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Monday, December 20, 2010

Monday, After the Close!!!

The SPX closed up 0.25% on a light volume day with flat breadth, 1.03:1 decliners, with 829M shares traded on the NYSE. The upper gray channel line continues to act as resistance and with the weak market internals over the last week I still believe we are most likely still in the 4th wave(blue). If we were in an impulsive up now I would expect to see breadth get at least up to the 3:1 level, or higher, something that has not happened yet. The RSI also is weak and is diverging with the SPX, and the STO is now back into over-bought territory after a brief pull-back this morning. We will see a break-out here very soon between the gray channel line of resistance, and the thin green minor median channel line that has acted as support for the majority of December. Odds are favoring a break of that support for the finish of the 4th wave down to the 1235 level, or down to support of the heavy green lower channel line.
The Trendfinder had a sell signal on the daily chart at the open on TNX, during the day it was able to reverse and cancel out that signal, however in the past these signals usually come back with-in the next couple of days.
The VIX did manage to close that gap created on this mornings open, and the Dollar is slowly gaining strength again making an inter-day high at $81.09, the highest it has been since the sell-off back on December 2nd. $81.525 is the level it needs to break above to make a higher high for the rally that started back in the beginning on November.
-Elliott Wave Tutorial

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