Evening Update-
S&P 500 chart (SPX) - Daily chart
The daily chart shows that the SPX touched it's uptrend line yesterday at 1253.60. It is currently in a wave 3 to 4 pullback. Resistance above is now at the 1269 and 1290 area. Despite this drop, I am neutral on the SPX. Bulls live above 1246 and Bears live below 1246. A breach of the uptrend line would put the SPX in danger of overlapping, even though we have already technically overlapped. However, there is still enough distance away from overlapping and we are not there yet. The indicators and oscillators are bearish but looking oversold and I suspect the SPX will rally hard tomorrow to the upside. The SPX is lagging the other indexes.
Dow Jones Industrial Average (INDU) - Daily chart
The daily chart of the INDU illustrates that it is in a continuation diamond pattern. As you can see, the INDU hit the uptrend line at 10740 and then rallied sharply higher. I do not believe the INDU will break out until it breaks above the downtrend line and then takes out the previous high at the 11050.00 level. Target remains 1350 and perhaps higher. At the moment the indicators and oscillators are bearish but looking oversold and I suspect the INDU will rally hard tomorrow to the upside. The INDU is the strongest gainer so far for the week. The strength in the INDU is not confirming the lows in the SPX and COMPQ.
The S&P 600 Small Cap Index (SML)- Daily chart
The daily SML chart illustrates that it is in a reverse symmetrical triangle (RST). As always, the general rule of thumb is, that higher highs are bullish even though this pattern itself is treacherous. The RSI on the daily chart is heading lower, the stochastics are turning over, and the williams% indicator is bearish as well. It remains to be seen if this pattern will over shoot the upper trend line and turn into a continuation RST. Do not let this pattern scare you out of the market and prevent you from trading. I believe that the SML is headed higher to put in a double E.
The Volatility Index - Nasdaq (VXN)- Weekly Chart
The weekly chart illustrates that it too is in a reverse symmetrical triangle pattern. The fact that I am seeing so many reverse symmetrical triangles in one form or another on so many charts means to me that there is a lot of out of control behavior going on in the market. Both the COMPQ and SPX took out the lows from 3 weeks ago. However, the VXN did not take out the highs from 3 weeks ago. Therefore, the market top is not in.
Applied Materials, Inc. (AMAT)- Daily chart
The daily chart shows that AMAT is in an expanding megaphone pattern. AMAT has recently completed a wave 3 to 4 pullback within an ABC. It has broken out of its short term down trend line and has had a huge three day rally. This type of pattern illustrates that no one knows what is going on. There is too much whipsaw. The indicators turn bearish at the lows and bullish at the top. AMAT is up 3.08% at $20.10.
The Gold and Silver Index - Philadelphia (XAU) - Daily
The daily chart of the XAU is currently going through an ABC correction. It is also in a wave (3) of (4) correction on the daily. If you look at the RSI and PPO, the highs occur along with price, which is just the same as AMAT. I cannot recommend any trades at this time because the XAU is parabolic up. The uptrend is still quite away off around the 134 level before I could recommend anything. Furthermore, the indicators and oscillators are still rolling over and have not bottomed yet. Sit on hands and do nothing at this time.
