Friday, July 9, 2010

SPX EOD

Four green days in a row and what appears to be a bullish three white soldier candlestick formation on the daily charts. However, from a short term trade (hourly chart) perspective, a short position would be a higher probability bet since both bear and bull counts, including the alternate bull count, indicates a pullback is due soon. 

BEAR COUNT

This count of course is still very valid. The market is fast approaching the 61.8% Fibonacci retracement level since the 1131 high. This fits with a wave 2 retracment.

The MACD looks pretty extended and the histograms are indicating a sell signal is fast approaching. A minuette (iii) of minute [iii] down is on tap based on this count. However, keep in mind the MACD daily just signaled a buy and overall positive divergence. So given that, if the bear count is truly valid, the minuette (ii) may have some more to go (higher). 

BULL COUNT

As the bear count above is looking for a minuette (ii) top, this bull count is looking for a minuette (b) top. The situation is nearly identical with the bear count above on the hourly chart here. A pullback is coming soon as the MACD is beginning to indicate.

I'll be watching that pink descending trendline, which happens to fall near 1000 right about now. Hmmm, that's just about where the 50 daily SMA resides at the moment as well. We'll see. 

Pay particular attention to the alternate count on this chart as well. I show that it is possible the entire correction from the 1220 top is complete and we are now working towards new highs. Based on this alternate count, we are looking for a minuette (i) top. Once that top is complete, a pullback would be expected, which corresponds with both the bear and preferred bull count above.

So if the bears want to flex their muscles, they will need to take out 1040. If not, my bull counts will be the one to follow. 

SPX MAs

The market closed over the 20 daily SMA and 21 daily EMA. MACD again confirmed buy signal with a positive divergence and what appears to be a very bullish three white soldier candlestick.
Just putting this chart out there again. Once again, we have a previous trend that was up, then it was followed by a somewhat sideways range and ends/is ending with what appears to be a wedge right at the 38% retracment level. To me that looks like a potential continuation pattern. Place your bets....




Last but not least here is this chart again.

Heading for that 25% channel with a solid three white soldiers. It surely looks like a good channel and trendline to watch.
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