Market Update - 9/30/2009

Dow Jones Industrial Average: -29.92 or 0.31% at 9712.28

S&P 500 Index: -3.53 or 0.33% at 1057.08

NASDAQ Composite Index: -1.62 or 0.08% at 2122.42

NYSE Internals: 1258 Advance. 1763 Decline.

Another positive month into the books...

Interesting wave structures. The market isn't giving us a clear sign. Both counts are still in play. But we aren't impulsing down or up.

The next couple of days are important, it could potentially decide where this thing is heading. Break of 1039 on the SPX would mean we have topped, and are starting a severe downtrend. A break of 1070 means we are heading to 1100+. We could also remain range bound between the two pivots to shake out any weak bears or bulls.

Dollar was down. Crude and Gold both rallied nicely as a result. Tech was the strongest, financials were flat. VIX was also up.

Should be fun to see what happens!

Market Update - 9/29/2009

Dow Jones Industrial Average: -47.16 or 0.48% at 9742.20

S&P 500 Index: -2.37 or 0.22% at 1060.61

NASDAQ Composite Index: -6.70 or 0.31% at 2124.04

NYSE Internals: 1446 Advance. 1556 Decline.

Another day with fairly low volume. Funny thing is, we needed a close above 1060 to be bullish and a close below 1060 to be bearish. And of course, we close right at 1060 and 106.00 on SPY. Gotta love those market makers.

The wave counts are really choppy, and it's hard to come up with just one count. So far, both of my counts that I posted about yesterday could be in play. The only thing is, we seem to have 5 waves up and 3 down. That means we may be impulsing up. So my alternate count from yesterday might be right.

The hope for the bears is that the wave up from the low is an ABC-X-ABC, and we are starting a Leading Diagonal down.

Financials were once again leading the way. They were alone on that one. Tech was weak. Dollar was up, Crude Oil and Gold were down. VIX was up too.

Market Update - 9/28/2009

Dow Jones Industrial Average: +124.17 or 1.28% at 9789.36

S&P 500 Index: +18.60 or 1.78% at 1062.98

NASDAQ Composite Index: +39.82 or 1.90% at 2130.74

NYSE Internals: 2426 Advance. 609 Decline.

Market rallies on incredibly light volume. Lightest of the year, but it could be because of the Yom Kippur holiday.

Regardless, the rally today to 1065 wasn't unexpected. The only thing that is surprising is that it happened too quick and the internals were a little too impulsive. Not looking good for the bears right now. I will post 2 charts with my wave counts. One being my main count, other being my alternate count.

Main count:

Alternate count:

I'm afraid that my alternate count will play out, partly because we did impulse up today. Everything pointed to an impulse up except the volume. That's the last hope for the bears. If the volume comes into this market, it could sell off. Another reason I think my alternate count will be right is because the "sell off" at the end of the day today was weak. Looked more like a subminuette wave 4. If my main count is right, we should start selling off hard tomorrow because wave (2) completed today at the 61.8% fib retracement.

If the bullish count is right, we will tag that yellow upper trend line on the SPY daily, getting a partial gap fill.

Dollar, Crude and the S&P were all up today. Odd. I still think the S&P/Dow are wrong. Dollar should be rallying, markets should be selling off. Gold was flat. VIX was down. Financials by far were the leaders today, followed by Technology and Metals/Industrials.

Market Update - 9/25/2009

Dow Jones Industrial Average: -42.25 or 0.44% at 9665.19

S&P 500 Index: -6.40 or 0.61% at 1044.38

NASDAQ Composite Index: -16.69 or 0.79% at 2090.92

NYSE Internals: 1362 Advance. 1633 Decline.

We hit 1041 today, and held it as support. As I said yesterday, we need to break the 1044 area to continue to get some more downside momentum, but we seemed to have held that area for now.

We have also completed 5 waves down now, so minuette wave (1) is probably over. A bounce back to 1060 seems likely for wave (2). That is the 50% fib retracement of the decline so far, and is also a key point we broke down from, so we may test it as resistance now.

The candle stick pattern on the Dow, S&P and Nasdaq is pretty bearish now. In the past couple of days, we have had a bearish engulfing, bearish dark cloud cover, and now the ultimate bearish pattern... The Three Black Crows. This pattern usually appears at the top of a very long uptrend, and it signals a pretty hard sell off coming. It is the first one we have had since this rally began in March. At the March lows, we had the opposite pattern, The Three White Soldiers.

