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Tuesday, February 2, 2010

Tuesday updates

The Russell is really lagging behind the SPX, only having retraced somewhere around 30%, while the SPX is closer to 40% retracement. The STO is also in over-bought territory on this 30 minute chart, and there is a slight divergence on the William's indicator at the bottom.
Click here for a live and updated chart!!!
After the close, The expanded flat is back, and looking better then ever now that the rally up from Friday's low is taking on an impulsive look to it. The Other option (check the chart at 9:37) is still possible, so be careful thinking this is a top of some sort. For the Expanded flat, we have reached the required retracements for wave 2 up, and if the market starts to nose-dive in an impulsive wave down very soon, you will know why. This count also is closer to satisfying the time aspect of a corrective wave, three and a half days for this option, compared to two days for the option down below. The 15 minute chart above is now showing negative divergences on the RSI and STO, as well as the MACD rolling over after peaking and showing a sell signal.
Breadth ended the day at 3.37:1, advancers, but again on low volume compared to what we were seeing during the sell-off, and definitely below the 9 day average.
We did make three higher highs today, breaking above 1096.45, 1100.22, and 1103.69, so that method signals the trend is up, until we start making lower lows
Tomorrow it is still possible to have more upside to finish off the 5th of "C", the intra-day squiggles can be counted in more then one way, so I will stick with the slightly larger degree waves for now.
* Side-note, the Russell is back-testing the trendline, now resistance from the July lows, Click here for the chart!!! I will post more charts after Stock charts updates the dailies.
FWIW, I held the 25% short position I picked up earlier in the day in Wall Street Survivor and will add to my position if we make higher highs. This is part of a longer term position setting up for the 3rd wave down, not inter-day scalping. With the next upside target for adding more shorts at 1111-1113, where we have the 50% retracement level, as well as the 50 day MA, if we make it that high.

Click here for an updated real time chart!!!
11:49, I reset the bearish Fib fans, using the extreme low as my new median point

9:37, FWIW, I just went 25% short in Wall Street Survivor @ SPX 1100, 75% still in cash, the reason was we almost reached 38.2% retracement (1101.75), and the micro counts are close to finishing 5 completed waves from the open today.
Click here for an updated chart, in real time!!!
7:06, This is the most likely count at the moment, with the final 5th wave down of wave 1 down finishing up on Friday. with an "A" and "B" wave put in yesterday. Leaving the "C" wave for this morning, and this is where it becomes unclear of what the next move will be, multiple possibilities exist.
One option is that could be it for the 2nd wave up, a completed simple zig-zag, and will be followed by an strong impulsive wave down for the start of wave 3. The problem will this is TIME, after spending more then a week in an impulsive wave down, a day and a half for a correction seems on the short side.
Second option, The waves "A", "B" and "C", could be followed by a "X", and another series of abc's, creating a double zig-zag, a-b-c-x-a-b-c, this option would satisfy the time element that is missing in the first option.
Third option, that the expand flat is still on the table, and the "C" wave from Friday's low will morph into an impulsive wave, that is required to keep this count valid.
Fourth option, none of the above are correct, and we will be looking at a very complex corrective wave that nobody in there right mind would be able to predict at this stage.
Fifth option, this a-b-c up, is only wave A of 2 up.

Click here for an updated real time chart!!!
I added a set of bullish Fib fans, now that we are out of the bearish sets

3 comments:

  1. Excellent analysis as usual.

    Personally I see the situation differently, with the entire decline being a three ending with an ED. The rise from the low is also a three under development, with your 1,2 being an a,b.

    If so, this entire week is likely to be a gently rising sloppy overlapping B wave lasting until perhaps Feb 7th/9th.

    If the bear has returned, there will then be a nasty wave C to end wave A of a larger decline.

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  2. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

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