S&P 500 - September 30, 2010

Much Ado About Nothing?

Index ended -3, like flat, which is quite something given this chart


Days like this can be hard on trigger happy traders.

So far, from the look of the weekly chart, we have had a slow week.


This is a daily


We talked about a possible hit on the blue mid-line around 1155 and it happened. Is that THE TOP perma bears have been dreaming every night? I guess we will know at some point ;-)

Since bulls have a hard time getting into the upper half of the blue channel, let’s see how price has been doing in the lower half



I have divided the lower half into thirds. Notice how the top third has been containing the price. Index is running out of space and should soon either enter the second third or move to a new high.

I would like the index to stay above 1130, the breakout level. If it can’t, I would like it to stay above my top purple line, and I would like it to stay in the blue channel.

Daily volume expanded. Daily breadth was negative


McClellan Oscillator dipped a little more


Market has corrected substantially in short term breadth and short term momentum. Price, however, has shown resilience.

There are so many different ways one can count the smaller waves. This is one I showed today


Expansion in breadth was one criteria I had for up moves, and today’s spike clearly lacked that. Yet, notice how index has dealt with negative divergences. Not only it has not dropped, it has slanted upward. This must have made it really tough in perma bear traders.

On the positive side, index has worked off a lot of short term momentum without giving anything back. On the negative side, index is susceptible to a sharp drop that might force the momentum to bottom.

As I mentioned today, a move above 1145 increases the probability of the count, and a new high may help confirm it. As long as index stays below 1145, the above count is in danger of extending it C leg of wave 2 down, or even getting obliterated by the market.

This is another count


It may be setting a triangle or an irregular flat.

There can be numerous other counts, bullish and bearish. Important thing in my opinion is how index does with respect to 1140 and 1120 areas in the coming hours (days?).

I was thinking that today’s econo-news could possibly shake the index into some trend out of this range, but market decided on an in-range Yo-Yo. Tomorrow’s another so-called important econo-news.

OEW pivot support at 1136 and 1107. Pivot resistance at 1146 and 1168.

Long term trend is up. Mid-term trend is up. Short term trend is up (keep an eye on 1140 and 1120)

Have a Nice Evening!