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Tuesday, February 1, 2011

Tuesday Updates!!!

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9:19, Updated count, with the Breadth running at extremes, odds are very good we are working on the 3rd wave(black) of the 5th up(blue). We should be getting to close to seeing a 4th wave of consolidation building for a few hours here soon, this would relieve the extreme short-term over-bought conditions of the indicators, clearing the way for the 5th wave up.
The Dollar has taken a beating during the month of January, and once again is having another horrible day. When you consider how much the buck has fallen since the beginning of the year, it sure makes those increases in equities worth a lot less to the average investor. The VALUE of stocks since the beginning of the year has been declining, that is what happens during hyper-inflation, a false sense of worth. Your stock is up 5%, but the food and gas you need to buy is up 10%, while your wages are stagnant at best.
Breadth is continuing to increase for the Bulls case, now up to 4.86:1, this is very bullish!!!
Besides the bullish Breadth numbers, and the SPX breaking above the 62% retracement level this morning, this is the third reason why I believe that this move today is bullish, the VIX recaptured the upper Bollinger bands this morning, signing a bullish move in equities. The VIX is currently right on support of the 20 day MA. Playing the break-out in the bands have been a very high odd trade, once the VIX breaks out, then recaptures, the trend changes.
7:56, The bearish count in the Russell still has legs. Notice the optional bullish count in Gray.
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7:44, Once the SPX jumped above the 62% retracement level, odds jump to the bulls camp, because once that level is breached odds that it was a 2nd wave up quickly diminish. The SPX never did break-out of the bullish channel like the Russell did. Currently the indicators are back in over-bought territory which when dealing with impulsive waves means the 3rd wave up, in this case that would be the 3rd squiggle of the 5th up.
Breadth this morning has jumped up to levels that are bullish, currently at 3.92:1, advancers.

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