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Keene Little : 6/2/2008 12:16:12 AM

Monday's pivot tables: Link and Link

As I had mentioned at the end of the day Friday, Monday is do or die day for the bulls. Actually it's Monday morning that's do or die. The bulls must rally the market immediately in order to maintain a bullish price pattern (wave count). The SPX 30-min chart shows price closed right at the bottom of a parallel up-channel for last week's rally and just below the bottom of a sideways triangle for the consolidation since Thursday afternoon (could be a throw-under finish): Link

If SPX drops below the Thursday afternoon low (1398.97) it will drop below the start of the sideways triangle and that would negate the pattern (which I'm showing in green as a 4th wave correction to be followed by a 5th wave back up). Confirmation of a more bearish pattern would be a break below the Wednesday morning high (1389.71) since that would overlap the 1st wave high in the bullish wave count (an EW rule violation). The overlap would leave the bounce off last Monday's low as a 3-wave corrective bounce and would be pointing us lower. Therefore the 1389.71 is a key level to the downside.

The DOW is in the same boat. It can't drop below last Wednesday's high just above 12600 otherwise the overlap will mean the bounce off Monday's low will be left a 3-wave correction and the more bearish wave count (dark red) would be the more likely count (60-min chart): Link . But if the bulls can rally the market immediately on Monday then there are some Fibs lining up near 12872-12877 for an upside target.

NDX looks like it really wants to close that January 4th gap at 2051.76, which it missed by 97 cents on May 19th. Right now it's showing signs of bearish divergence as it heads up for a potential retest and double top: Link . From a longer-term perspective it's interesting that it has bumped into resistance at the mid line of its parallel up-channel from 2002: Link

OI Technical Staff : 6/1/2008 9:59:59 PM

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