Wednesday updates

The Dollar finally printed a black candle today, but it still needs more strength before it can start to challenge that first line of resistance from the bearish fan.

The VIX did try and get a rally going this morning with a quick jump over the 200 day MA, but that did not last long and the VIX closed below the 200 day MA. One interesting point on the VIX, it has not been making lower lows as the SPX has been making higher highs, diverging!!!

After the close, That "B" wave is really looking good now, and explains why we have been in a tight consolidation pattern for the last couple of days as seen on the Bollinger band chart posted below. If the bearish option, of the Ending Diagonal plays out, we should get an over-throw for the 5th, and final wave, and an immediate reversal followed by hard selling. The SPX stll needs to stay below 1152, so the 5th wave does not become longer then the 3rd wave.

The Bullish option is alive, and does have a bit more Technical support for it, but back to the old problem of the 1-2, 1-2, 1-2, count that never seems to play-out, this time for the bulls. If the SPX is indeed in a 3rd wave up, it needs to really get moving and start posting higher volume and breadth numbers then have been posted so far in this rally from early July, same problem that has frustrated the bears this year, that 3rd wave down never gets going.

Breadth for the day ended at 2.89:1, advancers, a improvement from yesterday, but still not strong enough to suggest a 3rd wave up. And the Volume was again very weak.

The SPX did make a higher high today, so for that trend, it is still bullish, as well as the Trend finder. Levels remain the same as yesterday

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8:01, This has been my favorite Fib fan chart for the last six months, the BKX has done a tremendous job of respecting the Fib fans. The BKX is still in the last part of the bearish fan, which is the weakess, a break out of this fan would be a longer-term bullish move.

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7:37, The SPX is coming up on its last point of major resistance on this chart before making new highs, the older high at 1131.23. Also has cleared the bearish Fib fan, leaving only one fan line left that is bearish, and that fan is on the weekly charts, from the highs back in '07.

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7:26, The tight Bollinger bands are still in play this morning. When they get this tight there is normally a break-out and a large move follows.

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7:21 The SPX had a gap up, after the open, then quickly reversed, if 1116.76 gets taken out on the downside, that gap-up could be considered an exhaustion gap, a last gasp, so to speak before topping. 1088.01 would need to be taken out to confirm that a top of some sort was put in.

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The SPX at the last moment was able to recapture the shortest-term bullish Fib fan.