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Thursday, June 10, 2010

Thursday updates

This chart has been very good to me in the past for finding tops and bottoms, today, it went bullish, after the price action crossed over the 20 day MA. I do not use just one chart for deciding what direction the market wants to go, but many. Over the last 24 hours, a majority of signs are now pointing to a bottom being put in, and a new bullish trend developing, I still would like to see some follow-thru to todays move before going bullish, the bear in me sees an economy on the brink of disaster, so I use charts to help take the emotion out of it, and as much as I hate to think about another bullish trend starting, the charts do not lie. The Bears NEED to hit a home-run tomorrow, period!!!!
This is a new chart for me, so I have not figured out its personality all the way, but it does back-test reasonable well. It did show its first buy signal today, since the entire sell-off began!!!
The Summation Index printed a black bar today, another sign that the downtrend is in serious jeopardy, if the SI, continues printing black bars over the next couple of days, that should accelerate to the upside, it will confirm a new bullish trend has started.
Copper, did not participate in todays rally, closing down 1.23%, the bears do have a chance IF Copper is still leading the indexes!!!!
One more piece of good news for the bears, the SPX was stopped by resistance of the blue, bearish Fib fan, now it needs to reverse course, and take out the green bullish fan, that it played with earlier in the week, once, and for all!!!
The short-term VIX, looks to be stuck in a triangle, with a lot of open gaps on the downside, and one small one on the top-side, when the VIX does break-out, it most likely will confirm the direction of the larger term trend for the equities market.
After the close, The Bulls brought their "A" game today, and took it to extremes, there are no, if's, and's, or but's, the bears HAVE to show up tomorrow, and kindly return the favor, or else, Game over, and the Bulls win!!!
Today was about as bullish as you can get, with breadth closing at 7.17:1, but with the buy volume accounting for an incredible 97.60% of the total volume.
The SPX did trace-out the a-b-c as I pointed out this morning, so at least, the counts are working, but now, the bears need to follow-thru on the count, and have a very serious sell-off tomorrow, or it will be time to start looking for a bullish count, which at this point, I still can not find a decent impulsive wave up from the bottom, to get a bullish count going.
The SPX did stop short of challenging the 20 day MA, and still has quite a bit of over-head resistance to plow thru if it decides it wants to try and make a new high. The trend still stands as NEUTRAL, with a break above the old high on June 3rd, at 1105.67, moving the trend to bullish, on the downside, we need to start making lower lows, to get the trend back to bearish.
Click here for a live, and updated chart!!!
7:47, It is do, or die time for the bears, they need to get this turned around ASAP before the close, because the current market internals are very bullish, with breadth running 8.68:1, advancers, on buy volume that is representing 96.58% of total volume!!!
Click here for a live, and updated chart!!!
6:43, The SPX exceeded 61.8% of yesterday's sell-off, making the odds more favorable to the double zig-zag option, that is a-b-c-x-a-b-c. There is quite a bit of over-head resistance*, but if 1077.74 gets broke to the upside, I will move the trend to NEUTRAL. The bears backs are really up against the wall today, as a strong up day will likely result in the majority of my longer-term charts, and indicators going bullish, something I will not know until after the close.
*Overhead resistance:
1081.53- 50 week MA
1090.67- 20 day MA
1095- Trendline resistance from the highs
1107.55- 200 day MA


  1. As I commented last week, this doesn't look like the beginning of a bear market, but like a flag or the early stages of a flag. Key target date for completion of this correction phase isn't until mid August so there's plenty of time to form a triangle. My Gann stuff still suggests SPX 1400, by July next year or March 2012.

    Thorough analysis as always Michael.

  2. Great analysis Mike! Tomorrow is critical, both here and in Europe, especially with the DAX. Bears need a May 28 kind of day here tomorrow, and nearby resistance to hold in Europe!