2 was a 62% Fib retrace to 1894.  Now wave minor 3 is likely complete at 1989, near the  minor 3 = 1.62*minor 1 target.  There should then be a 23%/38% Fib retrace to 1967/1953, followed by a minor 5 = minor 1 move to 2022.  The major [C]=[A] target is 2026 to complete the PB Flat and also the 62% retrace target for PB is at 2033.  Thus, there is a confluence of PB target in the 2019 to 2046 pivot resistance band.

The red count is that major [1]-PC-C2 completed at 1872 and the major [2] counter-trend rally is underway.  The upper end of the major [2] wave 78%/88% Fibonacci retrace is at 1988/2003.   Within major [2], minor A completed at 1927 and then minor B retraced 62% to 1894.  Minor C is underway with a C=1.62*A target of 1983 or C=2.0*A target of 2004.  Note that major [2] must remain below 2021 in order for the red count to remain valid.  Once major [2] completes, there will be a very large major [3]-PC wave lower toward a target of 1666, where major [3] = 2.0*[1].   Ultimately Primary C (PC) of Cycle 2 (C2) should reach the May 2000 and October 2007 highs (support) near 1555 to 1575.   Also notice the large Head & Shoulders (H&S) pattern on the daily chart with Head at 2135, Neckline at 1844, and target of 1844 – (2135 – 1844) = 1553.

SP-500 15-min chart (EOD):

PUG SP-500 15-min EOD 10-5-15

SP-500 60-min chart (EOD):

PUG SP-500 60-min EOD 10-5-15

SP-500 4-hr chart (EOD):

PUG SP-500 4-hr EOD 10-5-15

SP-500 daily chart (EOD):

PUG SP-500 daily EOD 10-5-15

SP-500 weekly chart (EOD):

PUG SP-500 weekly EOD 10-5-15

 

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