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Wednesday, January 5, 2011

Wednesday Updates!!!

The SPX did make a fresh high today, hitting the black median channel line of resistance near the close but keeping the trend bullish. Trying to get a decent short-term count is once again tough because of the over-lapping, corrective waves that have plagued this rally. In the bigger picture, as the SPX keeps advancing higher, the RSI and the MACD are also moving higher on the daily and weekly charts, soon these indicators could make higher highs and lose their divergence which would be result in a very bullish scenario and likely mean that the SPX could be in a 1-2, i-ii up pattern, the red 3-4 on this chart has bugged me for awhile because it always looked more like a 2nd wave, and not the standard 4th wave, something I have commented on a few times in the past. If this does become the case, the SPX is heading towards 1500+, the hyper-inflation count. The lower black channel line is still short-term support.
Breadth for the day closed at at only 1.51:1, advancers on average volume of 1.04B shares. These low Breadth numbers we have seen for the last couple of days suggests that neither the Bulls, or Bears are able to grab the ball and run, a lack of mojo in either direction and reminiscent of another 4th wave playing out.
We are seeing the same thing on the Trend Finder II, which has been whip-sawing for the last week. BTW, it is updated with Amazon and the Nasdaq moving back into the bullish column.
This is the weekly chart of the SPX and shows how close the RSI and MACD are getting to making higher highs and losing their divergence. It is truly do or die time for the perma-bears.
The Herd Moves Into the Digital Pasture

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