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Thursday, November 18, 2010

Thursday Updates!!!

This is what I consider the best way the SPX could playout at the moment, still very close to what I had, but now there is a possible bottom location for the "A" wave to work with. It possible that the "A" wave(blue) is not finished and today's move is still part of the corrective wave coming down off of the top. If the Blue "A" wave is in, then this would be the "B" wave and it MUST be a corrective wave or this count is invalidated. A normal 4th wave is a flat corrective triangle(3-3-3-3-3) and with this option, the SPX could be stuck in a corrective trading range for the next few weeks, so maybe we will have a Christmas rally after all.
The 1st wave(red) lasted about five weeks, so I would expect this 4th wave to last at least that long which puts it into the middle of December at the minimum. I still have a larger sell-off on the radar because some of the longer-term indicators are still pointing to this direction, and this definitely would not be the first time that a major sell-off started with what appeared at first to be corrective waves down, something to think about.
This is very unusual, Copper is tanking today as the SPX runs higher, normally the two run together. Copper although often thought of as a commodity, it also is an indicator on the health of economy, because industrial demand increases as an economy grows. This chart makes me wonder if today's move in the SPX is just a one day event, a bump in the road, so to speak.
Chartrambler has a great chart on his blog calling for a possible Top in Copper.
The 20 day MA is now back in play at 1197.40. The 20 day MA was major support for the latest rally and a close above here would be bullish.
This is a look at the 4 hour chart with the Trend finder signals, it is still reading bearish, it would go bullish before the daily chart, and would be an early warning that the daily downtrend is in trouble.
The Dollar bounced down right after hitting the resistance of the upper channel line. In order for the Dollar to continue it needs to break above this resistance. The short-term squiggles suggest that the Dollar has began a 2nd wave retrace. The Trend Finder still has the Dollar bullish in the Daily chart, but is now bearish on the 4 hour chart, suggesting that the uptrend is in danger.
Click here for a live, and updated chart!!!
7:13, The SPX is now testing the upper trendline, which if gives way, puts the highest probability on the counts is that wave A of 4 is complete, and the SPX is working on the "B" wave. The 1-2 down count is all but dead now. A break above the previous high of 1207.43 confirms the down trend is also dead, and the short-term trend is up.
Breadth is running 6.6:1, advancers, this is very bullish, but no where near the levels we saw earlier this week when declining breadth was close to 17:1.Click here for a live, and updated chart!!!
7:07, The SPX bounced right on the Fib fan line of support.
7:01, The SPX jumped way out of the Bollinger bands this morning, if the SPX does not immediately reverse to recapture the bands, the trend will most likely change as the Bollinger Bands play catch-up with the SPX.
6:54, This mornings gap up put a large dent in the impulsive count moving the odds back towards the sell-off from 1227 as being corrective. The down channel is still intact but the short-term down trend is now in jeopardy. There is an open gap that could get filled, and still keep the SPX withing the channel.

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