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Admin

Yep, SPX Broke Out Of Wedge Higher

All ye of little faith [myself included] there's no denying that SPX broke out higher of its rising wedge; proof positive that bullish wedges *do* exist and the Bulls wn the game and plow over the Bears using them as fuel on the rise. The implication is clear; we are going another leg higher. By the wedge formation, my estimate would be around $1205 however I must note that the 200wk SMA lies above it at $1235 so I would burn that # into my memory as well.
Will it pull back? Possibly, and backtest [or test] that breakout support level. If so - buy the dip is envogue once again so take a jump with a stop below the breakout area. Good luck-

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  • Could Be As Easy As ABC 1/25/10/6am
    It will take some time to see whether or not the advance which began in March is still on.
    Assuming last week's decline to SPX 1090 was wave A of an ABC decline within an overall continuing advance, this week should bring on wave B: a rebound to about 1120. Wave B would then be followed by wave C: a decline to somewhere between 1088 and 1032.
    If wave C goes below 1030, that would suggest the overall advance may be nearing its end. But if it holds above 103, we should soon thereafter see a bullish intraday reversal, setting SPX up for another attempt to reach 1158. If it fails 1158 again, it may signal the start of a lengthy range game, bouncing between 1030 and 1150 for many weeks or months.
    But on the desirable side, if SPX beats 1158 next time, we'd probably get to 1230 pretty quickly from there.
    Above 1230? Even i'm not that optimistic yet. If we just reach 1230, that'd be awesome, but there'd probably be a fairly lengthy period of resistance to getting much above that 61% retracement level.
    • Admin
      Here's what I'm projecting for SPX here. http://pikchur.com/original/pic/l39Rebound to the 50d which is a 50% retracement of this leg down. Then back lower to the 200d to complete Wave C. Beyond that, my crystal ball loses power *lol*
  • I'm luvin' this low volume. It means that the retail investors are not in on this uptrend yet. Once we see a spike in volume, i.e. retail investors have finally started to buy, that may mark a top. Wonder if the volume will remain light as earnings reports come in. My guess is, the volume will remain pretty light, setting the stage for a continued slow-and-steady rally in SPX: slow because forward guidance won't be quite as high as it was last quarter; steady, because the guidance is still higher
  • The 160-month MA is the one to watch right now. SPX held above it at the '03 bottom; but failed to hold it in October '08. Very telling. The 160-month MA is about 1158, just a shout away. IMHO, 1158 is a do-or-die level. Beat it, and we look set to pretty easily reach up to near the next Fib level of about 1228. Break it, and look out below. Earnings, which start coming out Monday, might be the catalyst that determines whether or not we beat 1158. And my take on earnings is that most will beat estimates, but fewer will raise their forward guidance.
    • Admin
      Al, the market must've heard you [or read your post]. You scared it away *lol*
      • Of course, it's not just me. Tons of chartists have their eyes on that obvious 1228 level, and that less obvious 1158 level. And all types have their eyes on earnings. So, after 6 days in a row up, a 1-day drop of less than 1% isn't scary. It WOULD be a concern, however, if people didn't jump in and buy on this dip right away. They've done that on every big red candle in the past few months. So, if they don't do it this time, it would imply some scary times ahead. If they DO buy on this dip, it would imply clear sailing up to 1158. Then 1158 might make for some stubborn resistance like 1125 did. But i doubt that it would take as long to beat 1158 as it took to beat 1125. Anyway, if i get stopped out (at SPY 110) it's been a good 10-month relationship. And we might just break up to make up.
  • 5 straight up days in a row, going into a monday? ill expect another up day to start the week
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