Last night I studied a great number of charts, and found that there are several markets which are running at cross-currents. Investors seem a bit confused.
Because of these cross currents, I'm going to keep today's update fairly simple. The bottom line is: This is still a pattern that can go either way. After debating a number of factors, it appears that unless bears can break SPX 1430, the bulls remain in control.
Two short-term alternate counts for SPX are shown below:
The hourly chart of the Dow Jones Industrials (INDU, below) shows my big picture preferred count.
It's still unclear if the current correction is completely over.
An SPX trendline chart, with some key levels noted.
In conclusion, given the corrective appearance of the decline and the key overlap at 1456, it remains difficult to get away from the very strong momentum readings on the daily and hourly charts at the recent SPX swing high of 1474. Again, we would expect to see some type of negative divergence before a meaningful top. So, barring a solid break of SPX 1430, it still appears bulls are in charge. Trade safe.
Reprinted by permission; copyright 2012 Minyanville Media, Inc.
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