Tuesday, January 4, 2011

The descend has started.

The SPX opened at the high of the day and it was down hill from there.  The low of the day came a little before 10.  Then a slow and steady rally grabbed almost 68% of the decline.  Few things to note.  Today was an inside day.  After the big day yesterday that wasn't unusual.  Inside days are just pauses in the direction of the move.  Meaning rally should march on.  The chart on the left looks like there is an inverted H&S That is positive.  It was a 13.5 point decline from the high yesterday and that has happened before and that is neutral. It was DKOD with the high coming early in the morning.  That is big negative.  All put together it is 75% positive.  RUT is another story.  It had an intra day reversal.  HH  first and LL later.  After making the low a few minutes before 10 it barely got back 35% of the decline.  The range  expanded to 23 points. It also had a DKOD with high of the day coming within minutes of open.  And when RUT made the HH TNA did not.  All this spells negative with a big N.  
This is my hourly TNA.  It has started its descend.  It has given a false signal the first time.  It has now passed thru the DOMA for the second time.  It bounced exactly from the median line.  The back test is under way at should stop around 74.15 or so.  I was just taken aback by the exact bounce from the median.  I was expecting the entire pull back to be only up to 64 but the fierce drop today suggests it may go lower.  I don't have a bottom number I have to see some more data to forecast anything.
This SPX daily with a 22 day moving average.  My CIL buddy crystlz  showed this configuration late in the day and I picked it up and redrew it.  That black trend line is coming from 666 low.  It has proven to be very good resistance.  This is the third attempt to break it.  and it held and the attempt failed.  The mvg avg line is around 1249 anything below that would be harsh negative.  I believe that spx will go thru that.  Under current circumstances I am thinking 1200 and then 1160 but first I will have to see how tomorrow and Thursday come about.
I am bearish and the signals were good but they haven't tied the knot.  
Many a times I trade the small rallies within  a decline that is not to be confused as a change in my forecast that next 15 days are negative.
Thanks for reading my blog and offering me encouragement.

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