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Sunday, July 11, 2010

Sunday Observations- Fib fans!!!!

This is the long term chart of the BSE, and is the most bullish looking index right now. It does count out much better then most indexes for the last year, where it has had a much clearer looking impulsive wave, but has been stuck in a consolidation pattern for the last few months, very possible that the 5th wave has now started, and it will get a break-out to finish the wave 1 up, before retracing for the 2nd wave. I have taken a lot of heat for having the BSE finishing the 2nd wave back in October '08, but because of the size of the retracement, which is well over 61.8%, I see no other way to label that sell-off. The BSE does not have long-term data to work with like most indexes.
This is the short-term Fib fan chart for the BSE where you can see how close it really is too breaking out, if it can recapture those two bullish fans that are acting as resistance, this could explode to the upside.
The DAX, surprisingly enough, almost made a new high last month, just shy by about 11 points. It too is trying to recapture the shorter-term bullish Fib fans and has no resistance from the longer-term fans until after it has made a new high, but, a sell-off could quickly drop it down to the last spot of support from the bullish fans, which gives, would really be bearish.
The BKX has been a great chart to work with for the Fib fans, and has really shown the benefits of watching the Fib fans because it has done just an awesome job respecting the fans. Right now, the only bearish fan is at risk of being broke to the upside, something that would be bullish, but there is resistance from a bullish fan around the 52 point level.
The VIX, not looking very bullish according to the Fib fans, as it has been stuck in a short-term set of bearish fans for the last couple of months, and , as of now, there are no bullish fans.
On to the Dollar, this is a very interesting chart because the bearish fans have also been very well respected, a bounce could be coming in the $83 dollar range, has it hits support from the bullish fan. Once the Dollar does break free of the bearish fans, it could have another strong run in its future, but that $83 dollar area needs to hold, other-wise we are back down to the $81.50 range, where there is a lot of support before a bounce could happen.
And, lastly, the SPX, which has broke-out of its only bearish set of fans, but does have resistance approaching around the 1090 level from a long-term bullish set of fans, which, if it can break thru, would become bullish, with little resistance on the way to making new highs. This is one fan that needs to hold for the bears.
If anybody has an index, or stock that they would like to have done up with some Fib fans, let me know, and I will work on them for a post next week-end. It will have to be limited to just a few charts because of the time requirements to put them together in Stock Charts.

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