Thursday, After the Close!!!

The Dollar had another good day, but is still just shy of making a higher high above $78.61

After the initial gap down open where the SPX made its low of the day, it slowly retraced higher in a corrective fashion for the majority of the day. The squiggles today most likely would be part of a "B" wave, or possible a 2nd wave up, because of the over-lapping character to the micro waves. The multiple channel lines are more telling then the EW counts all pointing to more upside for the SPX after this consolidation is wrapped up. For any bearish scenario the SPX still needs to break below the lower green channel line to get the ball rolling, until then the trend remains bullish.
Breadth was barely on the bullish side, closing at 1.82:1 with only 951M shares traded on the NYSE, marking today as the lowest volume day of the week.
If you want to checkout EWI's counts on all the currencies you can do so free for the next week during EWI's FreeWeek of FOREX analysis and forecasts now!!!

Thursday updates!!!

This is a comparison of the percent difference (spread) on yields between short, and long term treasuries, using the 5 year and 30 year bonds. IMHO, this is not healthy and can only end badly.
Same chart as above, but with an over-lay of the SPX, interesting that the relationship was inverse, that is as spreads diminished the SPX was moving higher, and when spreads increased, the SPX was selling-off. Now they are both running together, yields are spreading as the SPX advances.

Click here for a live, and updated chart!!!
7:39, Last Fib line support from the gray fan is at 1200, a break below here opens the door to a test of 1150 from the longer-ter Fib fan.

Click here for a live, and updated chart!!!
7:33, For any chance of a new down trend the lower channel line needs to break first, then the SPX can start testing the previous lower lows.

7:29, There is a decent down channel forming on the SPX.

Wednesday, After the Bell!!!

I do not think Ben was expecting this, now the yields on the shorter term treasuries are turning up. Is QE2 discouraging buyers driving rates up, or are investors fleeing US Treasuries all together.

The 20 day MA has been important support for the duration of this rally, currently at 1192.05, and would be first support if the SPX breaks thru the lower channel line at the 1200 level.

The BKX is still with-in the last bearish fin fan, no where close to making higher highs as in the major indexes, I still believe that the Financials will be the leader on any significant sell-off because it has been the weakest sector during this current rally.

Todays sell-off reversed, working its way higher for the reminder of the day is most likely a "b" or 2nd wave up, much more corrective looking then impulsive, if so a test of the lower channel line should be in order, with any break below pushing the odds towards a 3rd wave down.
Breadth for the day closed at only 1.63:1, advancers, on good volume, 1.12B shares traded on the NYSE. Tomorrow could be interesting with the start of the G-20 meeting, but at the same time it is also a Federal holiday which should mean light volume for the rest of the week.
The FED announced it schedule this morning for POMO, the Tentative Outright Treasury Operation Schedule. Guess Ben was not satisfied with every other day for purchases, because now we have them every freaking trading day. At this rate, QE3 will be done on a hourly schedule next.

Wednesday updates!!!

Click here for a live, and updated chart!!!
7:46, The SPX is once again back in the least bullish part of the gray Fib fan, a break down and out of this fan opens the door to a larger sell-off with next support down around the 1150 level from the long-term bullish fan.

7:30, The dollar continues to run higher, making an intra-day high of $78.31, breaking above $78.61 would be the first higher high, a sign that the uptrend has some legs.

Click here for a live, and updated chart!!!
7:15, The SPX opened flat, then proceeded to sell-off, currently down 6 points. Channel line support is at the 1195 level, and the 20 day MA is at 1191.45. For the squiggles, a break below 1195.89 would confirm a 5th wave was in, because the 4th wave cannot enter the price territory of the 1st. So far the VIX has not confirmed a strong sell-off, and is only up 3.77%. Breadth is currently running 2.39:1, again not indicating a strong sell-off just yet.