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Friday, February 19, 2010

Friday updates

After the close, The SPX just keeps inching it's way up, making higher highs, and not any lower lows, so the trend continues to be up. 1100.91, is now the level for making a lower low. There is also a rising bearish wedge forming that would max out around 1020, but we already have a major divergence on the MACD, and a minor one going on the RSI, with the STO still up in over-bought territory and on a sell. The VIX also managed to stay with-in is falling bullish wedge today. Volume and Breadth has been declining during this whole corrective rally. When this does finally give, it should be big as the rubber band is getting wrapped really tight now.
Breadth for the day ended at 1.45:1 advancers, again on low volume. As the advancing issues decline, day, after day, it just shows, that fewer and fewer stocks are making higher highs, to help push the market higher. And when that balance fails, that leads to a sell-off on high volume and breadth as the bulls rush to save their profits, creating that cascading type of sell-off we have seen after every major top in the last year.
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7:40, It is hard to say with any conviction if the top has been put in, there are just too many different ways to count this correction to be certain of any one count. A break below 1094.72 along with seeing the VIX break-out, would be the first technical signs that the up-trend is in serious jeopardy. The 60 minute charts are on a sell, and the dailies are up into over-bought territory and very close to rolling over. Until we start making lower lows, the trend remains up. Breadth currently is running 1.18:1, decliners.

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With the market working its way lower this morning, the VIX has remained inside the falling bullish wedge, and is up against resistance right now, when it manages to break-out, the indexes should go into a major sell-off.

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6:47, The SPX recovered from the lows overnight, but did break down below one of the lines of the Fib fan, which should now act as resistance.


  1. nice ending day update col, thanks!

    do you think, on the eur/usd currency pair, that it might also be showing a "rising bearish wedge forming?"

    don't know if you can speak to that, but either way, thanks again!

  2. I'm still in the bullish camp. Sorry. To my eye this still looks like something that will eventually lead to new highs. Possibility that this rise is wave 'A' of an ABC that forms part of a large ED. Alternative is a sideways triangle that also will eventually resolve to new highs. A 'B' wave is due, perhaps at c=1.618 in the 1120 area, and that will give more clues.

    Great analysis as usual.

  3. I like Tony C's bullish DOW count. My charts / indicators agree and say we just finished wave 4 with wave 5 on it's way to new high's.

    The A-B-C correction is finished with the typical ramp on Monday's.

    The PPT (GS) and JPM probably subscribe to EWI, McHugh, and read targeted EW blogs to blow up counts.?

    Thanks for the charts and have a nice weekend.

  4. Mike do you think there is any significance the S&P closed just below the .618 retrace? (DJIA too I believe). A pop and fade/drop on Monday to close below this level (again) will be interesting. Just like the banks, the market now seems to be in "extend and pretend" mode.