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Wednesday, January 13, 2010

Wednesday updates

This is just one other good reason to watch and add the Fib fans to your collection of charts. It does a great job helping to confirm when a wave or trend has finished up. Breaking out of that bearish wedge was another good sign that the trend changed to bullish. I never use/trade just with the Fib fan chart but use it together with all the charts.
After the close, the count on the SPX is still unclear, I left the wave 1 down on the chart, but with the 2nd wave retracing so far back to the high, the probability is not very high that is correct, but it is still valid. That leaves the second option, that the run-up was part of a over-all larger corrective pattern, in which the different styles and counts available are so numerous it is hard to guess what the final out come would be at this stage.
But what I do feel comfortable with is that rising bearish wedge that was broke right at the close, along with the RSI, and the Elliott wave indicator diverging, together with the STO curling over to a sell signal all sounds short-term bearish to me.
Breadth ended the day at its high of 2.84:1 advancers. The SPX never did make a lower low, but briefly made a higher high before reversing back down at the close, leaving the trend neutral.
FWIW, I sold the 50% long position around mid-day, and went short 25% at 1148.30, the high of the day in my WSS account.

Click here for an updated look at the Fib fan chart, and please cast a vote!!!
7:20, The SPX is still with-in the short-term bearish fan, and the longer-term bullish fan.

7:00, The 1-2, 1-2, count that was an option yesterday is out the window, leaving the sell-off as either a completed 5 wave impulse, or some sort of correction that has yet to fully play out.


  1. Like your Blog:
    May I ask what fib measures do you use for the fib fans? Thanks

  2. just had some thoughts to share
    have a look!
    seems most likely outcome for S&P short term