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Thursday, March 11, 2010

Thursday updates

Here is another sign of divergence, and over-all weakness from this weeks move, even though the SPX made a new short-term high today and is with-in $0.21 of making an over-all new high, and most of the other indexes have already made new highs this week, the number of stocks making new 52 week highs peaked back on Friday, the 8th, and has been declining since. Notice that the MACD is rolling over, but has yet to cross to give a sell sign, this chart is not very bullish.
After the close, The trend is back to bullish, after a short stint at neutral today, the SPX did make a higher high after making that minor lower low that caused me to go neutral. I took the 1-2 down off of the above chart, although technically that is still a valid option until 1150.45 is reached (wave 2 cannot be longer then the 1st wave). The corrective count up is still an option though and can be part of an expanded ending diagonal, or a larger corrective wave, like an expanded flat, as well it also could be impulsive as the chart I posted at 10:14 has been labeled.
The interesting part, is we did not make a new high, falling short once again and if we get a sell-off before 1150.45, it would be a bad omen to have four attempts failing to break above resistance, and result in a double top.
Breadth for the day ended at 1.499:1, advancers on average volume, but lower then what we had yesterday.
Levels for tomorrow, are the all important 1150.45 to the upside, and 1138.99, followed by 1136.78 to the bottom, where the uptrend would be invalidated.
With all the consolidation over the last couple of days, the over-bought conditions did get burned off, and even with the late day rally are still not firmly back to the extreme levels, although there are divergences on some of the different time framed charts, there is still room to run to the upside if resistance at 1150.45 is broken.
FWIW, The 20 day MA, crossed back over the 50 day MA on the SPX, going bullish once more.
***The counts on the above chart are not my preferred counts, I was only using that chart to show the red resistance line, for my counts, scroll down to 10:14.
Click here for a live, and updated chart!!!
11:54, All this consolidation is causing the Bollinger bands to tighten up again. I believe the odds are much higher that it breaks to the upside, as triangles are normally found in the next to last move up, in a wave. Also consolidation gives the markets the opportunity to burn off the over-bought conditions, paving the way for another advance.

Click here for a live, and updated chart!!!
10:14, I added a bearish count, onto the bullish count I showed yesterday because this correction for the last couple of days just feels like a 4th wave, and it is most likely building a triangle, something that would fit the 4th wave idea. The first set of 1-2's, in the red circle, still does not have my 100% confidence on that count, wave 2's should not be triangles. I have it counted as a double zig-zag, but that is still bending the rules a little. We did manage to make a lower low, it was a minor one at 1140.70, without making any higher highs, so now the trend is neutral.

7:37, this has turned into a big mess, the ending diagonal, has a 3rd wave that is longer then the 1st wave, a big no-no, unless the 5th become the longest wave in an expanding version. Also possible that the sell-off can be counted as a leading diagonal in the expanding variety.( I do have the ED labeled as one although it breaks the rules). One other option is that the high at 1145.37, was the end of the "C" wave, and that circle mess is part a "B", or "X" wave, with higher highs to come.


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  2. My best date for SPX to peak at C=A in the 1150/3 area is/was March 11th (give or take a day). If it fails to form a convincing top (and an identifiable upwards pattern to that top) at 1150/3 tomorrow, the next date of any relevance is March 23rd which will imply an extension to make an attempt at C=1.618 in the 1185/90 area.

  3. the problem and challenge, i believe, for the managers of a managed financial society, is to spot and pop "make or break" technical levels that many people believe in -

    this instills massive uncertainty, discredits anyone seriously or conscientiously trying to find patterns we all live by, and lets the manager manage our financial lives in the direction that benefits, i believe, that manager and those he or she is algined with -

    having said that, we build ships that we say won't sink, shoot rockets that (we say) won't fail, and predict the weather day in and day out -

    and nature, the universe, god's plan, still play out....