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Tuesday, May 11, 2010

Tuesday updates

The VIX is looking like somebody gave Dick Cheney a shotgun and a full box of shells, then hid a lawyer on the otherside, there are holes everywhere that will be wanting to get filled.
After the close, The SPX finally broke out of the consolidation to the upside, making a higher high in the process, before selling off and closing in the red, in what at this point is best counted as a five wave impulse pattern down. There are no over-lapping waves in the sell-off, so for now I have labeled it as the 1st wave down of the bearish count. There was no follow thru to yesterday's monster bull market leaving us back in limbo, waiting for the market to tip its hand. Keeping the trend at neutral until we break above 1177 at the red dash line, which would require breaking thru the 50 day MA first, at 1172.45, or we sell-off and make a lower low at 1103.84. The bullish count starts running into some serious problems if we break below the 1138 level, the spot where I have the 1st wave label in the bullish option.
Breadth for the day ended at 1.26:1, advancers, which is unusually having the advancers leading, while the SPX finishes in the red. There is no follow-thru today to yesterday's historic readings that would of confirmed the start of a major uptrend, instead it leaves a big question mark if yesterday's move up was hopeful thinking from the actions of the ECB, and now clearer thinking minds are thinking twice below going long(bullish). Tomorrow could be very interesting for the bears if the overseas markets start selling-off hard tonight, giving us a large gap down open, with the possibility of a 3rd wave down. Again, we would need to see those breadth numbers for the decliners back up into record territories for more then just one day to confirm that a hard-core sell-off is starting.

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7:32, That 10 point drop at the open was only a blip on the radar, compared to the last few days price action. With-out making any minor higher highs, or lower lows this morning we just continue in the sideways pattern that developed after yesterdays initial spike up, which for the bears is not a good thing. These sideway movements are part of a consolidation process that help to relieve the over-bought/sold conditions before the price action continues in the direction that it was going before consolidation, for the SPX, that means more upside.
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7:16, The SPX has found support from the medium-term Fib fan, and has overhead resistance from the short-term fans.

2 comments:

  1. Col

    There were more declining issues in the s&p and the downside volume exceeded upside on the s&p and the nyse

    jxxd

    ReplyDelete
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