Technically Speaking: In the Heat of Battle

By: Joseph Russo | Sat, Jul 16, 2011
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July 13, 2011 | 10:30pm ET


In the Heat of Battle

After nearly tagging the upper end of its multi-month trading range seven sessions ago, the S&P has settled the week back down near the middle of its range. Friday closed the week with an inside compression bar, which could set the stage for some fireworks early next week.

The S&P has given back 50% of the rather impressive advance from its mid-June 1258 low. It is now critical that S&P bulls muscle the index back up above the 1356 level. Failure to do so in the next ten sessions or so, will place the index at risk of retesting and possibly breaching the lower end of its range.

Though our proprietary trend signal bias is still bullish, the market remains range bound between 1249 and 1370 over the near to medium term. Victors of this multi-month sideways battle will celebrate upon a 120-point expansion or a 120-point contraction of the current range.

S&P500

Longer-term, bulls will celebrate the spoils of this skirmish round about the 1490 handle, or about 13% north of current levels. Their bearish opponents will collect their bounty down around the 1130 level, which equates to a 14% decline from this weeks close.

So long as both contingents are generally successful at defending their respective range boundaries, the battle will continue. Right now, this particular battle is dead even.


Technically Speaking Video

I trust and hope that you have extracted something of actionable value from this edition of Technically Speaking.

Until next time,

Trade Better/Invest Smarter

 


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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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