Last week, we said that 8/27-28 was a down series with a target of 991 for ESU9. We hit 991 on 9/2/09 and retested it on 9/4/09 at the 1000 level before taking off on rest of the Friday.

Preferred View

– We also said that the the above down time series would be an important tell whether we hit a new high or not. The bull defense line was drawn at 975 for that. This target was held, there by immediately giving us a target of (991-975) = 16 + previous high at 1038.5 roughly, hence 1054.50

– The preferred view says that we are headed to new highs by 9/11/09. This should be the momentum high in the 9/4/09 – 9/17/09 up series. We are currently in 5th of 5th of 5th for the July 12th 2009 wave.  The structure is totally clear to my EW eyes, we basically did an irregular 3rd top starting from the original August 7th 2009 high CIT. With 4 completing on 9/2/09 at 991 (C down). This C down held the A down from 8/7/09 signifying additional bullish strength in the wave structure.

The market is blowing off in 3 nested degrees of 5th’s on dailies. Minimum target is 1054.5+ by 9/11/09.

– Couple of days of sideways action and then we complete the July 12th 2009 wave on 9/17/09

– The 9/17/09 should be considered a High CIT (price neutral = new high OR retest high)

Alternate View

– None

“Chanakya″

(T&C Forums – Knowledge Contributor)