Live Blog Chat-room 2

Friday, May 21, 2010

Friday updates

After the close, A wild day of mostly corrective over-lapping waves for OPEX Friday, with a huge 33 point trading range. The high of 1095.09 held, and we did get another lower low when we broke below the May 6th low of 1065.79, confirming the trend as still down. The SPX is still in the channel and closed below the 200 day MA, for the second straight day. We still have seven distinct waves down from the 1173.57 high, and to keep this down wave impulsive, we need one more wave down to make a total of nine waves. The Bullish A-B-C, is still valid, and needs to be on everyone's mind, that this can still be a corrective sell-off from the 1219 highs.
Breadth for the day closed at 3.14:1, advancers, with 89.84% of the total volume coming in as buy volume. Breadth is not that bullish, but the volume numbers are very bullish.
9:59, I have been racking my brain for the last 24 hours because of the way the RSI did not hit extremes on yesterday's low, supporting the idea that the low was a 3rd wave of some sort, even though the structure looked like a 3-4 combo, the RSI just did not support that, so I labeled it as another 1-2. I think I know why, because this wave down from 1173 could be one degree smaller then the wave down from 1219, and not the 3rd wave down (green) yet. This makes sense because I would not expect extreme reading on a smaller degree wave.

Click here for a live, and updated chart!!!

7:17, Welcome to OPEX Friday where anything is possible, the SPX did make a lower low this morning, breaking below May 6ths low of 1065.69 before reversing higher. The trend does remain down, and any break above 1095.09 would be bad news for the bears, making a higher high, and also invalidating the above count. At this point we have seven waves down from the high at 1173.57, and seven waves is a corrective structure, something to be aware of in case we do break above 1095.09. Next support level on the way down is another biggie, the old low from back in early February, at 1044.50.


  1. Thanks Mike.
    The NYSE did poke below that Feb low this morning.

  2. Mike, we also now have 1-4 overlap of submicro waves in the current "impulse" in the NYSE.

  3. Dow 5 minutes shows a channel formation

    thank you

  4. I wouldn't be at all surprised to see this entire decline develop into a downwards sloping triangle. In which cas we've got some more ups and downs to go, probably with lower volume.

    The devaluation of the Euro is incredibly bullish for European equities, and once the uncertainty dies down a strong C wave advance might develop taking SPX to the 1400 area. Target date for that rally target is July next year.

  5. Hi Michael

    I have one simple question as I am no EW expert but I notice that another popular stockcharts blogger has this as a wave 1 down from the top to 1181 and then 2 up to 1209 then down to 1066 in 3 and up to 1173 in 4 and now doing 5 down..I know it seems simple but 4 doesn't overlap 1 and it guess it doesn't break any rules.BUT no REAL EW guy has anything like it even as an alternate...well I can't find one.

    So my simple question is what is so wrong with it?If this meant a 5 complete say even after a further squeaker low soon then that would also form a nice neckline of a larger h and s potentially and I guess the next wave 2 would even be in a position to go back to highs without breaking rules in a wave 2.

    Anyway Michael love your work and I hope you can shed some light on it just a case of not having the look! just seems simple but still possible.


  6. Dow jones has formed a broadening formation in the weekly chart. I am posting the link here.

    thank you