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Monday, October 4, 2010

Monday, After the close!!!

The above chart is from Planet Yelnick where he has a nice piece today about the similarities of the great crash and present day, please check-out his post, The 1937 Analogy is at the Top

After the close, the SPX sold off first thing this morning in an impulsive wave down, then spent the reminder of the day in what is best describe as another corrective pattern that moved up slightly from the low of the day, this is the third time this has happened since the high of 1157.16 three days ago, an impulse down near the open, and then a sideways, corrective move for the rest of the day. I have questions on the count, but have eliminated any 1-2, 1-2, 1-2 down count from the 1157 high because today's low was also an extreme negative reading on the RSI, and that is more like a reading that a 3rd wave generates, and not of a 1st wave in such a small degree. Never the less, the SPX is stair-stepping downwards making minor lower lows and is on the brink of confirming a new longer-term downtrend if 1122.79 gets taken out. The possibility of this whole mess starting two weeks ago still being labeled as a 4th wave is still there, but odds in my opinion are lower then the possibility that the rally has already concluded in a full fives waves up (40/60).
Breadth for the day ended at 2.625:1, decliners, with the small caps leading on low volume, and this is what makes me worried that the SPX could still be in a 4th wave. Volume was less then 1B on the NYSE which is not where it should be for a 3rd wave down, I would of preferred volume to be above 1.5B to have serious follow-thru to the last couple of down days to set a new trend. Bears need to be cautious until volume and breadth have a meaningful increase!!!
The daily charts could be very interesting today, once they are updated I will post any that are worthwhile in helping sort out what direction the trend is most likely heading.
Intra-day comments and chart are below!!!

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