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Wednesday, August 25, 2010

Wednesday intra-day market updates

After the close, Things played out as expected today, although this 4th wave is close to reaching its maximum length, any break above 1063.91 would put this 4th wave into the territory of the 1st wave, a big problem in Elliott Wave terms, because a 4th wave can not enter the price territory of the 1st. It is very possible that this rally today was only part of a 4th wave, the "A" wave, because of the sharp look of the correction. As of now it has the appearance of a 2nd wave, not a flat correction that is common for 4th waves, but an "A" wave would fit in just fine, leaving the next day or two in a consolidation pattern to finish off this 4th wave. A break above 1063.91 would really change things, and there would be more then one way to label this, from mildly bullish, too very bullish. Right now there are a solid three waves down, which could be labeled as a "B" wave, with the final "C" of 2 left to play-out, that would open the doors to a test of 1131, not what the bears want to see.
The SPX did make another minor lower low today, with no higher highs, so the short-term trend does remain down, and the Trend Finder is hanging onto its 100% bearish reading, but it will not take much more to start having bullish signals flashing.
Breadth close today at only 1.55:1, advancers, which is pretty flat, and causes no alarm for the bearish count, if these readings were up in the 6:1 range, the bulls could grab the ball and have a decent run with it.
The first major moving average that would provide resistance is still way-up at 1086.63, the 50 day MA, with NO major moving averages available to act as support odds still are favoring the bears. There is just a lot more over-head resistance in place, compared to support for the SPX to make a major higher high at 1131.
More updates later as Stock Charts gets their daily charts wrapped-up for the day.
7:46, TNX, which tracks the yields on the 10 ten treasury bond broke down and out of the channel, this could have two meanings right now, a throw-over last gasp in the final wave down, or that TNX is in the strongest part of the sell-off, a 3rd wave down. The RSI and the Fib fans support the idea that TNX is in a 3rd wave down, but any sharp reversal that starts making higher highs or a break above the current channel could signal that a bottom is in. Next support now is down at 21.63, which if broken clears the way for a test of the lows back in late '08.

Click here for a live, and updated chart!!!
7:37, The SPX did break below support of the long-term bullish Fib fan this morning, and is currently back-testing, if it holds, the support will turn into resistance leaving the final bullish support for the SPX down at the 975-1000 level Click here for a live, and updated chart!!!
7:25, This is the most likely way the counts are playing out, that we will be in a 4th wave for the better part of the day. There is one very worrisome problem for the bears right now, Breadth is no where near yesterday's levels, and is currently running 2.72:1, also the Russell has not made a lower low over yesterday's numbers. It is possible to count this sell-off as a corrective wave right now that would fit in as a "B" wave of the 2nd wave up, if we start seeing impulsive five wave counts headed higher, the trend could change to bullish for the next couple of weeks as the SPX traces out the final "C" wave of 2 up.
The bearish count really needs this sell-off to continue printing lower lows, and lower highs to stay valid. We did make a lower low this morning, but any break above 1060.07 should cause concern for the trend which is currently down.
If the above count is correct, we should be seeing a stair-stepping downwards as the SPX completes a series of 4th waves.

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