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Thursday, February 10, 2011
Thursday, After the Close update!!!
This is a chart of the SPX that goes back to 1929, with a long-term channel that started after the crash. This remains my prefered long-term count, although there are several other decent options. One of the main reasons this count stands out to me is because of the way the SPX peaked back in 2000 breaking above the channel line, this break-out to the top-side normally only occurs with the strongest part of the over-all wave structure, the 3rd of the 3rd wave then the price action recaptures the channel for the real 3rd wave. The top of a 3 of 3 wave also is when the Momentum along with the RSI normally makes it peak extreme reading.
This is a close-up of the above chart with the same exact major channel lines, plus some added minor lines. The SPX is extremely close now to hitting the resistance of the major long-term median channel line, this is an important line because it has been respected many times in the past, and could also prove to be the spot we get another trend change of some sort. A solid break above this line how-ever would be longer-term bullish and easily opens the door for a test of the all-time highs.
The SPX continues printing out a series of corrective 3-4 combo's this week as suggested back on Monday. The SPX does need to make at least one more new high for the 5th wave to finish out the count, how-ever as mentioned in this mornings post, a truncation is possible. Today's move remained corrective without any impulsive moves up, pushing the odds toward a still uncompleted 4th wave(blue) as the market closed. With this mess in Egypt, nothing is out of the question over-night, and hopefully you have adjusted your stops according for your risk/reward factors. This market is tired and weak.
Breadth closed at 1.12:1, advancers, on an increased volume, 1.01B shares traded on the NYSE. These numbers are consistent for a 4th wave correction.
The yield on the 10 year Treasury Bond closed at 3.70%, pushing the average 30 year mortgage rate up to 5.15%, if this trend continues, the housing market is one step further away from finding a floor on home prices.
The Trendfinder has been updated, and in case you missed this morning post, there are a few charts of interest worth checking out!!!