Monday, January 3, 2011

Bear growl turns into a meow

I got all the signals and indicators turned up Friday to go short.  Yet today the action was clearly on the other side.  I was short and got stopped out.  Today was a cloud walk day.  Not much of a difference between SPX and RUT.  There was a small window to get in to RUT (TNA) and 6.45 a.m.  They both lost about 25% of the day's range  to the close.  All in all great bull start.
This is my SPX hourly chart.  I have posted this many times. The rally from 666 to 1220 is 1 and the decline 1220 to 1010 is 2 and now in 3.  The current rally being 1 of 3 .  This is the count many EWticians are using.  Within that 1 of 3 the first wave lasted for 185 hours ( I had miscounted this as 180 before) A parallel conclusion can be made that the current 5 we are in will also last 185 hours.  We have done 173 and have 12 more hours.  That would take us to mid day Wednesday.  Boy I feel so inadequate in making conclusions like that but the point is the top if it is going to be here and it  should be here within that time frame or it is a different ball game.  
The banks did very well today.  The chart on left is FAS daily As expected it moved up to 29.50 the top line of the current channel.  Many a times I have noticed that FAS makes a high by gapping up the day  before like what it did today.  For shorts the bothersome point is it is above the 50% point.  The chart on right is FAS hourly.  It got to the intersection of the fast channel and the slow channel and stopped.  That is not very bullish.  To me these are breaks that are being applied against the bull run.  Sure the markets can blow through everything to new highs but the odds getting lower and lower.  The list of things against the market are EW counts; Channels; Put call ratios; Advancing number of hours; Technicals  RSI, Stoch etc.;  Low volume ; % of bullish advisors and many others.  and FOR the markets is uninhibited bullishness. 

I will just go with the odds and follow my indicators which are very short term and they are bullish.  Bear train hasn't got to the station yet before it can take off.
Thanks for reading my blog and offering me encouragement.

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