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Friday, February 5, 2010

Friday updates

This chart can not be very encouraging to the Bulls, the Summation Index made a new low today, and if you believe that chart patterns can play out on Indicators, then we broke below the neckline of a head and shoulders pattern.
The chart of the day, and the new year, just to show people I am not a perma-bear, I am bullish, on the Dollar, hehe!!!

No bounce here, and it made a lower low, not very bullish looking.

After the close, What a roller coaster ride today, at one point down 23 points, and then reversing hard to close near the highs of the day.
I have the count in wave A of 2 up, of 3, down. And we have already retraced close to 38% on the 2nd wave, but are still well with-in the bearish channel. I settled with an extended 3rd for the 1st wave down from 1107, completed this afternoon, that eliminated the problem with a 3 wave count for the final 5th wave.
We did manage to start making higher highs today, after we made a new low, so the short-term trend is up, with 1072.50 being the next high to beat and continue the up trend.
We have the 38.2% retracement level for the 2nd wave at 1067.53, as well as some strong resistance on the fib fans.
Breadth ended the day at 1.23:1, decliners on heavy volume.
The 15 minute and the other shorter-term charts are now up in over-bought territory, with the longer-term ones mixed.
For this 2nd wave we still need to put in the "B" and "C" waves, so I am expecting higher highs short-term as we wrap it up, then we can get to the meat of the 3rd wave down that the bears have been waiting for.
I am going to sound a little warning here, that this whole sell-off can be counted as a corrective wave down, and a break above the upper channel line will be a early warning sign something is not right with the counts. and breaking above 1104.77, is a sure sign that we have new highs in the future, the SPX has no business being up around 1090, with 1104.77 the last line in the sand.
Click here for a live and updated chart!!!
I am watching this close now, a break above 31.84, will be very bullish for the VIX, and very bearish for equities.

Click here for a live and updated Fib fan chart!!!
11:00, The SPX has broke the grey Fib fan, the trend stays down until we start making higher highs. Also the VIX has made a higher high, and is very close to making a new high. Breadth has been increasing all day, currently running 5.19:1, decliners
**10:20, FWIW, I just covered my 50% short position in Wall Street Survivor, now 100% cash.
10:30, back to 25% short
12:05, 50% long, 50% cash
12:50, sold the longs, 100% cash for the week-end
8:52, In a picture perfect world of Elliott wave theory, this is how the 3rd wave down should work out.
Click here for a live and updated chart!!!
7:10, The Dollar is ripping upwards again this morning making higher highs, and now up to $80.41, and as long as that trend continues, the indexes are going to suffer.
On the counts, I have this 1st wave of 3 down almost completed, with an extended 5th in it. I also see the possibility that what I have labeled as 3-4, could turn-out to be another set of 1-2's, and until we start making short-term higher highs, the trend is still down.
Breadth is currently 2.93:1, favoring the 3-4 count, I would expect the breadth to be higher if we were still making 1-2's waves instead of wrapping up the 1st wave down.
***we have a DEATH CROSS now, the 20 day has crossed the 50 day MA!!!

10 comments:

  1. Columbia, do you have a feel for how long 2 of iii will last [days or hours?]. Love your charts mate!

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  2. [Ooops forgot to add this with my post]Also any idea how far you think 2 of iii will retrace to.

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  3. wave iii shuld be longer than wave i..could it be 1079 was wave iii

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  4. Did you mean to mark that bottom as iii (there is a green iii on the chart) or just as 1 of iii (which seems more plausible to me)? Thanks.

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  5. I will post a chart showing where the most likely spot for the end of the third wave is!!!
    BTW, during market hours, you can find me below in the chat room if you have any questions :)

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  6. Mike, question for you.

    What degree to you think these waves are? From a time perspective, I have them as Minute waves, with us now being in Minute [iii]. From a magnitude perspective, especially compared to the size of the minute waves in P2, I could almost rate them as Minors.

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  7. Sensible warning about the possible corrective wave (my suggestion of a three earlier in the week refers). This can still be part of a large ED upwards into the summer, this present drop being a wave 'a' of a triangle B wave leading to eventual new highs. Or not. Only time and price action can tell us.

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  8. Columbia,

    What if the last impulse down you are showing above is not completed yet? Usually 4th waves break the fib fan, right?
    This is what I mean:

    http://4.bp.blogspot.com/_aUc7dtZnpP4/S23lAyaFt3I/AAAAAAAAAC8/jgrkaKTQ_oE/s1600-h/sc-1.png

    In such case we may have a boring-4th-wave-monday. A bull and bear trap...
    Thanks for sharing your work.

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  9. really great to be able to drop in and read some good common sense analysis again

    what a breath of fresh air, with the warning regarding levels in the s&p, and the "possibility" this current drop could be corrective, leading to a new upthrust (not my preference, but gotta respect it)

    and this :

    "The 15 minute and the other shorter-term charts are now up in over-bought territory, with the longer-term ones mixed...." -

    i kept seeing that in all kinds of various other markets, like th eur/usd and usd/jpy currencies, but you're the first to even mention it

    lot of people hoping for a larger corrective move back up monday to follow up on friday's late surge, at least in the commentaries i've come across

    thanks col, nice work!

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