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Tuesday, October 19, 2010

Tuesday updates!!!

11:12, On the second attempt the SPX had no problem breaking thru the 1166.71 low, and is now impulsing towards the next low of 1155.71, which would help confirm a new down trend has began. The EW count down so far is three waves, which also can mean an a-b-c. Downside target for a 3rd wave is in the 1155 area, where the 3rd would equal 162% of the 1st.
7:44, Although the VIX is up this morning, it is not very excited about this mornings sell-off in the equities markets, not very bearish for the SPX in other words. The VIX needs to break-out of the downtrend, and print a higher high above 24.52 before it would signal that a new trend is in progress.

7:30, The Dollar did catch a bid this morning, making an intra-day high of $78.08, which increases the odds that a bottom of some sort has been put in. Gold is getting hammered today, down close to $38 bucks at one point. Because Stock Charts does not offer intra-day data for the Dollar Index, I had to hand draw today's black candle using data from another site.


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7:03, The SPX internals are bearish this morning, with Breadth currently at 6.15:1 on 91% sell volume. I am still sceptical if we are in the start of a new down trend, the SPX has yet to make a lower low, below 1166.71, although it has broke the channel line, it would not be the first time that has happened. With the squiggles so open to various interpretations, it is very possible that we are working on a 4th wave of some degree. So far this morning the structure is looking impulsive, with 5 waves down, so a retrace of 38-62% would be expected here soon. The question will become if this mornings sell-off is a 1st wave down, or just part of another correction/consolidation to the current rally. If the SPX is truly starting a new down trend, it needs to follow-thru and take out 1155.71 before I get too excited about going bearish. The Trend Finder is on the verge of going 50% bearish (currently neutral).

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