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Wednesday, December 23, 2009

More Charts and Thoughts

Starting off with the RUT, you can see it makes a nice Triple zigzag which seems to be the theme of the market.  A new high today which is a requirement for the third top of a triple ZZ.  Notice the final zigzag has hit a parallel channel line at the same time. Also note how overbought the index is once again.

Next comes a potential squiggle count for the SPX. Obviously if the SPX is going to make a high to 1150+, then look at my alternate pink (i) and (ii) marked on the chart. I think Kenny has this potential count.  But I have no reason to think the SPX will go that high. Heck it cannot even deal with its 50% Fib at the moment.

And next the SPX 60 Minute chart. The blue line is the obvious target I suppose.  Of course the MM's have a way of gapping over these target lines lately.  But we'll see how it plays. Its still wedging. And I take that as bearish.

And here is my cute TED spread chart.  I counted a leading diagonal off the bottom and that called for a deep retrace wave (ii). It did retrace deeply and now maybe turned back up. Next would come a wave (iii) up. That of course would coincide with the start of P3 maybe....

And finally McClellan's.  I have some cool trendlines on it so check it out.  I was going to propose the black dashed line theory I have shown on the chart last week but never got around to it.

I'm not going to make a big deal out of this limited Santa rally.  We all suspected it was coming in the low volume holiday week and yeah, here it is. The MM's produced some 15 gap ups to achieve keeping prices elevated since November.  A herculean effort but here we are and there is an orgy of "januray effect" buying and end of year window dressing occurring.

Take advantage of expensive prices!

Besides we seen it coming anyways with the final ABC zigzag. Now they are playing out. So no great surprise.

I propose that there is actually a pent-up demand to sell.   

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