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Tuesday, January 12, 2010

Tuesday updates

The trendline of support that has held for the last month and a half was finally broke today on the Russell, after the indicators had been showing negative divergences for the past two weeks. Also showing a buy signal now for the short-term on the STO.
The Fib fan chart today has really been interesting to watch after I put that bearish fan on. Both the bullish and bearish fans have been fairly well respected today.
After the close, Well we finally had a sell-off, with the SPX making lower lows, and lower highs. I am unsure of the short-term count right now, the SPX could be in a 1-2, 1-2 down, or the 1st wave down completed, leaving us in either a 4th wave with more downside, or in a second wave with some upside still left. The INDU, had its 4th wave enter the 1st. Also this can be counted as a correction down from the top. Tomorrow will be an important day to help clarify the count, plus we need follow-through to today's move to confirm that the trend might of changed to down. Levels to watch are 1131.80 and 1114.81 on the downside, breaking these by making lower lows would help confirm the trend is down. And 1141.42 and 1147.85 on the upside, for making higher highs. Breadth for the day finished at 2.55:1, decliners, on average volume, respectable, not not convincing enough to feel that the trend has changed. I would like to see follow through tomorrow with an even larger number, matched with increased sell volume.
FWIW, in WSS I sold my shorts for a 7% gain for the week at 10:30 PST (low of the day), and at the close I went 25% long, leaving 75% in cash. The main reasoning I used was the SPX had hit the trendline of support from the July lows and the STO is in over-sold territory.

9:32, well there are two options I see on the counts now, a full five wave impulse down almost completed, as I have labeled, or a 1-2, 1-2 down, currently in iii of 3 down. The squiggles in wave 1 I have counted out as a leading diagonal.

7:00, Here is the Russell, with the same count I have had for the last three weeks, it also has a completed count, but still needs to confirm by making some lower lows.

Click here for an updated look at the chart, and please vote!!!
6:53, One thing I will be watching to support that a trend change is happening would be the SPX breaking out of the lower Fib fans.
7:18, I added an updated chart, with a set of bearish Fib fans. See if they hold :)

6:41, Gap down open, that made a lower low, if we have follow through on this today, I believe the trend will change to down. 1142.06 was broken, next in line would be 1136.75. Something we have not seen for a while has been breadth running this high, currently 3.71:1 decliners. I still have no volume numbers, but if this is on increased volume, there could be something to this sell-off. Still too early to confirm if some type of top is in.

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