Wednesday, April 13, 2011

Strong 2

RUT made its top at 859 on 4/6 last Wed. and since then it has been down hill.  While RUT was making an all time high SPX was no where close.  It made its high at 1339 and it also has been down and dirty.  We have now declined for 4 days in a row and RUT closed at the modified (close less than LOD +0.5 ) definition of  low of the day  today.  That has very good probability of producing a plus day tomorrow.  Also after 4 down the odds are very low we will get a 5th down day.  The second day of the rally after 4 down days is strongest.  In short I expect tomorrow to be plus and Thursday to be plusser. ( New word ).
  This SPX 15 minute TNA chart since the start of the decline. We haven't had any counter trend rally to the decline.  That also implies some one is in a rush to drop it quick and finish the drop.  Today's first low was at 81.62 and the second at 81.67 which is higher.  Preliminary sign of a bottom.  I expect tomorrow to be an inside day and an attempt to reach the 25% pint at 84.6.  MACD needs to be watched.  I found the three most watched stats MACD; Stoch (slow); RSI work best at shorter time intervals.  2nd and 3rd day of the decline were both DKOD giving the needed thrust to knock TNA from its orbit. 
This is my hourly TNA.  Here I will attempt to quantify a support point.  The 50% point of the rally from 68.77 to 93.59 is at 81.18 (palindrome) the 55.9% point which is (100- 1/2 of 88.2 Syl's number) is at 79.72.  These 2 points offer excellent support. There is also a congruence of median lines (fast and slow channels)  between 79.75 and 81.   I feel good in saying that TNA would find its bottom here if it hasn't already.  I am not changing my count are anything.  TNA has done 1 of 3 we are at the shakeout 2 thats why it has been trying mimic a  devastating decline.  Once this is over the 3 of 3 to the up side should start.  This is earnings season along with opex.  We have had 2 down days  in opex week to buy the calls back cheap and write expensive puts.  Next activity this week will be rally to buy the puts back cheap.  Full moon is on April 18th usually occurs near a top.
My conclusion is a rally is imminent. We will see it as soon it happens.
I am bullish but not blindly and will be watching the indicators keenly.
Thanks for reading my blog

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