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Wednesday, July 28, 2010

wednesday updates

The VIX is knocking on the door, and is very close to breaking out of the middle Fib fan.
The Dollar remains in the middle part of the bearish Fib fan.
The SPX is still stuck between the 20, and 50 week Moving Averages on the longer-term chart.
After the close, Weird day, a slow sell-off filled with over-lapping waves until the last hour or so, where we definitely started to have an impulsive style wave. Over-all though the sell-off still looks corrective, and most likely would fit in best as a 4th wave, one degree higher then I had it labeled this morning. The SPX never did make any important lower lows, but did close that gap, and that is unusual to see the point of recognition being filled on a 4th wave. Just one more reason why my confidence level is low on this, or any short-term court, also missing is the extreme readings on the RSI normally seen in a 3rd wave.
The SPX did close a second day below the 200 day MA which is now residing at 1114.09.
Breadth finished at 2.01:1, decliners, which is consistent with a 4th wave, and does not support this sell-off as being an important market wide sell-off that has any legs.
The Trend Finder did have one of the indicators switch to a sell signal a couple of hours before the close, moving the Trend to 70% bullish.
1082.20 is now the next support level for the 50 day MA, followed by 1075.17, for the 20 day. Of note, the 20 day MA is rising fast, and could cross over the still fading 50 day MA here with-in the next week.
8:29, Gold continues its sell-off, making another lower low this morning when it broke below 1166.50, the next level for support is now down at 1124.20. This has been an easy chart to trade on, once that lower channel line was busted to the downside in late June, I posted this chart pointing out this fact. Also of note, the RSI is still trending down, and has yet reached a bottom. Gold bears need to watch the upper trend line on this sell-off, as a break out, could signal Gold wants to head back higher.
8:20, The VIX is still stuck in the middle of the bearish Fib fan, and as long as this continues, the SPX is likely to head higher.
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8:14, There is a big battle going on with the longer-term Fib fans for control, the SPX is trying to escape the last bearish line, and break above one of the bullish lines into a more bullish zone.
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7:19, There is a slight possibility that the "C" wave has ended as an Ending Diagonal, the only bad part, the sell-off so far does not look impulsive. For the other option on this chart (gray), the 4th wave can not enter the price action of the 1st, so a break below that red dashed line would invalidate that option. I still see no decent way to count this rally that gives me confidence to trade off of just the Elliott wave count.
7:08, The SPX has already retraced 50%, which is more then enough for a 2nd wave retrace. The upper limits are up around 1175, which is the 78% retrace level, and is the common level when correcting a Leading Diagonal. A break down in the SPX could happen at any time, as the counts are confusing, Mr. Market could surprise us with a failed "C" wave.
7:02, Yesterday I mentioned a third way that was possible to count this current rally, the Double zig-zag, a-b-c-x-a-b-c. The final "C" wave would get under way soon, the only problem with this count is how would it fit in the larger picture?
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6:57, The SPX seems to be losing some of its support from the two bullish Fib fans, leaving 1005 as the last spot for support from the most recent short-term fan.

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