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Friday, January 15, 2010

Friday updates

Here is something interesting!!!
The McClellan Oscillator might of established a new short-term trend, down, it also closed below "0", for the first time in six weeks.

After the bell, I smell a whiff of blood in the air!!!
We ended with what looks like a completed 5 count impulse wave down, but the bear in me is being very cautious about calling that a top was put in yesterday. I have that funny feeling that we might still be in a 4th wave, with "C" of 4 completed as per my alternative count, with a higher high in the cards. I will feel much better if we have some serious follow-thru come Tuesday with increased sell volume and the breadth to match. It should be very obvious Tuesday if we are indeed in a wave 3 down, the blood will be splattering on the streets as the bulls rush to find bidders!!!
We did break below the trendline of support from the November 2nd low, as well as from the July low, then made an important lower low today, breaking below 1131.77, and we also broke-out of the bullish Fib. fan, so for now the short-term trend seems to be down. The next level of support is 1114.81, the low printed on December 31st.
Breadth for the day ended at 2.51:1, decliners, on increased sell volume, not very exciting, and in no way confirming a new long term bearish trend in place.
I did add a small set of bearish Fib. fans to the chart right at the close- Click here for an updated look at the Fib fan chart
As soon as Stock charts updates their end of the day charts, I will start posting the interesting ones.

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8:08, Currently breadth is running at 3.39:1, decliners, a sight for sore bear eyes, we just need this to follow through. The number is respectable, but not yet convincing that the trend has changed. I would like to see it above 5:1, minimally to start getting excited about this sell-off having some legs.
Click here for a updated look at the Bollinger band chart!!!
7:54, The SPX, is totally outside of the Bollinger bands, when this condition arises, normally it will quickly reverse and recapture the bands.
7:30, I always keep an eye on Goldman Sachs, you can even find the chart in the second page of my charts, it is one of those leaders that need to be watched, a very important indicator of the over-all health of the market. And it is getting dangerously close to breaking support of $160.20, making a lower low. The last post I did of GS, was The Power of Trendlines, back on October 21st, and since then it has been in slow sell-off.

7:15, Here is the big question on my mind, is this still part of the 4th wave, ie, wave "C" of 4? Only time will tell, but I do see the possibility. Yesterday the Russell never did make a new high.
Click here for an updated look at the Fib fan chart, and please cast a vote!!!
7:08, The bullish fib fan is now at risk of being broke to the downside.

6:55, Gap down open, time to start watching support levels for signs that the trend might of changed, we have already made some lower lows on the micro level, now the important level of support, 1131.77, followed by 1114.81 would definitely change the short-term trend to down.
FWIW, If 1131.77 gets taken out, I will increase my shorts from currently 25%, to 50% in WSS.


  1. great work as usual, Michael!!
    Have a nice weekend!

  2. On January 19th, American society may change as we know it. Either Scott Brown or Martha Coakley will win the Senate race in Mass. If Scott wins, then the healthcare legislation, as well as other legislation, will not go through. This seat is the 60th vote and it would kill the legislation if Scott were elected. WLP and many other healthcare providers would instantly sell off maybe 10-20% or more.

    This is the critical event that the market is waiting for, the Black Swan, where we do not know exactly how it will effect the market…

  3. Hey Col, as always great work man! That is a very nice development on the McClellan oscillator! :)