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Wednesday, September 1, 2010

Wednesday updates

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9:26, The SPX is firmly entrenched into the short-term bullish Fib fans now after breaking out of the bearish fans this morning, in order for the SPX to go back to bearish, it would need to break below the last bullish fan at the 1060 level.
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9:06, If the failed 5th option is playing out, it is possible the SPX is close to resuming its selling, it has already retraced more then 38%, and a three wave move from the bottom can also be counted as an a-b-c. Still am not 100% comfortable with any of the options at this point, it is just too early and not enough data is available for determining which count would provide the best short-term odds. For now the trend is neutral short-term, bearish long-term.
7:57, The long-term Fib fans are also showing the SPX has moved into a bullish trend, breaking above resistance this morning, if the trendline form the top does not hold, that opens the door for a test on 1131, the last major previous high before it hits another spot of resistance from a Fib fan.
7:54, Another bullish sign, the VIX dropped back below the trendline of support, and is now close to testing the 200 day Moving Average.
7:46, The SPX is coming up on a bundle of resistance from the 50 and 20 day MA's at the 1081 level, currently the 20 day is at 1081.15, and the 50 day at 1081.23. Trendline resistances does not kick-in intil the 1100 level.
7:36, Here is a larger picture of the two main options, a failed 5th wave with the red i-ii, or the SPX in a "C" wave of 2 up in gray.
For now breadth is supporting the "C" wave up, running 10.62:1, advancers, this is VERY strong bullish breadth, the only part missing is volume, but it is still early in the trading day and volume could pick up before the close. A break above 1081.58 would move the short-term trend to bullish as the SPX makes its first minor higher high. This also opens the door to 1131, but there is a lot of resistance to break-thru before that high can be challenged.
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7:18, The 3-4 combination on the SPX was busted when the 4th wave entered the price territory of the 1st leaving a couple different options, one would be a 5th wave failure, and the other would be the A-B-C down count that I have had in question marks for the last couple of weeks. Still early at this point to put odds on either, but both would have the SPX bullish for at least a couple of days, BRB with more charts.
The Trend Finder did signal a neutral reading right after the open.


  1. On your long term count wave 4 goes into the price of wave 1 from the April high which is not allowed in EV theory. Correct?

  2. The only time the 4th wave can enter the price territory of the 1st wave is in a Leading, or Ending Diagonal, the violation you are refering to is not valid, because I have it labeled as a Leading Diagonal.