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Tuesday, March 2, 2010

Tuesday updates

I did finally figure out how the bulls were able to keep pushing this market higher as the volume keeps declining to some of the lowest levels of the entire rally form last spring.
The daily chart of the SPX is really showing how the volume is drying up on this rally, and how the volume is behaving much differently from the July lows. Also of interest is how the RSI is about to hit trendline resistance. Possible for a little more upside before it will be tested, and that would fit with the count I have on the chart below.

After the close, The SPX continues to make higher highs, so the over-all trend remains up. I did change the micro count from an extended 5th, because the RSI indicator was not lining up correctly for the final waves, and this new count fits much better. I strongly believe now that the Russell is in a different count from the majority of the indexes. Its rally was much more impulsive looking then the SPX, which is still very corrective looking.
But until we can start making lower lows the bulls have the ball, breaking below 1108.66 would be the first sign that the bullish trend is in jeopardy, followed by 1097.56.
Breadth for the day ended at 2.37:1, advancers, on another very low volume day.

10:03, It seems as though the Russell once again is getting ahead of itself, just like it did back in the middle of October, and the end of November.

Click here for a live, and updated chart!!!
9:36, I adjusted the count on the Russell by replacing the "A", and "B", with a 1-2. So far the Russell has been unable to make a new high, by breaking above 649.15, if for some reason, we have the high of the day already in at 648.80, that would be an ubber-bearish sign that the Russell could not make a new high, and would leave us with a bearish double top. FWIW, The $TRAN (Dow Jones transports) are heavily in the red at this time and still dropping. If the markets can not advance as a whole, and we only have one index making a new high, it is a sign that the markets are not firing on all cylinders and the rally is starting to fall apart.

7:49, The dollar is fighting through tough resistance right now, but if it can break above the 81.50 level, the dollar would have more room to run to the upside. Currently at 80.89

This is a nice shot of the Fib fans in action, the BKX has been limited to its upside by the resistance of a fan. A good test will be coming here soon, to see if trendline resistance can halt the slow rising trend.

7:21, I am just doing my part to show a bullish option. There is now unlimited upside!!!

Click here for a live, and updated chart!!!
6:51, The Russell now has a full five waves up from 620, and at the same time is only 4 points away from making a new high, this will be close, maybe a double top even?
Click here for an updated real time chart!!!


  1. col! what a great picture and caption!!

  2. Ah, I see you've now got the A, B in place for a large ABC from the correction low. Target is a double top or new high for SPX. This large sideways threes formation is either part of a larger ED or A, B of a triangle. Either way the patterns should eventually lead to new highs well above 1200. Best target date is May/June followed by a correction of 20% or more into late August. I am nether bull nor bear - just trying to ascertain the most logical route. Good analysis as always.

  3. Nice photo shop of bronze bully Mike. Too bad there wasn't some member of the animal kingdom representing short sellers, whose n*ts you could show in one of those Spanish Inquisition type vices.

    And David I'll give you credit, so far you are winning with your prediction but that must be "logic by chart" because given the fundamentals the logical route should lead to the bottom of the Mariana Trench.

  4. Stop molesting my friend in the top picture!!! GO BULLS!!!

  5. David needs to pay attention to the market. Instead of a double top we may certainly get C=.618xA and that means SPX 1128, a perfect ending point for wave 5 of C of 2; works great with the charts here. Also 1130 is heavy duty resistance.

    Quite logical and possibly correct. Wave A was up in roughly 10 trade days, .618 of 10 comes out to late Thursday early Friday give or take.

    For the record wave B down to last Thursday's low was roughly .382 in both time and price of wave A up.

  6. Hetty the fundamentals are just fine. Bull markets climb a wall of worry, and without worry the markets wouldn't be rising. The combination of low interest rates, a gently declining currency and ample liquidity is powerful bull market stuff. The size of the public debt is a distraction. Every bond auction refinances the debt at lower rates, and it's the cost of financing that's important, not the size of the debt.

    It's my belief that we have entered a very large ED that will rise in a sequence of overlapping threes until 2012/14. SPX should reach 2200 or higher. Only then will we get the real bear market which should last until 2018/22.

    VIX is way too high and is likely to gradually makes its way to a reading near 8.

    Just my view - don't want to hijack Michaels excellent work.

  7. David, David, David. 2200 SPX? I'm biting my tongue and, having severely edited this comment will engage no further my friend.

    H****s. To the moon. Bring it. Hat tip to binve.

  8. Ha Ha Ha. Never mind. I don't mind if people think I'm a nutter. Time will tell. In the shorter term, let's see if SPX can get above 1200.