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Wednesday, June 30, 2010

S&P 500 - Time to a rally higher towards 1,078

The above chart shows my preferred short term count. If I'm rigth we saw the bottom of wave 1 of black circle wave 3 yesterday, and should now see a rally higher towards the triangle apex near 1,078. We might even see a rally higher towards 1,083 and even 1,094, before the next big decline sets in.
Yes, support at 1,041 was broken yesterday with a low at 1,035.18, but we closed directly at the support and the five wave decline from 1,131.08 tells us that the first part of the decline is over.

The next best count, which is much more bearish (shown below and not my preferred count) has that wave 1 of black circle wave 3 ended at 1,067.98 and wave 2 at 1,082.57 and that we are now in the powerfull wave 3 down. If this count is the correct one, a clear break below 1,041 should be seen today for a decline towards 1,019 and 980.



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