Dollar, Crude and Gold were all flat today. Tech and Financials are still weak. VIX was up earlier, but faded later in the day.

Market Update - 9/24/2009

Dow Jones Industrial Average: -41.11 or 0.42% at 9707.44

S&P 500 Index: -10.09 or 0.95% at 1050.78

NASDAQ Composite Index: -23.81 or 1.12% at 2107.61

NYSE Internals: 713 Advance. 2313 Decline.

Looks like I may be right by calling the top of this rally yesterday.

Market internals are pointing all to the downside. A/D line was bearish, most of the volume was also to the downside. TICK and TRIN are also pointing to more downside.

The bounce off of today's lows is definitely looking corrective right now. A good area for the bounce to test is right around 1057-1061 on the SPX. It lines up with some pretty good support/resistance from previous days. A break of that area will probably mean we try to run towards the mid 1070's again.

For right now, I will label the down move so far as a Minuette wave (1) of Minute [i]. The wave (2) bounce should take us back up to that 1060 resistance zone. After that, wave (3) could take us to the 1018 area. But we're not going much down until we break 1044 on the SPX. After that, we should see a nice sell off.

US Dollar was up over 1% today. Like I posted a few days ago, the Dollar may have bottomed, which means the market may have topped. Crude Oil got hammered once again today due to the strength in the Dollar. Gold was also crushed. Technology and Financials were both also weak, and they have been the leaders of the market lately. So until someone else decides to run with the flag, this thing is headed down.

US Dollar Chart

Some Bearish candlesticks that I was talking about in yesterday's post.

S&P500 Daily

Market Update - 9/23/2009

Dow Jones Industrial Average: -81.32 or 0.83% at 9748.55

S&P 500 Index: -10.79 or 1.01% at 1060.87

NASDAQ Composite Index: -14.88 or 0.69% at 2131.42

NYSE Internals: 1070 Advance. 1957 Decline.

That's it. I'm calling a top. The sell off at the end of the day was HUGE. We lost ~180 Dow points, market internals reversed down, we sold off on really high volume. Clearly impulsing down.

This sell off looks more promising than the one we had two weeks ago.

The wave structure also called for a higher high closer to 1100. We hit 1080, and sold off immediately. 1080 wasn't really a major resistance, so the sell off was unexpected. If P2 was about upside surprise... then P3 is all about downside.

Looking at the daily candlestick pattern. It doesn't look pretty for the bulls. Classic shooting star and bearish engulfing. Can't ask for a better bearish pattern than that.

The US Dollar also rebounded back .70 from its lows, which is a pretty big bounce. It was also a broad based sell off, including financials and techs. VIX rebounded as well. Crude Oil got hammered. Gold also sold off.

If this truly is the start of a major sell off, we should see this continue for a few days before any significant bounce. Let's see how the dip buyers pull themselves out of this one. ;-)

Market Update - 9/22/2009

Dow Jones Industrial Average: +51.01 or 0.52% at 9829.87

S&P 500 Index: +7.00 or 0.66% at 1071.66

NASDAQ Composite Index: +8.26 or 0.39% at 2146.30

NYSE Internals: 2173 Advance. 875 Decline.

Minute wave [v] must have started today. This may be the last wave up to complete Primary Wave 2.

A good Fib. extension for this wave is 1096 on the SPX. That should be enough steam to get the Dow back to that 10,000 mark. After that... it's lights out.

That will also be enough to get SPY to it's gap fill from the free fall last year.

Financials and energy were the leaders today. US Dollar was weak, making Crude Oil and Gold rally. It appears to be that Tech and Financials are the only leaders though. If tech is weak, then financials make up for lost ground and vice versa. GS also makes a new 52-week high, which helped the financials big time. VIX continues to get crushed as well, which is helping the SPX rally.

Market Update - 9/21/2009

Dow Jones Industrial Average: -41.34 or 0.42% at 9778.86

S&P 500 Index: -3.64 or 0.34% at 1064.66

NASDAQ Composite Index: +5.18 or 0.24% at 2138.04

NYSE Internals: 1012 Advance. 2014 Decline.

