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Wednesday, June 10, 2009

Daily Tick Chart

The daily tick chart shows the second lowest reading since the March rally began. Combine this low tick reading with the fact that the market still managed to hold the triangle boundaries and then finished at 939 SPX just 12 points off its cash index high, well that may be a recipe for a bullish stock-buying kind of day, one in which does not finish in yet another day of doji candles. Just the kind of day or 2 you need to challenge a major resistance area after tracing a long-winded triangle.

Technically the tick made a new recent low yet the SPX did not. That shows divergence. The tick is (very likely) ready for a nice rebound.

Kenny can surely explain it better but I think thats a decent way to look at things.

Total volume obviously needs to pick up a bit to break above 950. Volume has been weak and that has been expected. Yet low volume consolidation periods are also considered short term bullish so there are two ways to look at things. The greatest volume period of the rally is most likely behind us anyways. A final short squeeze of 950 will be the juice that helps any final run higher. Even my mom is shorting 950....hehe (thats a joke!)
I still like a blowoff 5 wave move to get above 950 to get the media in a frenzy and Cramer jacked up. The 999 target has moved a bit lower due to a lower [e] wave spot. I have 62 + 927 = 989 as a C = A target. Thats 10 points shy of the magic 1000, and thats the way it usually happens, 10 points shy of the obvious!

15 comments:

  1. I love you and your 8's and 9's. Do you subtract 1 from everything because you're a permabear? :)

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  2. Daneric,

    would you like to eachange links?

    I am at

    http://markettime.blogspot.com/

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  3. Oh man I do that all the time Mark thanks

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  4. Dan...you and Kenny have given me cold chills with your perfectly aligned targets. And WOW, have you been hot lately. (another dinner coming for you guys, maybe more...and glad to do it ;)

    Something I've not heard anyone mention, but in a candlestick chart on the $COMP, there is a big 40 point unfilled GAP from Oct. 3 - 6. The drop went from 1947.39 to ~1905.

    I have to believe it's a very tempting target if the $COMP can finish this breakout to a new high.

    fuzzier_joe

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  5. "Everyone is short at 950" really? :)

    The short interest on the major banks is like 1% of the outstanding shares...used to be 30-100%.

    There are no shorts left to squeeze...

    :)

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  6. i agree..everyone is short at 950? more like everyone is playing the exact same triangle for the last push up..a tossup at best imo...

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  7. there are no shorts to squeeze?>>>

    wait until the first sign of major weakness or a news. you will see that fixed in couple trading days. same big boys who pumped and are fat cats, will ms/gs/jpm will move to the other side. since money is not coming from spreads and fees, from traditional businesses, trading has to deliver. long side rewarded them nicely from mar-may, now see what happens jun-jul.

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  8. I would just like to say I recently came across your blog and your call from yesterday appears to be dead on. I'm not a big believer in EW's because many times people's counts dont line up with basic TA but yours certainly does and it saved me from closing my long position before the huge EOD rally yesterday. Keep up the awesome work, I'll be keeping a close eye on your analysis!

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  9. I would encourage anyone who benefits from Dan's work to show him love by using the "donations welcome" button.

    Over the past couple of months, Dan and Kenny's blogs have been more useful than ANY other trading aids I've encountered.

    fuzzier_joe

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  10. Good call. But your peers at EWI don't see much upside left.

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  11. Dont worry my kids. Follow me to the heaven.

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  12. Dan, I am seeing Shooting star on S&P, $COMPQ and INDU... Any expert help would be appreciated.

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  13. "Tips to amateur"
    Buy on dips.
    Sell on rallys.

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  14. Sumit, I'll pick that one up for Dan since he did not. What will determine if the "shooting star" is bonafide or a fuhgazzi is what we have been saying about the two possible counts. This is the reason we get so many fake candle signals. The count is either ready or not. In any case, it is not the better form of a shooting star on SPX. The bodies are not separated by a gap.

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