SPX overbought; AAII bullish

This is not favorable for bulls, short term. Gentlemen, start your hedges!

$SPX 30-min Bearish Wolfe wave

On short term basis the SPX is bearish. Stop is the red trendline.

They don't ring a bell at the top, folks...

...we need confirmation next week.

SPY: bear pattern in trouble

Last Friday the 65-min had a textbook head and shoulders pattern with negatiave divergence. A short was entered with Thursday's high as the stop, which was the "head". A less aggressive stop would be the top of the "left shoulder".

We reached the less aggressive stop this morning, but Thursday high also looks in jeopardy. The target of 1155 is miles away. This week will be interesting since a big NFP number comes out Friday and the stock markets are closed that day.

ES_F: Trader Vic or A-B-C ??

Update on the developing pattern. 1127.75 is key level for bounce or breakdown.

Be Careful Bears

I went over some bearish Wolfe waves yesterday on SPX and EEM. Today we are seeing a respect for the longer term trend. My take is still short term bearish, but the indices must break prove themselves by breaking below the trend.

SPX: Bearish Wolfe Wave

Wall of Worry Charts

Now we climb that wall of worry.  The SPX is still below the declining 50 dMA and nobody expects it to make a move past 815 before pulling back.  Was this just short-covering, or will it develop into a real rally?  Shorts are nervous about getting squeezed, longs are nervous about that 815 resistance, cash holders are nervous about missing something.  Game on.

BMC long if it can break through the overhead resistance.  It may have to pull back a bit here, but this charts looks okay if it can break above 30.22

AXP short set up is developing with high volume doji Friday showing the short-covering may be finished.  Look for confirmation Monday with a red hotdog on decent volume, then short the bejesus out of this one.  High end credit cards?  Yeah, right.  These guys are paying customers to pay off their balances... what kind of a business model is that?

TJX is coming off a healthy basing pattern although the breakout is on lousy volume and RSI is now overbought.  Retail should have a little more life in it, but Iwill wait for a pull back to horizontal support before entering a long and keep the sell stop near the trend line.  If this gets above 26.36 it could run.

Sprint (S) long has been strong.  I took 22% gains on Friday with the lower volume, but this baby was strong into the close so it should be interesting to see how it opens Monday.  On any low volume pull back, I'll add to my position.  Above 4.5 the next resistance is 6.5.  Sell-stop is the trend line.

MS long may be one of few survivors in the sector along with GS.  I would be careful entering here, but long term this should do okay.  

Citigroup (C) is still standing despite doing just about everything wrong.  In fact, C had a 78% gain this weak on pretty decent volume.  Sure some was short-covering, but probably some new buyers, too.  Ben Bernanke on 60 minutes said they will not allow any big banks to fail and the leading indicator out of the crisi will be when the big boys start getting private equity.  I'm not buying this smoldering heap of burning tax bailout money, but the chart is interesting.  This could run if it breaks above 2.88, but I'm not holding my breath... I'll just put it on my radar.

In other items, Friday I added to FCX and opened a long position in IBM at 89.50 as discussed last Thursday.  I will add to MS and S on any pullback Monday.