Looks like Minor Wave iv is in progress, but may be ending soon. The action of off today's low was still corrective, and not impulsive, so it doesn't look like Minor Wave v has started yet. Also it was a 2-1 down day, so not impulsive to the down side either.

Most of the day was also sideways, in a very tight narrow range, typical action for a wave 4.

The 1100 area should be tested soon given that wave iv ends soon, but it may take a while since we all know how long and boring wave 4's have been in the past during this rally.

Regardless, I'm sure that the next series of new highs will be the last we may see for a while.

The US Dollar also seems to have completed a perfect corrective wave pattern from its high. It looks like it is starting to rebound, which will be bad for the Equity and Commodity Markets.

US Dollar was strong, Crude Oil got crushed, Gold was flat, VIX was strong early in the day, but faded away at the close. NASDAQ was once again the leader, despite APPL and the Semi's being weak. The Financials were a bit weak also... well all except AIG.

Market Update - 9/18/2009

Dow Jones Industrial Average: +36.28 or 0.37% at 9820.20

S&P 500 Index: +2.81 or 0.26% at 1068.30

NASDAQ Composite Index: +6.11 or 0.29% at 2132.86

NYSE Internals: 1760 Advance. 1254 Decline.

Another boring triple-witch expiration. Expected more volume and volatility, but got a boring sideways action day instead. Although the VIX was up 1.14% on the day. Bearish Harami pattern that I posted about yesterday also failed, but it isn't completely out of play yet since we didn't break the highs of yesterday.

Two days in a row now the market has gone sideways. It's either consolidating for a push to 1100, or it's just tired out, and we will get a truncated 5th wave to end the rally.

As for right now, I have an ending diagonal triangle playing out on the SPX and Dow. If that is the case, minute wave 5 has a good possibility of truncating. The key number to break is 1072. If that happens, we may get a run up to 1096.

SPY is also stalling at gap resistance and a crossroads of much pretty significant trendlines, not to mention the pretty visible negative divergence on the daily charts. To go any higher from here will be very difficult, but it's still possible since this market has just pretty much blown through every resistance level possible...

SPX was up and US Dollar was up. Strange. One of them is very wrong. My bet is on the SPX. US Dollar is oversold, SPX is overbought. Dollar also is forming another base, should this hold, we should get a rally in the USD, which would mean a downtrend in the Equity Markets.

Monday should be an interesting day, let's see what the market makers do with all those assigned in-the-money calls.

I will try and post a weekend update if I can.

Market Update - 9/17/2009

Dow Jones Industrial Average: -7.79 or 0.08% at 9783.92

S&P 500 Index: -3.27 or 0.31% at 1065.49

NASDAQ Composite Index: -6.40 or 0.30% at 2126.75

NYSE Internals: 1344 Advance. 1705 Decline.

Made another new high today, but sold off a little bit into the close, but not as impulsive, so I'm marking it as a corrective wave for now. The SPX hit 1074 today. Getting even closer to my target of 1100.

After looking at my 5min chart again, it appears that once again we are coming up in a 5 wave structure, but it doesn't look complete yet. 1096 looks like a good Fib target for now. Who knows, maybe SPY will make it to gap fill at 110.34. Speaking of SPY, it seems to be halting at some major gap resistance.

Today's daily candle stick printed as a Bearish Harami candle stick. We've seen this pattern a few times in a couple of weeks now, but it hasn't worked at all. But nevertheless, it is still a bearish pattern. Should this play out, we need to close below the lows of yesterday, which are 1052.87 on the S&P500 and 9679.19 on the Dow.

VIX is starting to crawl back up. US Dollar is still weak, Financials are still strong, seems like the Financials are filling in for Tech. Oil continues to show a little weakness and Gold almost made a new high today.

Market Update - 9/16/2009

Dow Jones Industrial Average: +108.30 or 1.12% at 9791.71

S&P 500 Index: +16.13 or 1.53% at 1068.76

NASDAQ Composite Index: +30.51 or 1.45% at 2133.15

NYSE Internals: 2547 Advance. 517 Decline.

Important fibonacci date today. It marks the 38.3% time retracement of this beark market thus far. We also made a new high today.

Like I had said earlier, if we break 1050, we have a clear run to 1100. We made it to 1068 today.

