S&P 500 - November 9, 2010

Seems like I was right to be concerned about how McClellan behaved on NDX. A couple of posts ago, I noted McClellan being subdued on NDX despite the reaction to the Fed-Ease announcement. It could not expand it breadth oscillators any further and we finally got a price set back.


NDX has been rising up a rather steep uptrend


Support is around the 1250 area.

S&P;s McClellan turned down

>
It’s important to see how breadth behaves, especially, as Fed gets to announce and exercise the details its bond purchase program

This is a weekly chart of S&P


1200 is an obvious support. after that, as long as S&P stays above the 1175 area, it’s either consolidating or advancing. It would be good for the bulls if index could cool off a bit to allow its MA(s) to catch up.

This is a daily


It should be of no surprise to readers of this blog that S&P's recent rise was capped at the mid-line of the blue channel. This mid-line has been a hell of a consistent performer for me during this mid-term uptrend – Super Line!

The other consistent performer has been the 13 EMA as support

I said that the kind of momentum bulge on RSI might exhaust the move for the short term and lead to a correction. I also said that the kind of RSI behavior were often followed by more price strength. So far, so good. There is no saying how deep we can correct. Since March 2009, many correctional waves did not correct the price more than 10-20 points. It, of course, depends on the degree of the correctional wave as well. Within the context of the count that I have been carrying, I cannot easily say whether we are within an intermediate wave 3 (purple) or a minor wave 3 (dark blue). That is because of the choppy action of the price prior to recent break out. I presented both counts last post.

As long as index stays above 1200, it’s either consolidating or advancing. Below that, there is not much support till the 1175 area.

Keep in mind that, as things stand now, S&P can correct all the way to 1150 without posing any danger to the current wave count.

This is a 60-min chart


So far, we have a pullback to the top a gap. Lower edge of the gap is around 1200 that we discussed above.

For now, as long as S&P is below 1215, price may be correcting a short term downtrend.

OEW pivot support is at 1187 and 1176. Pivot resistance at 1222 and 1240.

Long term trend is up. Mid-term trend is up. Short term trend may have turned down (a move above 1218 may re-instate the short term uptrend)

Have a Nice Day!