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Friday, January 28, 2011

Friday Morning Updates!!!

10:35, The VIX has totally broke above the Bollinger bands, this is something the bears need to be aware of, because odds are high it will reverse to recapture the bands. On the day the VIX is up a whooping 20%. One positive aspect to today's move is that it has also broke above the trendline of resistance, this needs to hold. Ultimately, the bears need the VIX to run up and break-thru resistance of the 200 day MA at $23.08.
9:35, The Dow Transports are at a very critical level right now, testing the previous low, if it breaks down here odds are good that it is starting a 3rd wave down. The SPX bounced up a little from the lows, but Breadth is still increasing, now up to 5.82:1, decliners.
8:54, The SPX is now testing support from the previous low, and the 20 day MA at 1281.48, this is the spot that is has caught support from in the past, one that the bears need to break below with conviction. If support does give, next in line is the low of 1271.26.
Current Breadth is now up to 5.28:1, this is getting VERY bearish, but it does need to hold thru the close, other-wise the dip buyers are entering the market, and we could get a large bounce.
8:08, This here could be the most important chart of the day, maybe even the month, the US Dollar, although it might be hard to tell in this picture, the USD does appear to have broke above the trendline of resistance this morning, upping the odds that it has put in a bottom.
Breadth is now accelerating to the upside, 4.47:1, the bears need to hold these levels at the close!!!
7:56, One of the big movers this morning has been the VIX, up 10%, and it did break back above the 20 day MA, just as in the other indexes, just inverse, the VIX needs to start making higher highs.
Current Breadth readings are now at 3.97:1, decliners, this sell-off is starting to strengthen, but the bears need to keep following thru for a chance that we are in fact rolling over the larger term trend.
First support on this chart is the 20 day MA, which has been a major point of support for the last five months, currently at 1281.88, the RSI now has double divergence happening. IF the SPX can break thru the 20, next up is the 50 day MA down at 1248.06
The Russell's 1-2 down count still looks good, but time has came that it NEEDS to break down and make a lower low at 771.71. The indicators are behaving perfectly for a bearish scenario, with divergence and now, all indicators on a sell, the RUT just needs to follow-thru and produce that mystical 3rd wave down.
Click here for a live, and updated chart!!!
At the open the SPX did break-up and made a headfake in the Bollinger band chart that was posted yesterday afternoon, then quickly reversed. Breadth currently is running at 3.85:1, this should give some hope to the bears that this sell-off does have some legs, but we really need to get up towards the 5:1 level, and start making some lower lows before getting too excited, however, we finally do have a nice impulsing style sell-off.
BTW, I entered a long postion in TZA at $14.76 this morning, and now have a stop at $15.29, which will move higher if TZA keeps producing higher highs, a trailing stop using previous important highs/lows.

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