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Tuesday, January 26, 2010

Tuesday updates

The weekly chart of the SPX has now gone full bore bearish, the MACD has crossed, and the Histogram is in negative territory, after diverging for the last six months confirming the trend change. The RSI and the STO are now on a sell, that is, they have peaked and turned downwards. That trendline from the top does not hurt either, now back where it belongs, Resistance!!!
This one really needs to be enlarged to see the detail!!!

Here is some more bear candy!!!


Three spikes down and out of the Bollinger bands in a row,and every time, the SPX reversed and quickly recaptured the Bands.


The SPX broke up, and out of the most bearish fan-lines today, and settled right back in the middle set. Breaking completely out of both fans to the upside is another signal that the trend has changed.


After the close, Interesting day today, that at one point there became multiple options on the count, but as the close neared with a nice looking impulse wave down, the number of options left dwindled down to two main ones. That we are on the final 5th wave, marked by the Gray 5, or that we have one more quick correction before the final 5th wave, Blue. There still is the option of a large expanding triangle for the 4th wave, but the micro counts make that unlikely at this point. This sell-off seems not to have the energy to break thru 1085 yet, breadth is just not strong enough to consider much more downside before we get a decent correction.
The trend is still down, until we can make a higher high, and that level is 1114.95, also around the spot that a 50% retracement could take us for the 2nd wave up peak.
Breadth for the day ended at 1.78:1, not bearish by any means, and another sign this sell-off is getting tired, as the divergences on the indicators are now showing.
FWIW, In WSS, I stayed in cash overnight, there is not enough reward to want to go short, when we have major support between 1083, and 1086, only 6 points away, compared with the risk of possibility opening gap up, with the 5th being completed in after hours trading.

8:30, FWIW, I went 25% long in WSS, with a stop at 1095, because the SPX broke above the bearish fan that has been resistance this morning, limited upside, so I only took a small short-term position.
9:33, Update on WSS, I exited the 25% long position, 100% cash now, was able to scalp a few points, but risk not with the reward at this point.
Click here for an updated Fib. fan chart!!!
This is where the Fib fans come in real handy, the SPX is fighting at resistance right now, and if it manages to break upwards, you can get a good idea where the next area of resistance will be.


7:04, We have bullish divergences on the RSI and MACD after we made a new low this morning, and this is the one thing I have been waiting for, now the extended 5th count has some real legs to stand on. I have this option labeled in Gray, and if correct, this sell-off, should be completed as a wave 1, leaving us in the 2nd wave up.
FWIW, I closed all my shorts in WSS near the low this morning, 100% cash, until I can find an edge.

3 comments:

  1. HEY COL, Solaris here.

    Hey Bro, do you have the time to do a chart? lol. I would like to see your march 9 Fib fan overlaid with your July 10 Fib fan (and the November?, and also see your two bullish fans overlaid (or three?).
    Thanks, if you can get to it. I check your site all the time. I think your rather good.

    ReplyDelete
  2. Solaris, I will put together something tonight for you :)

    ReplyDelete
  3. Hey Mike. For a completely different short term perspective that is considerably more bearish, what do you think of my potential NYSE count at http://blankfiendsew.blogspot.com/2010/01/nyse-count.html?

    ReplyDelete