Aug 9th, 2010: Update 2 – EOD
Posted by pugsma on August 9, 2010
9:20 pm EST: OK, back home in Chicago after a weekend n St. Louis. Not too much exciting happened with the SP-500 day. The SP-500 did manage to make a slightly new higher recovery high of 1129.24 vs. 1128.75.
The primary count is that wave 3-(3)-3-[1]-P3 is underway off the 1107 low on Friday. This count really needs to get cracking the next few days and break the upper boundary on the bearish rising wedge pattern. It needs to break through the 1131 resistance, then break the 1138 level to confirm. The target for wave 3-(3) is about 1150 and wave wave 5-(3) it’s a target near 1170. The 1170 area should be acheived some time during OPEX week, next week.
The alternate count is that the SP-500 is in wave v-(5)-1-[1]-P3. Thus, for the alternate count this whole move from 1011 to 1129 is just wave 1-[1]-P3 for a leading diagonal (bearish rising wedge). So I’m looking for a completing of this wave 1-[1] around 1138 and then a big fall for wave 2-[1] back down 62% to 78% to the 1036 to 1055 area. Leading diagonals like to retrace very deep. This count fits well with the triple negative divergence on the 60-min MACD (see chart below) that may turn in a quadruple negative divergence with a peak to 1138 followed by a hard fall. This count would get the bears really excited as they’d think minor 3 of P3 down had begun and it would suck in a lot of shorts that would be used for the big squeeze in wave 3-[1]-P3 reversal headed back up. I really like this count, and if the 1138 area can not be taken out decisively in the few two days, it will become the primary count.
The FOMC meeting announcement on Wed Tues afternoon should provide the catalyst for one of the two counts listed to play out.
SP-500 15-min Chart (EOD):
SP-500 60-min Chart (EOD):
SP-500 60-min Chart with MACD (EOD):
Lil said
fomc is 1 day mtg announcement tues
pugsma said
Thanks for the correction.
Brian709 said
The FOMC announcement is tomorrow (Tuesday); there are several times a year when the meeting is only one day and that is the case this time around.
Schedule Link:
http://www.rightline.net/calendar/FOMC-Calendar.html
pugsma said
Thanks for the calendar. Tomorrow afternoon works well for discerning between the two counts.
mike f. said
welcome home steve….edwin pitched well…hard loss tonight……a break of what support level after achieving 1138 would lead you to think alt count is in play? 1107 low or break of a support level somewhat higher than that would be the early warning? thanks
pugsma said
hey Mike. I got home just in time to watch Paulie tie it with a top of the 9th inning homer. Too bad the White Sox could not excute and push one more across. They are now tied with the Twins, going into a important 3 game serices at home Tues, Wed, Thurs.
I think you have to play it as a break of the lower trend line (tomorrow morning at 1115 cash) is a breach of the bearish rising wedge, which opens the door to a deep retrace.
mark090709 said
Great Work Steve so far!
mark090709 said
Also GL to your future lawyer
Toad37 said
Thanks Steve, excellent as usual.
ewtnewbie said
Glad you are respecting the MACD divergences. I’m hoping they play out. Thanks PUG.
Nicky said
So much for the 1130′s – markets being decimated this morning. This needs to turn here or the top is in imo. Dollar was the heads up.
Nicky said
Steve – when you update this morning can you address a count which would have ended at yesterdays’ high. Even your more bearish count I thought had us going to 1138 before the fall.
The cycles actually call for a pullback, but argue for a higher high than yesterday first, into the 16th – 20th August and then a move higher into the end of the month. I can’t really see a count that would fit with this.
rivertrade said
Hey guys.greetings from germany!it’s my first time writing here.i think that was a “c” down today…and now the first count is playing out..so start your engine..rocket to s&p500 1200. isn’t that possible?
dcuttell said
testing
AS2009 said
Pug – with the selloff – is it confirmed that the alt is in play or can the primary still be valid ?