May 21st, 2010:

5:05pm EST:  Strong looking reversal day from the 1056 low to the 1090 high and a positive 16 point close at 1087. I have the primary count as wave c-(4)-[C]-P2 with targets at 1091 (38%) to 1102 (50%). Following wave (4), I have a final wave (5)-[C]-P2 headed down towards targets between 1032 {wave(5)=(1)}, 1021 (C=A) and 1010 (38% P1 retrace).

However, with the strong reversal today the alternate count gained some momentum. And holding above the Feb 5th, 2010 low of 1045 is bullish. The alternate count has wave (5)-[C]-P2 finished at 1056 today and SP-500 have begun the next bull leg higher. Key resistance levels to cross are 1095, 1105 and finally 1115. I have the alternate count at the end of the day as wave iii-(1)-1-[1]-P3. So the SP-500 is positioned for a large gap higher on Monday to clear resistance.

Have a great weekend.

SP-500 5-min Chart (EOD):

SP-500 15-min Chart (EOD):

SP-500 60-min Chart (EOD):

SP-500 Daily Chart (EOD):

1:40pm EST:  I have this bounce up this morning as wave (4)-[C]-P2 of the primary count. Targets for wave (4) are 1091 (38%) and 1102 (50%). The wave (1) low was 1115, so any move above 1115 confirms that this [C]-P2 wave down is over. A possible wave (5)-[C]-P2 target is 1032 {for wave (5)=(1)}. There is also the C=A target of 1021 and the 38% P1 retrace target of 1010.

For the alternate count, I have 1056 as the end of wave (5)-[C]-P2 and the P2 correction is over. The SP-500 would be starting wave (1)-1-[1]-P3 up. For this count to be correct 1056 should not be breached again. The price has broken up and out of the bullish falling wedge and a move above resistance in the 1095 to 1105 area would be further confirmation. Final confirmation would be a move above 1115. Another key feature of this P2 has ended alternate count is that the the Feb 5th, 2010 low of 1045 was not breached. Higher lows is a key feature of bullish market behavior. The Feb 5th, 2010 low of 1045 was above the Nov 5th, 2009 low of 1029. So the market would be in a position of continuing to make higher lows during the corrections.

SP-500 15-min Chart (1:20pm):

8:42am EST:  ES Futures have fallen to 1059 (1061 cash). For the primary, I have the count as wave-v-(3)-[C]-P2. Targets for wave-v-(3) are 1065 (v=0.62i) and 1047 (v=i). 1047 looks more likely if the market opens at or near the low of the ES Futures. The alternate count has this as wave (5)-[C]-P2 and the 1047/1050 will be the end of this down wave.

SP-500 ES Futures 60-min Chart (8:12am):