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Wednesday, July 7, 2010

Wednesday updates

This is a chart the bears do not want to see, if the markets do have a green day tomorrow, mostly the price will cross overthe 20 day MA (blue line) moving it to a buy.
The SPX closed right on the last line of resistance from the only bearish fan on the longer-term Fib fan chart.

After the close, The Bulls put on a spectacular show today, with some VERY strong internals to go with that 3.13% rally. 95.21% of the total volume came from buy volume, and to top it off, all on 6.29:1 breadth, the bears were no where in sight today, and if there is follow-thru tomorrow, the bulls will definitely have things back in their corner, time for the bears to answer back, with even more impressive numbers.
The SPX did make a higher high and even cleared the 38% retracement level, which is perfectly normal for a 2nd wave retrace, but things start to go sour if the SPX were to break above the 61% retracement level at 1085. The 20 day MA would come into play before reaching that level, and is currently at 1076.15.
Soon after the SPX gave two buy signals this morning, a third was triggered, moving the trend to 25% bearish with a slight chance that there might be one more buy signal after the close when Stockcharts gets their daily charts updated, and if so, I will promptly post any changes. The short-term Fib fans still have the SPX in the bearish fan, but 1065 is the last line, before they would go bullish.
The count is OK at this point, as long as we get back to selling ASAP. One benefit for the bears was this rally really relieved a lot of over-sold conditions, and even push them to over-bought in the short-term charts, from the hourly on down, clearing the way for new lows.
Click here for a live, and updated chart!!!
8:07, If the SPX had a truncated 5th wave, that ended on the 5th of July, then it is possible that we are now in the "C" wave of 2 up. The SPX also broke above the trendline this morning and is very close to making a higher high, above 1048.08.
Click here for a live, and updated chart!!!
7:57, Resistance on the longer term Fib fans, is in the 1050-60 range.
Click here for a live, and updated chart!!!
7:52, The SPX finally made it out of the most bearish part of the short-term Fib fan this morning.
This is a comparison of the SPX, INDU, and the Russell. The Russell made a new low yesterday, and is really lagging behind so far this morning.
7:36, Still do not have much confidence in any one count, the Russell seems to be in a world of its own, much weaker then the SPX. As I mentioned in the blog yesterday, we did get two bullish signals at the open this morning, so the Trend is now at 50% bearish, and quite possible will make it to 25% bearish if we rally for the entire day.


  1. yestarday the SP sinal buy in value in 1023

  2. This entire decline looks like a series of threes to me Michael. We got an ABC down to your low at green 3. Then we got a clean ABC rally for a larger wave B (your red 2). Now we're in C, which *could* be a five wave decline but to my eye is shaping up for an ED.

    Overall correction isn't expected to end until October. For the ED we could get 'B' peak between July 11th/23rd, 'C' low August 11th, 'D' peak Sept 11th and 'E' low Oct 1st.