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Wednesday, March 10, 2010

Wednesday updates

This chart was worth posting again, this rally has acted far different from all the other rallies, that where both impulsive, and built on increasing volume, and remains one of the primary reasons I have been sticking to a corrective count for this rally, even if it were to exceed 1150.45.
After the close, the trend remains up, as we made yet another higher high, without making any lower lows. The ending diagonal took a hit after Blankfiend made the comment that wave 3 was larger then the 1st wave, so out the door that idea went. What did become apparent was the contracting triangle that formed at the end of the day, but how that would fit in the count is still not clear, but is usually a sign of consolidation before the very last move. I still believe we could get one more wave up, to test 1150.45.
One really interesting thing this afternoon was the way the VIX behaved, bottoming back on Monday at 17.23, and up again for the day finishing at 18.55, very close to the high of the day.
Breadth for the day ended at 2.08:1, advancers, that is up from yesterday and so was the volume. This is a small bullish sign seeing the breadth and volume increasing, and I said small, because a breadth reading of 2.08:1, is not very impressive.
Levels to watch tomorrow for lower lows start at 1140.09, then are followed by 1136.78, and 1134.90 for the minor lower lows, and the big one to break below would be at 1116.58.
I still plan on working with that bullish impulse wave count posted down below this morning. I am not 100% satisfied yet on the labeling. I have not gave up on the idea that a corrective wave could take us up beyond 1150.45, in part of a larger corrective pattern, or an ending diagonal, but the 1-2 down label would need to be removed.

9:59, This is the first decent looking ending diagonal I have seen in this whole rally, it will be very close to breaking 1150.45, please see the chart below.

9:39, The SPX has been stopped three times at 1150, if it is rejected again, that would make four tries, and then be very bearish. It is do or die time for the bulls now. Also noticing divergences across most time frames on the RSI, and MACD.

8:38, I have spent two hours going over this chart to try and get an impulse wave out of this rally. This is the only way I have found to make a impulsive count that does not break any rules unlike some who just seem to put numbers where ever they feel like it with no regards to the rules. With all the over-lapping waves it was very difficult to get a count that did not include so many 1-2 combinations. FWIW, I used the RSI to help set the 3rd and 4th waves. Comments?


  1. A, B followed by C. In C, i and iii of equal length followed by expanded flat for iv. Now in v which extends to 1.618 and is ending with an ED. Target 1150 to complete wave 'A' of a larger ED.

  2. Hey man how are u?

    u dont need to have any impulsive wave to make new highs...

    i did not try again that since (suposly) wave 4 did 50% retrace of 3... for me is very clear a corrective wave... ABC...

    than if we move down from here for me top will be failed (triangle) around 1115.... if new highs Expanding Triangle... but i am still bearish...

    very nice job


  3. can be an ED as well... but iam more for other choices

  4. Mike,
    I was following a contracting ED count as well, HOWEVER, Onlooker from Troy pointed out in a comment that the third wave is longer than the first.

  5. Michael,
    FYI, I noticed that for the first time your 30-minute band on SP500 did break to the upside, but did not yield significant move. Now it's forming ED. Does any bear still have a beer?

  6. Michael

    Have you seen yuor VIX chart today? Very interesting. Nearly ringing a "subtle bell".[s168106527]&disp=P

  7. Mike, C=A at 1153. Consider placing the 4 of C where the MACD hits the zero line.

  8. With regards to your attempt to give the SPX an impulse count, I’ll comment on something that keeps nagging at me.

    The very first wave off the 1044.50 low looks impulse to me. That would mean that we’ve got to have a second not far behind to complete a zigzag if we’re not going to count the entire series as an impulse. Where do we get that 2nd half of the zigzag? I see it in the price action of the 11th, what you have labeled as blue i. That would leave us with a proportionately small blue B however.

    After that everything is simple: a nice 5 wave count into the 19th finishing a flat, then a blue A-B-C into the 25th and, finally, a 5 wave up until now finishing (perhaps finishing) a blue (A)-(B)-(C) flat.

    But the big problem is the count from Feb. 5-12, and it all comes back to what is done with that first rally off the bottom on Feb. 5-8.

    Incredible that I’m so bogged down on that first wave up. LOL

  9. Good blog.
    very interesting.
    Please hold out in the future.

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  10. CoL
    I rememeber seeing something on the CiL about Eagle having something that he was going to post here or there last night. Is he still going to post it?