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Tuesday, April 6, 2010

Tuesday updates

It is now possible that we have a full and completed count on the Russell, but before calling a top, I need to see some serious selling, with follow-thru to have any confirmation that indeed a top was put in, and that the current wave count does not extend, and shoot higher. The indicators are giving signals that this could be a top, the RSI did break above the trendline, which it should for the 5th wave, and the STO, and MACD are rolled over to a sell. The SPX, is a different story with a final 5th wave count unclear at this point.
After the close, not much to update on the count since the post at 9:58, so I picked the Fib fan chart that is showing how top heavy this rally has become, now approaching trendline resistance, with lots of divergences on declining volume happening over the last week should make the Bulls nervous.
The trend, however remains up, as once again, we made a new high on the SPX as well as most of the other indexes. The VIX also finally made a new low, at 16.08 this afternoon, leaving only 15.82 as final support, something that needs to hold for the bearish case for any sustainable sell-off in the immediate future. And just to add insult, to injury, the Russell did close above 700 at 701.48.
Breadth for the day was only 1.31:1, advancers, on low volume. The volume numbers have really been dropping off for the last two weeks, and soon are going to get to the tipping point that the sellers will jump in, with force to grab profits.
Levels for tomorrow are 1170.69, for a minor low, and 1161.48 for a major low, and turning point. I did up this level from 1152.88 today because with the current wave count, the SPX has no business being down at this level, at this time.

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11:02, The VIX is back down there flirting with support again, Support begins at 16.17, from the low back in mid March and the VIX is currently at 16.30, not much left before it begins testing the first support.

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Here is a little surprise, the Bollinger bands moved in on the price action real quick this morning setting up the possibility of a large move here soon.

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9:58, I am still not 100% confident on what degree we are in on the micro-count of 5th(green) wave up, but I did change, and lower the five wave impulse to the smaller degree this morning, then I had yesterday and marked it as 1?, because it is possible, that was the full 5th (green) wave, but is too short in my opinion, in terms of time, and price movement. The next couple of days should confirm , or deny this count.
We did make a higher high this morning, again confirming that the trend remains up, and will stay that way until we start making some important lower lows.
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  1. Hi everyone, made a new EW analysis, ES min. extension from now over 1295 until Aug/Oct,

  2. Your article is always useful.