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Thursday, May 20, 2010

Thursday updates

May he rest in peace!!!! After the close, WOW, What a way to go into OPEX Friday, with breadth at the close 19.71:1, decliners coupled with 98.6% of the days total volume, being sell volume, and closing at the low of the day. Needless to say, the trend remains down until we start making higher highs, and short-term support levels for the bulls are running out quickly. Right now, the next line the bulls need to hold is the trendline from the chart posted at 6:50 this morning around the 1065 level. The bears were able to cause tremendous technical damage today, with the SPX closing below both the 200 day MA at 1102.47, as well as the 50 week MA at 1072.25. And just another point for the bears, the NYSE did close below the May 6th low. The same low on that day is still support for the SPX, and is the next lower low to test down at 1065.79. Levels for tomorrow that would cause concern for the count, and the down trend, would be breaking above 1095.09, with serious problems above 1119.03, where the trend would become bullish.
I really hope everybody was able to short the market before this latest down trend started in full force last week, but please remember to keep the trailing stops going to protect your profits, with the VIX running above $45 after the close, the market is going to have some violent and large moves, both to the downside, and possibly to the upside, and if you are feeling gracious with those profits, you are more then welcome to donate a small percentage to the blog.
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9:51. It has been so crazy today I did not get a change to post the short-term Fib fan chart until now. The SPX is firmly buried in the most bearish part of the most recent fan, this is the fan to watch, because if we start break-up thru this bearish fan, things could start changing favoring the bulls.
Breadth update, 27.76
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9:22, If the SPX is truely in an impulse wave down from 1219.80, we are going to need quite a few series of 1-2's down for the 3rd wave down (green) in order to properly trace out. The RSI readings on this chart are also not supporting the low today as a 3rd wave down because the RSI and MACD will normally hit its extreme on the iii of 3 wave, before diverging, and we are not even close to having an extreme reading yet. A quick guess on the length for the 3rd wave is to multiply the 1st wave by 1.618, making the 3rd wave down 249.18 points, and finishing at 924.39, with the middle of the 3rd wave at 1048.98, marking the point of recognition. It is after this point that we should start seeing the 3rd and 4th waves start to appear. To keep this count valid, the SPX can not trace above the previous set of 1-2's, at 1119.03.
Breadth update, 24.53:1
7:51, WOW!!!, The VIX is now up 300% in less then two months, and also made a higher high this morning.
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7:42, Updated Fib fans on the long term chart, next support level for the SPX is around the 1030-35 level according to the fans.

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7:20, The bullish option is in a world of hurt right now as we keep making major lower lows, next in line is a biggie, 1065.79. On the upside, we would now need to break above 1119.03 to change the trend to bullish. Hope everyone was able to take advantage of this move.
Breadth update, 28.33:1, decliners, now breadth is increasing.
7:05, The option bearish count with the Leading Diagonal stays valid as long as the 5th wave does not drop below 1071.03, at which point, it is no longer the shortest wave, breaking one of the requirements for the contracting triangle.
Breadth update, 24.23:1, decliners. Breadth has been slowly falling since the open.
6:57, The 200 day MA on the daily SPX has been broke to the downside, long-term, this is very bearish. Also the RSI is still dropping, and if it does make a lower low then the previous low back in the beginning of May, it would eliminate a divergence, also bearish. The lower Bollinger band support is currently at 1090.60.
6:50, Next support on the SPX weekly is the 50 week MA, at 1072.58, that needs to break before we test the trendline of support.
Breadth update, 25.72:1, decliners
6:42, Holy $hit, breadth 28.49:1!!!!

1 comment:

  1. Nice work Mikey! I've been hung up on that first big move down to 1065, couldn't get past the fact it looks like a clean 3 wave count to me. But now I think I see what might be forming - A GIANT leading diagonal. That would make the volatile so far just an appetizer.