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Wednesday, September 1, 2010

Wednesday after the close updates, Are the bulls back?

The Summation Index printed a black bar today, another sign that the downtrend is in jeopardy, if it continues to print black bars that start accelerating upwards, it will confirm the trend has changed to bullish.
Besides the cluster of resistance at 1081 the SPX also has a bunch in the 1100 level, with the trend/channel line from the top, as well as the 20 week MA and the 50 week MA at 1098.28, and 1103.79, respectively. This long term chart of the weekly SPX is still bearish with the perfect bearish alignment of the three major moving averages now that the 20 week has crossed the 50 week MA.
The is still a lot of resistance in the way before the SPX makes a major higher high at 1131, and moves the longer-term trend bullish, a break above the 1100 level would be a very discouraging sign for the bears with that channel line breach and would up the odds that 1131 gets challenged.
The Bulls made a very nice run today, stopping just cents away from making an important minor higher high that would of confirmed a new short-term bullish trend is in place. The SPX also did not break above the resistance of the 20 day MA at 1081.35, or the 50 day MA at 1081.31. This has turned into a volatile week with the second day of extreme volume readings, Monday was the bears at 95.25% sell volume, and today was the bulls turn, with 95.97% of the total volume. Needless to say, but any follow-thru tomorrow with the bulls would turn a possible one day event into a new short-term bullish trend.
The short-term counts are numerous at this point with both bullish and bearish possibilities from this rally being labeled as an almost completed wave 2 up, all the way to the rally being labeled as finishing up the 1st wave of "C" up, a very large range. The next couple of trading days will provide some clues as to the intent of this rally. If the breadth continues to grow for the bulls (today closed at 6.24:1) there is a high probability that we are in the early stages of the "C" wave up, and if the bears take control back ASAP, with increased breadth, then this might of been a brief correction, or a bull trap. The bears have had a great run for the last month, it just might be time for the bulls to have some running room to get the conditions set back into over-bought territories for a 3rd wave down.
The Trend Finder remained at neutral at the close, with the very short-term signals all bullish, and the Daily(longer-term) trends at bearish. Which at this point is about right, it is best to wait for things to sort themselves out a little more before jumping on board for anything longer then a quick daytrade or scalp.
The intra-day updates are below with a few interesting charts, after Stockcharts updates their dailies I will post the important ones, hopefully there will be more clues in them.
***A big Kudos to Binve over at Markets Thoughts and Analysis for timing this rally perfectly, this is yesterday's post "Spliced"

4 comments:

  1. Hey Col, Thanks for the props bro! I appreciate that!

    ReplyDelete
  2. Get analysis. Just a grammer note. "Would of" should be "would have" and "might of" should be "might have".

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  3. I meant to type Great Analysis

    ReplyDelete