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Thursday, August 12, 2010

Thursday updates

In another blow for the bulls, the Summation Index printed its second red bar, odds are now very good that we have started a new longer-term downtrend, especially if it continues to accelarate downwards for the next couple of days!!!
The Dollar is now firmly back into the bullish Fib fan, as soon as there is enough data, I will add a shorter-tern set of bullish fans
The Euro continued its slide today, after breaking below the trend line early this week.
After the close, First off, we do have a Hindenburg Omen triggered today, and as soon as Stockcharts gets the McClellan Oscillator chart updated, I will have a full post on it, but right now the Wall Street Journal is reporting 106 new 52 week highs, and 81 new lows, while Stockcharts is posting 83 highs, and 76 lows, both qualify and as long as the McClellan Oscillator is below "0", a signal will be triggered, I am confident with today's action it will be, more later on this subject.
I removed the optional counts on the chart because today's price action turned into a flat correction, instead of sharp one, which fits a 4th wave much better then a 2nd wave, that would signify one more wave down to complete the 5th wave. I am going to guess that the level for the 5th to finish up would be in the 1070 range, to try and fill that open gap before reversing into the 2nd wave up. The trend is now confirmed as down because that final low I was waiting for has been breached when the SPX broke below 1088.01. Next level of support on this short-term chart would be down at 1065.25. The SPX did close below the 50 day MA at 1087.67, leaving all the major Moving Averages (20, 50, 200) as resistance now, both daily, and weekly!!!!
The speed of this sell-off has been amazing, wiping out thirteen days of gains, in only three days, this is not bullish at all.
Breadth for the day ended at 1.32:1, which is typical of a 4th wave retrace, and on low volume. This is a period of consolidation as the SPX prepares for it next move down. Days like this bring extreme over-sold conditions back to more normal conditions clearing the way for more movement in the direction of the original trend, that is, down.
9:51, I added another possibility to the counts, "ET", a regular from the chat-room and a great Elliott wave counter that thinks out-side the box brought up this option, a 1-2, i-ii count for this sell-off. I really like the way it fits in the chart, and in the channel, it also helps explain why the indicators were bugging me on the counts I had this morning, where the sell-off this morning had low breadth, that would fit in a 5th wave, but the RSI was still dropping on the longer term charts, but should of bottomed for the iii of 3 wave yesterday. This is a much more bearish chart then I had going because we have not even hit the meat of the 3rd wave of this current wave.
9:39, The Bollinger bands are closing in quick, normally when they get tight, the SPX will make a large move in a break-out.
BKX is now firmly in the last long-term bullish Fib fan, breaking below the line yesterday that had been support for the last six weeks, now that line will become resistance with last support from the bullish fan at $42.50.
Click here for a live, and updated chart!!!
9:11, The SPX is caught in a web of short-term bearish Fib fans.
7:59, Here is a simplified count on a larger scale, there is more then one way to count out the sell-off for the last four months, but this is my preferred count. 1056.88 is the most important low on this chart for support as of now.
7:50, The SPX finally recaptured the bearish Fib fan, next area of support is now down at 1050.
Click here for a live, and updated chart!!!
7:37, Breadth is running less then 3:1 this morning, not near the levels we saw yesterday, and that makes me believe that a 5th wave is more likely then another 3rd wave down. I am still not convinced though that I have the 3rd wave labeled in the right degree, it might need to be moved down to today's low, there are mixed signals going because the RSI is supporting the 3rd wave down this morning, and breadth is supporting the 5th wave.
The SPX did make a lower low and broke and broke below 1088.01, next support from an old low is now at 1065.25.

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