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Saturday, October 2, 2010

Weekend Observations!!!

Roy has a short clip on US T-Bonds he is sharing this week-end from his longer video version he provides his subscribers moving his advertisement to the end of the clip!!!
So, do we have a top in???

Another very important trendline is coming into play now, and could provide resistance that could cap this rally, the long-term trendline off of the all-time high is only a few points above the current level of the SPX.
The chart showing the percent of stocks on the SPX above their 50 day MA has now reached the area where tops are made, once the 20 day MA(blue line) crosses over the price action, a top will already be in, a lagging indication, but great for confirmation of a top, or bottom.
WOW, This is the same chart as above, but on the DOW instead of the SPX, notice that it has peaked and already confirmed a new down trend by the price action BELOW the 20 day MA. BTW, this is a four year look at the DOW, and this signal has been quite reliable in the past for picking tops, and bottoms!!!
The fall in the dollar is not a pretty sight, moving in only direction, straight down!!!
The Dollar has now moved into the most bearish part of the Fib fans, with the RSI and STO now in extreme over-sold territory, but with no divergence showing yet, in other words, selling momentum is not waning. The 5/35 Histogram is starting to show that sell momentum has peaked and is moving back towards the neutral line, where the trend would go back to bullish. The trend for now remains bearish!!!!
The daily chart of the SPX is loaded with signs that a top of some sort is upon us, the MACD is rolling over, divergence on an over-bought RSI, the STO rolling over to a sell, and the most important and favorite indicator, the 5/35 histogram is about to go negative, momentum is waning and very soon will be bearish.
The 1-2 down count, if correct will put the SPX in the range of 821 on a 3rd wave down (1.61 times the length of the 1st), as most of you know, I am not 100% confident on a P3 down, and play it more short-term, there is another possibility that the sell-off from the April highs that is labeled as wave 1, could also be labeled as wave "A", with all the sideways movement labeled as wave 2, being relabeled as the "B" wave, and with "C" still to come to complete a larger degree"B" wave. The whole "hope" rally from SPX 666 would then be labeled as the "A" wave with the final "C" wave still to come next year that would take the SPX to higher highs.(3-3-5)
I have noticed that the bullish bloggers have this labeled as a 1-2, 1-2, up since the low back in the beginning of July, I just do not buy that argument because the second set of 1-2's SHOULD be of a smaller degree according to Elliott wave theory, and as of now, they are equal in terms of price AND time, not to mention the way they have the whole hope rally labeled as an impulse wave. I have spent many hours trying to fit an impulsive count to that rally and it is impossible with-out breaking the rules, and if you ignore the rules, then why even use Elliott Wave because you already have a biased to ignore the rules that do not suit your preconceived outcome.(rant over)