Jan 19

Written by:
1/19/2011 3:26 PM 

On Tuesday, the S&P recorded its fourth rally in five days with a gain of 0.1%.  Advancing stocks exceeded losers by almost 5:4.  However, the up/down volume ratio was bearish by almost 2:1 thanks to Citigroup.  Total volume increased 13%.  The daily Coppock Curve has a bullish bias for 18 of the 24 S&P industry groups and 16 of the 30 stocks in the DJIA.

Both the July-August and August-November rallies were corrective structures.  However, the current rally from the late November low has much more of an impulsive look to it.  Since the first two are corrective, the current rally will almost certainly end up being corrective as well.  With that in mind, the most straight-forward count is that a five-wave “A” ended on December 29 and the “C” wave began two days later.  This “C” will be 0.618 of the “A” at 1310, which is within the 1289-1313 first support range mentioned in the recent STR.  Nearby support is at 1262-1254.

S&P 500

Meanwhile, the dollar index traded to as low as 78.64 today.  That represents a breakdown from the 79.06-78.08 support range mentioned in the current STR.  In addition, the daily Coppock fell to a new reaction low.  Thus, the index has recorded both a price and momentum breakdown.