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Sunday, January 30, 2011

Sunday Observations!!!

Here is an updated look at the Fib fans on the SPX. The SPX did break down below the gray bullish fan that has been support for the last couple of months on 1/19, and since the same line has acted as resistance. The is a mydrid of support from various Fib lines between 1200 and 1250. In order to put this current rally from the July lows to bed, the SPX needs to break below 1175, which is the lowest dark green line. For the more bearish, the SPX would need to break below the long-term lime colored line around the 1100 level, at this point the SPX would be clear of all the bullish Fib fans.
The Trend Finder II has been updated for the dailies, and the weekly charts. There are some important changes, including the one above. The weekly Russell has triggered a sell signal, not something that happens every month, if fact there have only been three sell signals on the Russell since the big bottom back in '09 until this newest signal triggered. The moves following these signals are of two varieties, sharp sell-offs like we saw back in April this year that are great money makers because a new trend has been established that is more impulsive and tradable , or flat sell-offs like we see in the majority of 4th waves where the price action whip-saws, these patterns are harder to trade longer-term, a great example can be seen on this chart with the signals between the months of 11/09 thru 2/10 of these flat corrections.
If we do not see much follow-thru to Friday's sell-off next week, odds quickly start rising this could be a flatter-sell-off and not very tradable on the long-term.

The Elliott Trader has his new video out this morning, included with a quick look at a couple of the Middle Eastern Markets, Enjoy!!!

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