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Monday, February 22, 2010

Monday updates

Here is a great chart that shows the volume on Advancing issues, and goes to show how the volume has been declining on this whole rally. Today's reading (thin red line) is well below the 4 day average (thick black line) and now is negative. And the 4 day average has peaked and rolled over. The previous rallies have all showed the same pattern, that as advancing volume declines, the average peaks, rolls over, then we go into a sell-off.
After the close, A boring day, that reminds me of the classic wave 4 type of day full of consolidation, with weak breadth and volume. This is just one option I have going. There is also a slight possibility the we had some sort of a truncated 5th, and the sell-off at the close was part of a new trend down. The micro count was very impulsive looking, and the VIX was close to breaking out of a falling bullish wedge, but I would still like to see the SPX start making lower lows before proclaiming a top was put in. 1100.08 would be a good sign that the up-trend was in serious jeopardy. For now I am leaning for a higher high to finish off the 5th wave, but would not be surprised is we have a good sell-off tomorrow.
Breadth for the day finished at a whooping 1.01:1, decliners, on low volume, this is what is making me lean more toward today being part of a 4th wave. Anyway you put it, I do not see much more left for the bulls at this point, the technicals are all in agreement that momentum and volume are drastically dropping in the late stage of this rally, and when it hits that critical balance point, it will roll over and the bears will have the ball back.

Click here for a live, and updated chart!!!
11:23, The consolidation today has caused the Bollinger bands to really tighten up on the SPX, we should expect a large move coming here very soon.
9:50, Unless the Russell had a truncated 5th in the micro count, we should have one more quick thrust up to finish the 5th wave, then it would be ready for a major sell-off. I have the count set-up by using the peaks in the MACD and the RSI to mark the iii of 3 wave up.
7:06, Here is a longer-term chart of the VIX, the daily chart, and what sticks out the most is the Full STO bottoming out in over-sold territory, and is rolling over to a buy signal. The VIX is coming upon support from the old upper channel line.
Click here for a live, and updated chart!!!
6:51, The VIX appears to have broke up and out of the falling bullish wedge, this very well could be the first sign that the equities are about to enter a sell-off. Breaking above 21.14 would be making a higher high, another bullish sign that the down trend is in jeopardy.


  1. Mike you maybe right about one last thrust upwards. I posted this a little while ago on Trade-To-Win.
    -This has always been a good indicator in the past of an upcoming big move [up/down] these next few days.


    -Also Feb 17 & Feb 26 [McHugh phi turn dates +/- few days]

    -March 1st is a Bradley Turn date.

  2. Well McHugh's Phi Mates are best looked at in the rear view mirror. Friday was probably the one due the 17th...and I'll bet we get some kind of low for the next one say next Monday or Tuesday.

    Sure the small McClelland Osc is great indicator of a coming big move; too bad it doesn't tell us which way...I'm betting down...very tight BB on the SPX 30 minute and up too....lots of energy building.

  3. The first critical Bradley date of March 1st is only four or five trading days away. That's enough time for a 4th and ED 5th to form. There are only two significant Bradley dates this year March 1st and Aug 29th. No guarantee that these dates will mean anything, although IF the markets reach a peak on March 1st (or thereabouts) that might be seen by some as being very significant.

  4. Hi Mike,
    FWIW, I agree with your count to the tee. That NYUD chart is great. I always learn something new visiting your blog!