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Thursday, January 21, 2010

Thursday updates

Here is a quick look at the Fib. retracement using 1150 as the top.
The VIX is now cleanly outside of the bearish channel.

The Dollar chart has that nice looking wave 3 up going now, it is on fire!!!


After the close, Yep, Mr. market did it to us again, left us guessing at a MAJOR crossroad, closing right at the low of the day on the 50 day MA, with three completed waves down, and right on top of some of the heaviest support of the whole rally. Tomorrows open should be very telling, we either smash through 1114 with vengeance in a iii of 3 down wave, or we start making higher highs in a bullish move that is destined to make new highs.
I have the bearish count on the SPX as a 1-2, 1-2, down because the RUT, NDX, and the TRAN, all had their 4th waves enter into the price territory of the 1st waves, so this change is required to keep a valid bearish count alive.
Ohhh, this is where flashbacks of the nightmares begin and that evil number of 956 keeps popping back in my head, so to be on the safe side, I have added an alternative bullish count.
Breadth for the day ended at 3.68:1, decliners, not really bearish at all, but on heavy volume.
I will do some more updating after Stockcharts finishes their updates on the daily charts later this afternoon.
FWIW, I stayed in cash in WSS through the close, and see what the opens gives us, then look for an edge. It was the safest bet to take profits right on top of that support and wait for Mr. market to confirm the move is still bearish before going back short.
11:30, On the Russell, the 4th wave has entered the 1st wave, leaving only one possible bearish scenario, that we now have a 1-2, 1-2, down going. I added that count to the SPX chart above, and also added an alternative count, that is very bullish, that is because we have only had three waves down so far, and that over-all is a corrective wave at this point. The 1-2, 1-2, down option is still alive.

10:30, FWIW, I exited my 100% short positions in WSS
8:08, A serious break out of the channel, and down below the trendline

Click here for an updated chart!!!
8:01, The VIX finally broke out of the trend it has been in for the last couple of months.
9:08, The VIX broke above the upper long-term channel

7:48, Here is a longer term look, that 1-2 down, still could become part of a correction, a-b-c, with the "a", and "b" completed, and that would become part of a 2nd wave down, with higher highs to come. It still has only three waves in the sell-off, and until we have five, be aware of the bullish scenario.

Click here for an updated chart!!!
7:30, The sell-off started, complete with some gaps down. Next support is at 1114.81, proceed with caution, breadth is not confirming, only running 3:1, decliners on the sell-off.
FWIW, I am now full short in WSS.
Click here for an updated chart!!!
7:07, Added a new set of bullish fans to the Fib chart.

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