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Monday, December 13, 2010

Monday, After the Close and with an update on the Hindenburg Omen!!!

MAYBE, a major top was put in this afternoon, signs are definitely leaning that direction, but the SPX needs to follow thru tomorrow and start making some lower lows before getting too excited about a new trend change. The SPX did make another higher high today before reversing down late in the day, closing up only 0.01%. The Russell did not fare as well and closed down 0.61%. The squiggles do look completed for a 5th wave, although during this whole rally we kept getting other 3-4 combos starting from nowhere, that is, without a decent set of 1-2's before hand to match them up with. The indicators are supporting more selling as both the RSI and the STO have now rolled over to a sell on the hourly chart. On the daily chart they are both still in the process of topping, and in extreme over-bought territory.
One other interesting point today, the odds for a new Hindenburg Omen really increased again today with new 52 week lows now up to 93 issues, which is enough for that requirement, and in itself should be a warning to the bulls that this rally is falling apart. Definitely having the 52 week new lows more then double in the last two trading days while the major indexes were making new highs is not something one would expect to see in a sustainable rally, but more of something that would be seen at a major top. There are still two more requirements for the Omen, first, the new 52 week highs cannot be more then twice the number of new lows and this is where it fails today with 279 issues making new weekly highs. Also the McClellan Oscillator would need to be negative. A down day tomorrow would really put the bulls back against the wall and quite likely trigger an Omen.
I added three areas on the above chart marked with yellow dots that are the more important spots of support, all of which need to get taken out to confirm a new downtrend.
There were no changes on the Trend Finder II today, although the Dollar, Gold and Silver are VERY close to changing trends if they do not quickly reverse.

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