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Wednesday, November 18, 2009

Wednesday Updates

After the bell, WOW, I thought yesterday was boring, the market really moved in a tight side-ways action all day, never making a higher high, nor a lower low, until the last few minutes as the SPX finally broke up through the trendline of resistance.
I posted the Russell chart so you could see the MACD and the RSI. On the MACD it is in a triangle with plenty of room now for upside movement, and the same on the RSI. The consolidation of the last two days has burned off the overbought conditions and left it ripe to pursue that final push to complete the 5th wave of "C"up.
The Bollinger Bands on the SPX continued to tighten into the close. It has been a long time since I have seen the bands so tight. Click here for the chart
Decliners slightly beat out advancers, 1.18:1, on really light volume.
The Omen, 163 new highs, 2 new lows.

8:18, The indexes are all bouncing back in forth, in what looks more like a 4th wave, rather then part of a 2nd wave of a sell-off. The Bollinger bands are tightening even further as consolidation is taken place. I expecting a large move up once this 4th wave wraps up. It will be interesting to see if the VIX moves with the SPX, and stays above the trendline, or behaves normally and makes an inverse move. I have noticed that at times during OPEX week, the VIX will move with the indexes.

8:02, The VIX is now sitting on the trendline of support. This could be a close one as the SPX seems to want to make a higher high for the final wave v of 5.


  1. thanks for the update. what is your target for wave 5?


  2. Howdy Cementzak, I do not have a hard target, but 1120 would fit nicely. It is really a guessing game to figure out how far a 5th wave will travel. They have a habit of truncating at major tops, and sometimes they can overthrow in a last gasp. 1120 would be close to the trendline without breaking through it, but as time goes by, the level of that trendline rises.

  3. great charts col, always useful and helpful, thanks!

  4. Thanks Adan, I always appreciate your comments :)

  5. Col, for me the timing just doesn't work for a crash or a sizable pullback. I think we have a move to 1120 tomorrow and everyone loads the boat short, but the squeeze will come back in in a week or so

  6. Agree, I am not sure of the size of the next sell-off either. I took P2 of of the chart just for that reason, and plan on taking it one step at a time using TA more then the EW. I do expect the Russell to sell down to the trendline, and then will wait and see what happens after that.