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Thursday, January 20, 2011

Thusday, After the Close, markets continue to weaken!!!

The VIX chart should be a little worrisome to the bears, normally when a break out of the Bollinger bands occurs, and then it quickly retraces back inside, it signals a trend change, in this case, it would be a Bullish sign for the equities market.
The squiggle count on the SPX can be counted in multiple ways, however, Breadth today was much lower today then yesterday suggesting the meat of the first wave down was yesterday, and today was a correction of that move down. I do have question marks on the 1-2 down because of the various ways it can be interpreted, including a possible corrective wave down, or wave "A" down instead of the wave 1 label. There was not much follow-thru today, but the SPX did make a lower low, with a bounce up once it hit support of the 20 day MA.(please see the charts down in this mornings post). There is also a gap at 1284 that was almost filled this afternoon. 1286.58 is the 61.8% retracement level and the high of the day did reach 1283.35, almost an exact 50% retracement (1283.66). The SPX should have no reason breaking above 1290 other then to back test the lower black channel highlighted in yellow as resistance.
Breadth for the day closed at 1.64:1, decliners on increasing volume at 1.19B shares traded on the NYSE. Earlier in the day peak Breadth was barely above 2:1, very weak IMO.
Tomorrow is OPEX, so it could be crazier then normal, but the SPX needs to show some serious follow-thru to the downside now, other-wise the odds start favoring a more bullish short-term outlook. The precious metals and commodities had a big down day, and could be leading this thing on down, BTW Copper, which tracks with the equities was down 2.77% today.
The Trend Finder II is updated, with a couple of changes, including the Nasdaq 100 going bearish, signals are finally starting to increase in strength.
Thar’s Gold In Them Thar Charts!


  1. Any thoughts on oil & oil service stocks? Thanks! Jordan

  2. Thanks for all your great work - and loving the Trend Finder. Loved the call on Silver, got in on ZSL to short Silver. Very nice day. I also would like to know your thoughts on crude. Maybe you could also add oil on the Trend Finder? Thanks again! Jason

  3. There is also a gap of .38 between Tuesdays close and Wednesdays open on think or swim charts. This makes me think that it's not finished. On the other hand your labeled 1 of 5 and 5 of 5 of the last sequence are both 15.59 and you just can't get closer to equality then that. I personally took a short at 129 and bailed 128 keeping a third with a stop at 130.7.
    On a side note, I would think the Dow would follow the spx in general and that count's out to squiggly lines on the down side till this afternoon.
    Love your charts by the way

  4. Attitude, and Jason, I will add oil to the trendfinder, I have been following /CL, which is the light sweet crude futures!!!
    Keep a tight stop on that ZSL because silver is reaching over-sold on the dailies.

    Gordon, I agree, and thank-you!!!