Thursday, March 17, 2011

Too early to ask is it over...

SPX did not make a higher high ; made a lower low and close in the negative.  SPX has now declined for 3 days in a row with increasing amounts of 7.9; 14.5 and 25.0 and the volume is also increasing from 4.0 to 5.2 to 5.8 billion.  What does that mean there is more and more conviction that decline is for real and people are heading for the door.  Some additional news about Japan and the market dropped 100 points hard and quick today. These are not signs of the same trend as before.  However there is no decline that goes on for ever ( We now know that there is no rally that goes on for ever either sorry $30 month advisers!! ) We will have a rally. When and how much it is much too early to speculate on that. 
The chart above is my Gann angle SPX hourly.  It is in junctures like the one we are in that I really appreciate the genius of Gann.  In the above chart SPX bounced exactly from the 4x1 line.  Last time SPX bounced near this line it advanced 30 points.  This time it will have some resistances to over come and the first of them is at 3x1 line around 1270.  I like this chart a lot. 
This is also SPX hourly and this is on a channel chart.  SPX hit the bottom of the slow upward channel and slightly below the fast channel and bounced of.  This is quite important and my conclusion is we have put a bottom at that point.  I am not ready to call it THE bottom or anything that would require more data. None the less it a low point.  Another point that this may be a low is that in Aug. the decline from 1120 to 1039  covered  blue half the big channel and the current decline has done the same on the upper red half.  
At right is the close up of the decline.  It is from 1344 to 1249 about a 100 points usually a good point to get a 30 or point counter bounce.  SPX has now declined almost twice as much as it did on the first phase or wave from 1344 to 1295.  Here are some fib calculations.  1344 to 1294 is 50 points the counter rally to 1332 was 38  or 76% . The current decline from 1332 to 1249 is 83 points and that is 167% of the first 50 point decline. 
This is opex week and generally we get at least one day of good decline and  one day of solid gains.  Well we have had more than our share of decline for the week next in line would be a rally.  Friday I think will be a non event.  Triple witching too many agencies watching so the market should flat on that day.  One more thing RUT and SPX are both negative for the year as of today but dow is not it is up a whopping 36 points.  
I am still very bearish.  The calls have been good so far.  We are hitting some extremes.  I need little bit of easing of tension in the market before the next move.  
It may come tomorrow.  
Thanks for reading my blog.

1 comment:

  1. Here's a man with an answer LOL