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Tuesday, February 16, 2010

Tuesday updates

The SPX is now firmly up into the gray bullish fib fan, this is a bad sign for the bears, and needs to quickly reverse and break-out of there before it becomes support.
After the close, WOW, from a bearish perspective, today was a disaster. The Bulls carried the market from over-bought, to extremely over-bought conditions, and in doing so caused a lot of technical damage to the bearish case. The dollar had a bad day, that helped push the SPX up to 1095.67, through the resistance of the 20 day MA at 1090.23, and out of the bearish fib fans. The 50 day is up at 1108.43 now.
I changed the count on the SPX, to match the count what I have had on the Russell for the last few days, and also added the bullish option I was talking about last week. We still are in a corrective wave up, but with the amount of time spent in this 2nd wave, a higher degree of labeling would make more sense. The MACD, RSI, and the STO are maxed out to the top-side, and although they can stay that way for a short time, it should reverse and sell-off soon. This is just the reason trading corrective waves can be very cruel.
At 1097.47, the SPX will reach its 50% retracement level, and as long as we keep making higher highs, the trend stays bullish. 1104.73, the next high, should provide some resistance and is now the last major level to break above, before 1150.45.
Breadth for the day was 4.92:1, and this is strong enough to really cause alarm for the bears if it where not for the fact that volume was really weak today. Any follow through tomorrow, with increased volume should be seen as very bullish for the indexes, and really up the odds that we could be heading to new highs.

9:09, The Russell has now reached 50% retracement from the top, and the indicators are now up into the extremes of over-bought territory. I have a different count going on the Russell, then on the SPX, but after this morning bullish moves, I might need to revisit the count on the SPX.
Breadth currently is running 3.84:1, advancers, slightly above my comfort level, but with the indexes in a rising bearish wedge pattern, we should see some selling-off here, real quick!!
Click here for a live, and updated chart!!!
7:49, The SPX is quickly approaching the 45 degree median line of the bearish Fib fan, this is a must hold point
Click here for a live, and updated chart!!!
7:06, The VIX spiked down this morning, breaking below the Bullish wedge before reversing to recaptured it. Once it breaks out to the upside, it should rally hard, and the indexes should start the sell-off for the 3rd wave down.

Click here for an updated real time chart!!!
The last fib fan resistance for the SPX is now at 1094, and this needs to hold. 1089.64 is resistance from the 20 day MA.


  1. Not liking what I'm seeing - ouch this hurts.

  2. I am not certain who originated this trading maxim but would say it has some relevance in the days since 1044 was reached.

    Low volume on rising price = wrong price.

  3. There aren't any important astrological or Gann dates between Feb 15th and March 1st. It looks as though the 15th was a low and it seems highly likely that the new upwards trend established today will continue until March 1st (with some sloppy corrections here and there). On that basis it's probable/possible that what we are seeing is only wave 'A' of a bigger ABC or some other complex upwards corrective wave.

  4. Note that in the VIX chart above the entire rise from the low to the high can be counted as a five. The subsequent downwards sloppy correction might be wave 2, but is more likely to be wave A of a larger ABC when time is taken into account.