The SP-500 is again getting overextended. I looked for long positions back on October 9th and am now focusing on getting some short positions going. Looking across the daily indicators, the SP-500 remains in bullish territory. I did get a short term trend change to down, but short term signals are rarely reliable.
Let's look at the charts.
The ADX is still trending up, which is bullish. The +DI has entered overbought territory. A negative divergence in the +DI would be a great place to get short. Or I'll be shorting a rollover of the ADX which hasn't been entering the 35-40 range recently to mark highs and lows. We must adapt this indicator and jump the rollovers.
Based on the MACD readings I am adjusting the daily count. The green 3 on the chart will be moved to the right and take the place of the white b. This makes the count an ending diagonal for green wave 3. The green 4 is still in the correct position, and we're now rallying in Green wave 5. The MACD is suggestive of a triangle from June to October. This still doesn't change the count much, but I like having things correct.
The RSI broke the uptrend line already, but at that time I pointed out how is has done this in the past and go on to reach new highs (circled on the chart). It did it again. This time it has broken the new uptrend line. We need to follow this indicator to see if it's going to produce a new uptrend line or not.
The StochRSI is close to breaking its uptrend line, but remains in the "bullish above" territory. Again, we will follow the indicator to see what it has in store.
The Strong FRZ lies at 1770-1820. Expect this area to cap the move up and cause at least a 200 point correction.
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