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Wednesday, February 24, 2010

Wednesday updates

After the close, The wave that has been going on for the last day and a half, trending higher, still best counts out as a corrective wave up, and that fits both options I have going, part of a larger 4th wave that has not ended, with higher highs to come for the 5th, or part of a smaller 2nd wave up with a top already put in. Until we have a major break in prices both options are on the table. Time wise, the bullish option with the 4th wave is starting to get long and drawn out but is still with-in the channel.
Breadth for the day ended at 2.70:1, advancers on low volume, which is what one would expect for either count.
Breaking 1092.18 to the downside, or 1112.42 to the top-side would clarify the counts and confirm the direction of the trend, which is neutral at this point.
FWIW, the SPX did manage to close below the 50 day MA

8:35, The Russell presents the best case for the 4th wave theory, having retraced over 90% from yesterdays low, Also possible that the Russell count be in a slightly different wave count then the SPX. If the Russell does make a new high, it would be labeled as the 5th, and if the SPX fails to make a new high, it could be labeled as the top on the 2nd wave up. The RSI and STO, still have a little room to the upside before being fully over-bought.

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8:10, The count is still up in the air as to which one is most likely, either a new down trend has started, or we are still working on a 4th wave in the 2nd wave up from 1044.50. The indicators are not being much of a help either, mixed depending on what time frame you are looking at. Breadth is running 3:1, advancers, and we have been making higher highs, intra-day, so the short term trend in bullish. This can change really quick at these levels.

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7:00, Last chance here for the bears to keep it in the bearish set of fans.


  1. Mike on the wave count... what does you "gut" tell you?

  2. My gut, says let things play out a little more, then look for an edge. It is way to dicey right now for anything more then a very short term trade.

  3. My gut tells me it's going to be one of those "we have achieved stock market cruising altitude" days in order to get within range of a pop (tomorrow? Friday? overnight?) to satisfy the higher high requirement to complete 5. Gentle oscillations or brain dead to the close? We'll have to see.

    The big, bad, bond market and PM action so far today at the half might be signalling something too. One seems to be labouring while the other is not.

  4. Please don't forget that this could be a triangular B wave of a large upwards ABC - all part of a larger ED to new highs. An upwards break might not be a fifth, but the start of a 'C'.