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Wednesday, August 18, 2010

Wednesday updates

Binve over at Market Thoughts and Analysis has a detailed post(rant) on Government debt, this is a in-depth, must read post, beware!!!
The Matter of Deficits, Sovereign Default, and Modern Monetary Theory
This is my prefered count in the longer-term, with the 1st wave down labeled at 1042.17, I still feel uncomfortable about labeling that the end of the 1st wave down at 1040.78, because that means that the 2nd wave would be a expanding triangle, that is, a-b-c-d-e, and 2nd waves are not supposed to be triangles. Triangles are the next to the last move before a trend changes and occur as 4th waves, or "B" waves, not 2nd waves. I am still open to the possibility that the 1st wave ended at the low of 1010.91, not yet enough to make it my primary count but a very close second. The current 2nd wave the SPX is in now still has room to move to the upside before the channel or trendline gets busted and still has not hit the 62% retracement level, leaving the shorter-term count as a double zig-zag plenty of room to play-out.
The Summation Index printed another black bar, but a saving grace for the bears is that it looks more like a consolidation pattern, instead of a reversal pattern. If the SI were to accelerate upwards tomorrow, then the bears need to worry, but as long as it hangs in the same area odds are that it will soon head in the same direction as it was going before the consolidation, that is, down.
After the close, Weird day on the SPX that at times became really boring, I have the 2nd wave up labeled as a double zig-zag, complex corrective now, but I do not have that high of confidence in it. The SPX never did make a higher high, so it is possible the 1-2, 1-2, 1-2 down count is still valid because the last 2nd wave still has not retraced 100%, only 99.9% or so, odds here are VERY low. The SPX did close on the trendline of support so any gap down open tomorrow would put the short-term bearish count back on the table. As I write this, futures are dumping, so the open might be interesting, BTW, Friday is OPEX, and that usually brings fireworks.
Breadth for the day was meager at only 1.44:1, advancers, on light volume, boring as well.
The trend remains neutral as no higher highs, or lower lows where made today, an inside day. And the Trend Finder is also Neutral, with short-term indicators bullish, and longer-term ones, bearish. This is unusual having the Trend Finder stuck in neutral for so long, a good sign the market is looking for direction. Not much more to add today, nothing has really changed since yesterday's close, I will update the daily charts later this afternoon when Stockcharts gets them updated and maybe there will be a nugget or two in there.
Click here for a live, and updated chart!!!
10:28, I had that bad feeling in my gut this morning that the 1-2, 1-2, 1-2 down count was just too good to be true, and now the SPX is very close to invalidating that count, so I have replaced the last set of 1-2's down, with a "X" wave for now. This opens the door for the SPX to head higher. The Trend is still neutral, which is good, since the SPX might be looking to test the 1131 high and the short-term count can go many different directions at this point.
9:40, The SPX is pushing on resistance of the last bearish short-term Fib fan line.

8:21, the bearish Fib fan line is still providing support for the SPX, the bears need this support to break down, the bulls need it to hold.
Click here for a live, and updated chart!!!
7:21, The SPX looks to be in a 1-2, 1-2, 1-2 down count now, only problem is ever time I see that count with a series of 1-2's something happens and the count morphs into an entirely different count. We will see, one of this times it is bound to be correct. The SPX still needs to break below 1082.62 to eliminate the 1-2-3 up count. Also still on the table is a complex corrective for the 2nd wave. The upper black channel line should hold if the above count is correct, and if the SPX does break above that channel line, I would be very suspicious that the 2nd wave up is completed

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