Add Contracting Volume to Bull Trap Indictment ~ The Risk Averse Alert

Wednesday, October 21, 2009

Add Contracting Volume to Bull Trap Indictment

Zooming in on the possibility of an imminent top...


Add to typical RSI and MACD degradation, wave iv of 5 versus wave ii of 5, (noted yesterday) we see continuation of the trend where peak volume has occurred at the end of third waves in related, 5-wave sequences since March '09 bottom ... extending even to the present unfolding of wave v of 5 of C of (B).

Likewise, volume continues its contraction during successive advances higher off March '09 bottom. This reads the higher she goes, the less they fear. And this disposition remains as ill-advised now as it has been for months.

Volume, too, supports the Elliott Wave count you see assigned to wave v of 5. That's why one more move to a new counter-trend rally high (on lighter volume than last week's peak) could unfold before the floor holding up this technically-indicted bull trap gives out. Right now, the near vicinity of $SPX 1080 is critical support were the above indicated Elliott wave count correctly portending a very important top within hours...

Fast Money
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