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Monday, April 12, 2010

Monday updates

After the close, A boring day, although we did make a new high keeping the uptrend intact. The wave structure for the day was a classic 4th wave where we were stuck in a 5 point trading range tracing out micro correctives waves, but I am unsure of which degree to label it because the larger term structure is falling apart (the blue 3rd wave) making me think we might be in an ending wave pattern where the 1st wave is the largest, and the 5th, the smallest in a contracting bearish wedge, or ending diagonal. The price action on the SPX is really starting to wane making a truncation very possible at anytime. We are also very close to my first target of 1200 and upper trendline resistance.
Breadth for the day was a whooping 1.34:1, on low volume, further signs of the lack of buying interests as we approach the 1200 level. On the Bullish side, days like today, that are consolidation days normally give the market on opportunity to burn off some short-term over-bought conditions clearing the way for another bounce upwards.
Levels to watch on the downside tomorrow are 1175.12, also that is where I have the 2nd wave labeled, is an important low that needs to hold for the uptrend to continue. And for the really bearish level 1169.84, an older high, and also the apex of the last triangle.
The VIX closed BELOW support at 15.58.

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8:31, The SPX is ping-ponging between the Green resistance fan, and the Gray support fan this morning.

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7:13, The SPX did make a new high this morning confirming the trend remains up, and now is in an interesting situation, up against trendline resistance, and also in need of higher highs for the 3rd wave, of 5 up for the count to stay valid. Stay tuned to see which scenario is the winner. Also of note, the RSI DID break above trendline resistance.

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Trendline resistance is VERY close at hand on the SPX now.

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6:39, Not a good sign for the Bears, the VIX opened gap down this morning, breaking thru the very important support level of 15.82, making a lower low at 15.45. It needs to QUICKLY reverse course before old support becomes new resistance.

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