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Keene Little : 5/20/2007 10:50:06 PM

The interesting thing about where SPX stopped on Friday, and as I've been pointing out on the 60-min charts--1522 could be tough resistance. This is the Fib projection where the 5th wave = the 1st wave in the move up from October 2005 as shown on this daily chart: Link

The 60-min chart shows the potential for a pullback to be followed by another push higher with the light green path taking it all the way up to near 1545 by the end of the month. A reason why I'm showing that potential is because of another Fib projection that is shown on the daily chart at 1542.53. That one is based on two equal legs up in the rally from March 2003, better shown on this weekly chart: Link

The interesting thing about that projection is that another Fib relationship between the waves in the move up from October 2005 is where the 5th wave = 62% of the 1st through 3rd waves, shown at 1545.36. This is a common Fib relationship and the fact that it's right on top of the other one makes me think that's where the market may head if it can get through the 1522 area.

The bottom line is that the rally could have ended at Friday's high and you need to be ready for that possibility. But if we get another sloppy choppy sideways/down pullback then new highs should be expected and that's when I'll be watching to see if the pattern starts to point to that higher Fib projection.

Keene Little : 5/20/2007 10:46:52 PM

The high in the DOW as compared to the one on Tuesday has a bearish divergence and as labeled in the dark red wave count, that fits as the 5th wave of the ascending wedge. I don't quite see the same thing in SPX so it's not a good enough sell signal here but it does warn of the potential that we could see a sell off start first thing next week. Notice too that the DOW is very close to a Fib projection at 13564 for the 5th wave of the move up from March. We're getting close.
DOW 60-min: Link
SPX 60-min: Link

NDX is still a mess but nearing potential resistance by its downtrend line from May 9th, currently at 1900. What the larger pattern is is still a guess but a break above 1900 would be bullish for at leat a run probably up to 1915. Link

The RUT looks bullish with the break out from its descending wedge today. I suspect we'll see it rally at least to the 828 area where it will meet Fib and trend line resistance. A rally above 831 would likely mean a push up to at least 838-840. It now takes a break below 813 to put it back on a bearish path. Link

CME is hanging out on top of its 200-dma but not looking like a pillar of strength here. It takes a break of its downtrend line, currently near 550 and confirmed with a break above 565, in order to get this more bullish. But it takes a break below its last low at 497 to confirm the next leg down is in progress instead of just a pullback that might close its gap. Link

GOOG is struggling with its broken uptrend line from August 2004, still. It has been hanging around this trend line since the beginning of March. Let go of it already! A break of the top of its down-channel, near 485, and above 493 puts it on a bullish path otherwise a break back below 457 would be bearish (just watch the 200-dma coming up to 452). Link

Keene Little : 5/20/2007 10:43:54 PM

End of day re-posts:

Monday's pivot tables: Link and Link

As I was going through the weekly charts for the weekly values in the pivot spreadsheet I couldn't help but notice the YM weekly chart. Does this scare anyone besides me? Link As a comparison, here's the same chart for ER: Link

OI Technical Staff : 5/20/2007 9:59:59 PM

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