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Thursday, June 24, 2010

Thursday updates

The SPX closed right on support of the bullish Fib fan, but has recaptured the bearish set, again, any sell-off tomorrow will be very bearish!!!
After the close, The bears came out swinging today, with a second 90+% sell volume day, that has done a lot of technical damage to the bullish case. I see three options on the counts right now, an extended 5th, which I have labeled on the above chart, a double zig-zag, a-b-c-x-a-b-c, that is almost completed, and that would be for the "B" wave down, of 2 up, or the third option, that things are going to get VERY bearish, with a series of 1-2's down.
On the trend finder, at the close, there are now 6 sell signals, and 2 buys signals, but those two buy signals are from daily charts that have not been updated quite yet, so as of right now we are looking at 50% bearish, with the possibility of the trend going to 100% bearish when Stockcharts gets their charts updated.
There is not much support left for the SPX before the bottom falls out, with the low of 1040.78, being the most important. 1052.25 is a minor level of support from an older low, but the SPX has not hesitated to break thru the the previous lows in the last couple of days.
Breadth ended at 3.36:1, decliners, not as bearish by itself, but when you look at the 90.72% of the total volume being sell volume, it is very bearish. If the Bulls do not get their act together tomorrow, 1008.55 is going to be in the bears sights quickly, the 38% retracement level from the high.
7:15, The SPX picked a very interesting spot to bounce, right on support of this long-term trendline, one that needs to give way for the bearish cause. Also of note, the 50 day MA is quickly approaching the 200 day MA, creating a "Death Cross", a longer-term bearish sign, and the indicators are starting to rollover to a sell!!!
*** On the Trend , there are now 5 sell signals, and 3 buy signals, so over-all, it is now at 25% bearish.
7:04, The VIX is knocking on the door of trendline resistance!!!
Click here for a live, and updated chart!!!
6:48, The SPX made a new low this morning, taking the a-b-c, three wave count off the table for this latest sell-off, leaving the two options, wave 1 down of the 3rd wave down, or wave a, of B, of 2 up. Both options would have a retrace for either the 2nd wave, or for the b wave. So, I am expecting a bullish afternoon after the 5th is put in. There is also a third option, but at this point is a lower probability, and that is the 1-2, 1-2, down option, but I really do not like the structure with that count on it, because the second set of 1-2's, is larger then the first set.