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Friday, July 16, 2010

Friday updates

After the close, A devastating blow to the bulls, when they could not hold that 1090-1100 range where a lot of support and resistance were residing, with a lot of Technical damage done in one day as five days of gains were wiped out in heavy volume. The daily candle is one of the largest candles of the entire sell-off. Trying to get a micro-count going today has been hard because there is a lack of 1-2's, with any sizable corrections to work with, so for now, consider this as either wave 1 down, or wave a, of B down. Any follow-thru come Monday will support the wave 1 count of the start of another major sell-off. Interesting that the last three months around OPEX Friday's have all been tops in the markets, this could be the 4th month in a row if things play out as the previous months have.
The SPX took out the 20 day, 50 day, and 50 week moving averages, leaving none of the more popular MA's as support, as well as breaking the bullish channel/trend line, and the short-term bullish Fib fans, and as bad as that sounds, the Russell even sold-off harder, down 3.82% and has retraced its rally by a whooping 61% as the SPX has only managed to have slightly more then a 38% retracement.
Breadth ended at 3.94:1, decliners on a very impressive 95.23% sell volume day.
The SPX did make a major short-term lower low, and a break below 1058.24 would confirm that the trend is indeed down, and the Trend Finder has three sell signals as of the close, and five buys, leaving that collection of indicators at 25% bullish.
With all the action today, I have a bunch of charts to post over the week-end, most likely on Sunday morning. Next week should be very interesting, if the bulls can not get this reversed first thing Monday, I think we could see major new lows before the weeks end.

Click here for a live, and updated chart!!!
9:06, If this sell-off continues, next support on the Fib fan chart is down around the 1025 level.

7:30, Here is a quick look at the Russell, where the case for a top being already put in is much more convincing!!!
8:55, The Trendfinder just got its first sell signal, and if this sell-off continues, I expect to see two more before the EOD.

Click here for a live, and updated chart!!!
7:21, The SPX is now in danger of losing the bullish Fib fans, another spike down, and it will be out of the fan, this is the bulls last support on the short-term fans.

Click here for a live, and updated chart!!!
7:12, Interesting sell-off, that never did make a new high, although it is very possible to have a truncated 5th, it is still on the early side to declare that a top was put in. Another possibility is that we are still in the 4th wave, but so far the sell-off looks impulsive, and that is not the style of wave that would fit a corrective 4th wave. With today being OPEX, anything is possible, so tighten your seatbelts, because today's ride could get bumpy.


  1. Thank you very much for all the facts, figures, analysis and charts. I really appreciate your work. Tom.

  2. hi, it was indeed a good day for the bears. but, would you say the STO and RSI for the SPX indicate an oversold condition at the end of the day and a likely bounce when trading resumes?

    it seems like an alternate way of labeling this downturn would be to count 1011 as the bottom of Primary Wave 2 and that we are in Primary Wave 3 now, having just hit the top of an intermediate wave (at ~1100) and now in an intermediate wave down that could bottom and reverse soon, perhaps around the 1058 support.

    clearly, i am just learning this method, but it seems this pattern and downturn could be interpreted as well within expectations for an early Primary Wave 3.


  3. semi, I have problems with that scenario, because that would mean last years rally was P1, and I have spent a lot of time, and reviewed many counts, and I have found NO way to label that rally as an impulsive wave without breaking rules of EWT.

  4. i can understand that if that wave cannot be considered impulsive that it would by definition require that the rally was a corrective leg in an overall bear market.

    what are your thoughts about the STO and RSI at close of the week?

  5. On the 15 mintue, they are in over-sold territory, but in the longer term, daily chart, they still are in over-bought conditions.