Thursday, August 26, 2010

EOD tomorrow will clear many cloudy issues.

On wed. 8/25 SPX made a LH and LL and the market closed positive 3.4 and today 8/26 SPX made a HH and HL and it closed down 8.1.  I would surmise the trend is up because HH HL but I am very iffy about that.  Gann date of 8/26 was rather mild.  SPX opened nicely up but was in a rush to make the high of the day early in the morning  at 7.45 after that it  was all down hill.  An attempt was made at 12 noon that lasted till 12.45 and then tomorrow's GDP fear set in and SPX sank under its own weight  in a rain drop fashion to colse down 8 points.  1039 to 1061 was a nice 22 point rally and great place to short at or near 1060 with a cover at 1063.  This market I believe is in serious jeopardy of making a intra month reversal below 1010 and raindrops will turn into water fall.  The very first chart is the rally from 666 to 1220 and the drop since then.  The previous bottoms very seldom act as support.  It is the previous tops on its rally from 666 to 1220 that should be watched.  IMO the first good size stop is around 945 then 875 ,835 and 803.  The red trend line is the controlling line when it breaks there could be some fire works.  The point that I am most impressed with is that we have only had 38% decline of the rally from 666 to 1220. 
The next chart is  blow up of the decline from 1220 to 1010 and the rally back to 1129 about 58% But the fact that we are back hovering near the 1040 lows is bothersome.  The third chart is an important one.  At 1025 SPX would have lost 7/8 of the rally from 1010 to 1129 and is a very good place for it to show some bounce. The last chart is TZA the blue trendline was the first one I drew.  The rest are parallel lines.  This is showing a slightly different picture.  If it moves up to 41.8 and reverses that is potential triple top. If it goes below 37.6 that could be a Gann 4 and and TZA could lose some ground fast and markets rally.   TZA has rallied back after losing only 3/8th of the rally from 28.8 to 41.8.  I like this chart.  I will be watching this closely.  I still use DMRM 10/20 cross and D2PL as my main tool.  My black book says to stay short or find good place to short. 

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