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Thursday, July 8, 2010

Thursday updates

The percent of stocks above their 50 day MA has now broke above the 20 day MA, the reason I like this chart so much is because in the past it has done an excellent job on catching the bottoms, and using the 20 day MA as a confirmation, now this chart is bullish!!!
The Summation Index managed to print a black candle today, not always a sure thing on the first candle heading the opposite direction, I usually wait for an acceleration to form to confirm a new trend is taken place.
Also, two more bullish triggers occurred after the close, neither of which I was expecting, leaving the trend now at 50% bullish.
After the close, A boring day of consolidation clearing the way for hopefully that last little push that will close the gap, and give a complete wave count for the 2nd wave up. I still am leaning on this rally being corrective, rather then impulse, with the main reasons being the way it is channeling, or i should say, lack of any proper channeling, and the gap that got filled this morning, should not have been filled if it was the iii of 3rd wave up. The bear in me is nervous about the 61% retracement level as odds for the correct labeling as a 2nd wave really start to diminish after it has reach that level. One good thing I am seeing for the count is at the close, negative divergence is building which also means a top of some sort is close at hand.
Breadth for the day was 3.41:1, advancers, not near yesterdays level, but higher then I was expecting with most of the day being stuck in a flat trading range.
No higher highs were made today, nor lower lows, so that trend is neutral, as well as the Trend finder, with equal numbers of buy, and sell signals.
1076.88 is where the 50 day MA closed, and that would make a great target to finish this rally off, a quick back-test of the 50, and conveniently that would also close the gap, then we could call this rally completed.
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8:12, The gap created at the open has about fully filled itself, and that really ups the odds it was an exhaustion gap instead of a break-away gap that is seen in the middle of a run. It is now quite possible that the "C" wave has terminated.
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7:11, The longer term Fibs now has resistance up near the 1090-95 level from the next bullish fan line since resistance was broke at the open, and the 1125 level has resistance from a very important high.
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7:04, The SPX has broke out of the bearish fan with that gap after the open, and is now firmly in the most bullish part of the green fan.
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6:47, Do, or die time for the bears, this 2nd wave retrace is starting to reach the uncomfortable level breaking slightly above 50% level at the open and quickly approaching 61%, hopefully it just wants to fill that gap at 1075, before reversing. The SPX also added another gap this morning that can be looked at two ways, either an exhaustion gap, or break-away gap that is seen in the middle of a 3rd wave, for the point of recognition.
The Trend Finder did trigger a 4th buy signal at the open, moving the trend to even, or cash.


  1. I'm not sure about a "do or die" situation. That's rather melodramatic. A 61.8% wave 2 retracement is perfectly normal. In fact, anything less would surprise me.

  2. Tom, the do or die, is more for the trends, which are quickly headed to bullish. Once 61% has been reached, odds really start to diminish that this is a 2nd wave retrace.

  3. If it is not a 2nd wave, what is it? I couldn't think of an alternative count...

  4. Sean, if this is not a 2nd wave, then the whole sell-off needs to be counted as a corrective, and that means new highs. How to label that is not clear though, and how it fits into the rally last year also would be goofy.

  5. 當一個人內心能容納兩樣相互衝突的東西,這個人便開始變得有價值了。............................................................