Today's intra-day price action was definately a wave 3. Whether it is complete or not, is yet to be seen, but regardless, we will probably see one more high. Maybe 1096-1100.

We are hitting up against gap resistance now, the market should stall for a little bit, then work its way higher. Hopefully we can top before OpEx this Friday.

Market Update - 9/14/2009

Dow Jones Industrial Average: +21.39 or 0.22% at 9626.80

S&P 500 Index: +6.61 or 0.63% at 1049.34

NASDAQ Composite Index: +10.88 or 0.52% at 2091.78

NYSE Internals: 2007 Advance. 965 Decline.

We hit 1049.74 today, almost 1050. After looking at the charts again, I feel that 1100 is very possble.

There is not a lot of resistance after 1050, and given that we break 1050 soon, we have a clear path to 1100+ It also lines up with some key gap filles on SPY at 110.34.

Also the bearish harami candlestick pattern failed. Technology continue to be strong, Financials are starting to lead again, US Dollar is weak, volume is low, and the VIX is dead. This is why 1100 seems more likely now.

Market Update - 9/11/2009

Dow Jones Industrial Average: -22.07 or 0.23% at 9605.41

S&P 500 Index: -1.41 or 0.14% at 1042.73

NASDAQ Composite Index: -3.12 or 0.15% at 2080.90

NYSE Internals: 1689 Advance. 1342 Decline.

SPY finally hit the 105 mark today. High for the day was 105.30. SPX made it to 1048.18. One penny away from the Fib extension where Minor C = .618 x A. This is also close to the 1050 area that was the target for if we ever broke 1039.

More negative divergences again today. RSI still diverging, MACD still diverging... Financials don't make a new high, oil drops, and market down despite weak dollar.

Today's candle stick could also be a potential reversal pattern. It was a Doji, and at the same time it formed a Bearish Harami Pattern. This is not a standalone pattern though, we need some confirmation. I would like to see Monday close below the lows of Thursday, then we would get our confirmation that the reversal pattern is in play. Today was also lower volume than yesterday, which adds to the case this may infact be a Bearish Harami Pattern.

Market Update 9/10/2009

Dow Jones Industrial Average: +80.26 or 0.84% at 9627.48

S&P 500 Index: +10.77 or 1.04% at 1044.14

NASDAQ Composite Index: +23.63 or 1.15% at 2084.02

NYSE Internals: 2312 Advance. 726 Decline.

We broke the 1039 level, and halted right at 1044. It may take a few tries to break 1044, but I think we eventually break it and get above the 1050 area. SPY also almost made it to 105 today.

Volume once again was pathetic.

The negative divergences on all the time frames are getting more ovbious each time the SPX makes a new high. When will the madness stop? Who knows. But if this thing ever decides to reverse... it won't be pretty.

We are also at key trendline crossroads on the daily chart. If we break that, we probably make it to 1100.

Market Update - 9/9/2009

Dow Jones Industrial Average: +49.88 or 0.53% at 9547.22

S&P 500 Index: +7.98 or 0.87% at 1033.37

NASDAQ Composite Index: +22.62 or 1.11% at 2060.39

NYSE Internals: 2191 Advance. 843 Decline.

SPX makes new closing high on another very light volume day.

This market is starting to get weak. It may not look like it on the charts, but internally it is starting to fade. The RSI continues to diverge, volume keeps declining, and the market is looking tired. The moves upward are losing their impulsive feeling.

Tomorrow basically has to be a down day, otherwise we may have a run towards 1050 on the SPX. We almost hit the 100% Fib retracement today.

We sold off in the middle of the day, but the bounce at the end seemed corrective. If that is the case, the weakness should continue into tomorrow.

Market Update - 9/8/2009

Dow Jones Industrial Average: +56.07 or 0.59% at 9497.34

S&P 500 Index: +8.99 or 0.88% at 1025.39

NASDAQ Composite Index: +18.99 or 0.94% at 2037.77

NYSE Internals: 2288 Advance. 749 Decline.

Market rallies higher on the lowest volume day of the year.

The SPX gapped opened above the 1016-1018 resistance zone. It kept finding support at the 61.8% retracement level around 1021. The next main resistance is around 1030-1032.

I'm going to stick with my primary count that we are still in wave ii of Minor wave 1. The reason being that we are rallying on such light volume, and the market internals just don't seem too impulsive to the upside.

