Market Update
Another Groundhog day in the Tortoise rally. Gap-up, sell off on volume, prices rise back up on no volume, ramp into the close. Distribution looks like this, which should be worrying to anyone buying at these price points.
The employment numbers are out tomorrow and the Media has been in a frenzy on how great they are going to be. Complicating matters is the fact that the market is closed tomorrow, although the bond market will be open for a while. This clearly led to a number of traders wanting to go into the holiday weekend flat – which caused some volatility.
We also got a new high on the SP500 today which is annoying as I then had to update my hourly counts. Now on my bear counts we are still in Primary 2 up in both of my highest probability estimates. The Highest Probability count also still has us in (a) of [Z] again, the next best alternative is that we’ll finish P2 next week, probably on Magic-Manic-Monday.
In the Bull count I still have us in a wave [iv] which is looking increasingly like sideways action, which means the price may not go down much to accomplish its goals. After the counts I’ll give a quick update on the SP500Feb 5 Support/Resistance line and the Nasdaq Multi year contracting diagonal.
Bear Counts
The Daily
The Highest Probability Hourly
The Best Alternative hourly
The Bull Counts
The Daily
The Hourly
SP500 Feb 5 Support Resistance Line
Last nigh I mentioned that in this particular rally, where the indices cannot go down, there would be continued retests on the trend line. When I woke up this morning I thought that Think or Swim (TOS) was playing an April Fools Day joke on me. In the low volume overnight session the SPX was ready to well above the resistance line and almost at the March 2009 Rally resistance line. Yet Another Exhaustion gap buying frenzy I wondered, with a barely audible sigh. Through the day we managed to breach the support line again and then in the last hour went upto do a backtest on it and ended the day just below the trend line.
Here is the trend line from Feb 5
and a close up of the last several days
Nasdaq Contracting Diagonal Update
For those of you who have not seen the Monthly count on this you should first look at the chart below.
Now look at the past few weeks – You can see that the NASDAQ Composite has been idling around the Trend line.
Indicators
And Finally, some indicators on the SP500 so you can look at some bearish divergencies.


















