Looks like we are in the middle of 2nd leg down

Folks, after reviewing January's decline to this current decline they look fairly similar on the 60 min chart. I was hoping to make a case for a bounce cuz sentiment wise I would like to get long but doesn't matter what I want. The chart says that we need more oversold RSI like last time before it makes a sustainable bounce. You can see on downtrend line #1 that we took about 34 hours or 5 days to backtest the down trend line before we failed breaking below. Then on the second attempt to clear the down trend line around 1/23 it took only 13 hours for us to blast away from the down trend line. This time we are retesting the down trend line for 20+ hours.

1. The MACD is a mirror image of itself. A lazy W with a reject at the zero line on the right side of the W. MACD is heading down after rejection at zero line. Its been crossing up at -12 to -20 and it is no where near there now.

2. On price a break above the down trend line and back test and failure on the January and we are presently back testing down trend line now.

3. Put/Call and Vix were ramping up as they are now. Note Vix is clearly above its 13 MA as it was previously. The put call looks exactly the same as well.......not sure what to make of that double headed ghost pattern other than a lot of puts are being bought.

4. Sto looks weak just like last time.

5. ADX looks trendless.

6. EMA's are in down trend mode with faster 13 EMA below the slower 34 EMA.

It seems like this is a similar attempt to break the down trend line but it is taking to long. In other words,if we were going to break way upwards, we already would have. The longer it takes to clear this down trend line, the greater odds we fail like last time. If folks begin to doubt the double bottom due to impatience I think the easiest thing to do is hit the sell button.

I guess the tipping factors for me is that the test of the double bottom has not been immediately reversed and that we are not oversold this time.........


http://stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=3&dy=0&i=p75163738138&a=133328695&r=9135.png

Edited by hedgehawk, 15 March 2008 - 02:49 PM.

I meant to add that you can see the failed reversal W formations in previous decline and then now.

Dont see a reversal yet, maybe from the lower trend line........................at 1220 zone. Dont like the way the EMAs are pointing down and how the VIX is ramping up.

http://stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=6&dy=0&i=p11528621275&a=132688997&r=5218.png

Sorry, can't read your chart. Can't you or the administrators do something about the size of it?

maybe this will work



http://stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=3&dy=0&i=p46475087370&a=133328695&r=5940.png

http://stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=6&dy=0&i=p45876905036&a=132688997&r=4244.png

Great charts hedgehawk. Thanks. Thanks for tightening them as well. It's now easier now to see the comparisons, even on a wide screen, without having to scroll across.

ditto, thanks, nice work.