Being so close to the 1030 level, I think we may hit it tomorrow(wave 5 of c of ii) then probably head down. Breaking 1030-1032 will probably mean that we get a run back up to the highs of 1039.

This market isn't going to find a direction until we get some volume though. We just can't continue higher on very low volume days. I mean come on, we had more volume the day before Christmas Eve!

Market Update - 9/4/2009

Dow Jones Industrial Average: +96.66 or 1.03% at 9441.27

S&P 500 Index: +13.16 or 1.31 at 1016.40

NASDAQ Composite Index: +35.58 or 1.79% at 2018.78

NYSE Internals: 2448 Advance. 577 Decline.

Market rallies on worst than expected Unemployment numbers. The highest unemployment in 26 or so years. Great news!

The alternate count is now in play. We have what appears to be an ABC correction from the lows. This should complete Minute wave 2. Closing right at resistance on the SPX doesn't help though. Tuesday can go either way.

But if we did complete Minute wave 2 today, Tuesday should be down. If that's the case, we should take out the lows of 992.

The VIX continues to get hammered, which in a way is good. If and when we head down on Tuesday, the VIX should have a nice pop.

Market Update - 9/3/2009

Dow Jones Industrial Average: +63.94 or 0.69% at 9344.61

S&P 500 Index: +8.49 or 0.85% at 1003.24

NASDAQ Composite Index: +16.13 or 0.82% at 1983.20

NYSE Internals: 2330 Advance. 690 Decline.

Another boring sideways day, atleast until the end when the market shot up nearly 60 points on the Dow.

We might have completed a complex wave 4 of Minute 1, which unfolded as an abc-x-abc wave. Which would mean we should be down for a good part of tomorrow. Perhaps hitting the 980 area on the SPX.

The alternate count is that the drop we had this morning back to the 992 area on the SPX was a truncated 5th wave of Minute wave 1. Which means we are starting Minute wave 2 up now. If that is the case, then my targets for Minute Wave 2 is around the 1014-1018 area of resistance on the SPX.

The VIX seems to be just completing wave iv of Minute 1, it has retraced just about 50%. If VIX is going to start wave v up tomorrow, it should end somewhere between 29.25 and 30.

Market Update - 9/2/2009

Dow Jones Industrial Average: -29.93 or 0.32% at 9280.67

S&P 500 Index: -3.29 or 0.33% at 994.75

NASDAQ Composite Index: -1.82 or 0.09% at 1967.07

NYSE Internals: 1164 Advance. 1837 Decline.

I was right about what I said yesterday. Wave [5] of iii was going to end somewhere around 99.50 on SPY today. Well, our low for the day was 99.57. From yesterday's post: "The best way to count the waves from the high is i-ii-[1]-[2]-[3]-[4]. We are probably starting [5] down now. A good place for that to end is right around 99.50 on SPY."

The bounce and sideways action that followed, was a typical wave iv. Sideways choppy action all day. We sold of a little bit into the close, so this must be starting wave v. Targets for that is somewhere in between 98-99, which would put the SP500 around 980-990.

Market Update - 9/1/2009

Dow Jones Industrial Average: -185.68 or 1.96% at 9310.60

S&P 500 Index: -22.58 or 2.21% at 998.04

NASDAQ Composite Index: -40.17 or 2.00% at 1968.89

NYSE Internals: 519 Advance. 2546 Decline.

Today was a key day. If we were to close higher, it would mean the rally still had another wave to go. If we closed below yesterday's low, that would mean the rally was over. Well, we closed below yesterday's low, plus some major support. SPX closed under 1000, NASDAQ under 2000 and Dow barely held onto 9300, but closed well under 9450.

The alternate count I had posted yesterday is now in play. Which means, we might be starting another severe Primary down trend. The Primary Wave 2 rally is now most likely over.

The best way to count the waves from the high is i-ii-[1]-[2]-[3]-[4]. We are probably starting [5] down now. A good place for that to end is right around 99.50 on SPY.

The daily chart has completed a nice looking corrective zigzag, and appears to be rolling over. Looks like the divergences I posted about last week are coming into play.

If this infact is the start of Primary Wave 3 down, the start should look similar to what it was at the beginning of the Bear Market. Sideways to downward for now.