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Wednesday, December 16, 2009

Wednesday Updates

The rubber bands are still getting wound tight with the Bollinger Bands, and the negative divergences on the RSI and MACD are still showing that we are in a topping pattern.

After the bell, Most of the early trading was boring until the FED announcement, then things starting moving, closing just slightly in the green. It is possible that was the end of the 2nd wave at the end of the day, but I am mixed on this exact count right now.
The SPX did take out two of the earlier highs, 1113.98, and 1114.74 before selling off. But did not make any lower lows during the sell-off, so the trend is still up.
Important levels tomorrow are 1116.11,and 1119.13 on the topside, and 1105.56, and 1101.41, on the bottom. Breaking these would confirm, or change the current short-term trend.
Breadth for the day was 1.85:1 advancers on average volume. Still not the numbers to get excited about, a mixed day, that was slightly bullish.
** Side note, I will have a very interesting chart to post as soon as Stockcharts updates the daily charts. After the FED meeting, the credit market went wild, with the 30 closing at a yearly high!!!

This is a longer term look, that goes with the two charts below!!!

7:03, Here is the SPX with the same count as the ES-Mini shown below. The spike down in the ES, wave c of B, or the start of 1st wave of C, shows up as a much more pronounced spike then the SPX chart. The Ending, or Diagonal Triangle would still work with the SPX as long as the 1st wave is the longest, per the guidelines. Wave 1 is 35.39 points on the SPX, so as long as wave 3 does not exceed 1121.28 this count would stay valid. The other problem is that wave 3 should be higher then the 1st wave's high of 1119.13.
So that leaves a very tight range for the ending of the 3rd. wave, 1119.14-1121.27, if it were of the contracting variety.
Wave 3 could exceed the 1st wave in size if it is of an expanded Ending Diagonal.

6:25, ES mini update, The Diagonal triangle still looks like the most plausible option out there.

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