Wednesday, September 16, 2009

Morning Post - It's Wedging (Whatever That Means)

Someone get out the defibrillator. The /ESU9 needs life support. On zero volume in the /ESU9 keeps acting like the little train the could as it climbs the wall of worry to higher highs despite very few investors being present.

Daily SPX chart - Poking a tail thru the upper channel line. Trading (once again) near the upper BB. S Sto possibly about to bear cross or at least topping (embed is possible). RSI still moving up, but not with authority.

60m SPX chart - Topped out again with nice divergences all over the place.

The question, is SPX in a 1 of C or 3 of C or a simple channel topping out the rising wedge of the run? If this is 1 of C we're at some good resistance points. If 3 of C then 1050 to 1089 is the target range. Based on the upper BB and trendlines and the height of the indicators this run is ending or will end very soon. Fibs for the pull back (at this time - I'm tired of raising fibs again) 1031, 1024 and 1016 (at the gap).

/ESU9 - Not sure who's buying it up, but based on volume there are no sellers. It has been obvious that when volume spikes it is sellers coming in. They are out there, but getting them to participate is another thing. The top hot pink trendline is the wedge top line. That SHOULD NOT BE BROKEN! I'm not saying it can't be as it only represents a position near the 50% line of the larger channel. The hot pink wedge is worth about 20 points if it is to crack. The light blue trendlines are a possible new channel that IMO shows the market is possibly rolling over. Look at the open interest line on the LT /ESU9 chart. Mind boggling.

Given the 60m indicators topping (again) and the position of the daily indicators I'd have to say that upside is possible but limited. I'll vote for a flat to down day today and go against the manipulators and HAL 9000.

Note - I received a record number of emails yesterday asking about the top of P2 and is it in. IMO it is not in. If you look at the daily /ES chart below, you can see the larger wedge that is what I hope is the final formation of this rise. When the lower light blue channel line breaks, we can talk about P2 being confirmed, but not till then.

/ESU9 - 15m chart

/ESU9 - 60m chart

/ESU9 - Daily chart (Funny but we're all fretting over that little pink blob in the upper right corner.)

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