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Tuesday, December 22, 2009

Tuesday updates

Here is the updated Fib. fan chart, the SPX is stuck between support and resistance of a bullish fan. There will be a lot of support to break through for any sell-off right now.
After the bell, The Bollinger Bands have tightened back up again, which means tomorrow could be interesting.
The SPX did make a new high, but the Russell fell short of a new one by $1.10.
Short term support on the SPX is 1115.31, and 1112.57, with 1094.11 next in line.
Breadth for the day was 1.69:1, and is getting weaker by the day!!!
Lots of negative divergences on the charts, that is the MACD and the RSI contunie to make lower highs, even as the SPX was making higher highs, normally that is a sign of a trend change in the works.
8:11, The Dollar is again on a tear today, currently at 78.71. (this chart is a daily and not updated). Again we are seeing the Dollar and the equities moving together, if they should move back to an inverse relationship, the equities are going to be hit very hard it!!!

8:02, The spike in volume is incredible on the SPX daily chart, makes me think the end is close by. Throw-overs and high spikes in volume go hand in hand with trend changes and typically occur in the late stages of the final wave.
The RSI is also back up at trendline resistance, with both it and the MACD still negatively diverging.

7:52, I have changed the count on the Russell, to a triple zig-zag, the same as I have on the SPX. It has yet to make a new high, but the retrace for the second wave is just too much for me to consider the 1-2 down count I had. The russell might of had a throw-over this morning out of the rising bearish wedge, was is normal and expected. The MACD has reached trendline resistance, and if it holds, this should be very close to a top for the Russell.

7:43, The SPX has made a new high, but the breadth of the move was very weak, 1.94:1, advancers. It also has laid out a nice five count impulse wave up. But there is negative divergences on the RSI and MACD. The RSI normal peaks at the top of the iii of 3 wave. As far as the larger count, I have no prefered options with the amount of counts available right now, the odds of being correct are just too low to even try, so for now I am putting EW on the back burner until things become clearer and relying more on the TA.

7:34, The VIX made a monster spike down, making a new low, but I am a little suspicious about the look of it, wondering if Stockcharts has a misprint, it would not be the first time.


  1. I'm pretty sure that VIX number is a misprint; some data providers have scrubbed it out.

  2. regarding, "...the SPX is stuck between support and resistance of a bullish fan. There will be a lot of support to break through for any sell-off right now...." -

    tempting the contrarian gods ;-) and looking at dec 16/17, when the chart looked remarkably the same, i wondered, what were the fib fans and support to break through then, before the index tumbled approx 20 points?

    'course, i don't "expect" anything, except...anything - the way the last few months have gone - or not gone ;-)


  3. Adan, the last time, there were not the number of bullish fans to break thru that we have this time :)

  4. very good thing to know, thanks michael ;-)

  5. notice huge spy call buying at the close

  6. good to know whitemule, especially since i'm 200% short.

  7. Whitemule is right about the call volume, but it isn't necessarily a bullish sign. (And let's be clear, it's call VOLUME not call BUYING, since there is someone on each side of the transaction). For example, it could represent the opening of a bear call spread, or the closing of a bull call spread, both of which represent bearish points of view. It could also be SELLING, not buying, by large institutions - for example, there was huge volume in deep in the money ETF calls today, which could represent institutions laying off market risk without recognizing the sale for tax purposes until next year.

    My point is that without knowing the structure of the transactions that comprised all that call volume, we really don't know if it's a bullish or bearish sign.

  8. wave 3 should not be shorter than wave 2