Daily Equity Analysis

By: TheWaveTrading | Wed, Nov 23, 2011
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Fifth loss in a row.
Obviously the market is getting "very" oversold

We know have 2 warnings form the daily MACD crossing the zero line and the weekly Stochastic with a bearish signal cross, although eow confirmation is needed.

Daily Momentum:

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Weekly Momentum:

SPX Momentum
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The bullish set up that I have been following is under stress.
It badly needs a weekly Hammer.
Hence price has to recover 1201, where it stands the 100 wsma by next Friday.

Without the Hammer the weekly time frame will not look good for the bulls.

Below yesterday's lod we are left with the 1170 area as the last support layer above the line in the sand gap at 1155.46 (weekly and daily gap)

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We have a daily Doji but I don't think that a bottom is in place yet.

The " questionable? " bullish scenario calls for a wave (C) in progress.
We have reached the (1x1) extension target and the 0.5 retracement.
It can still be considered a wave (C) but bulls have to show up pretty quickly.

The 1175 area should be strongly defended otherwise additional weakness to 1155 will most likely occur.

Today's price action is critical.

Prospects for a bullish resolution will improve with a recover above the 3 dsma while the confirmation will require an eod print above the 50 dsma = 1208

But for the time being a weekly hammer would be enough.

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In my opinion the bullish set up is still valid as the current down move has traced a 3-wave decline but we badly need to see a reversal, otherwise the wave (C) could morph into a wave (3) and throw out of the window the bullish scenario.

Elliot Wave Pattern:

My primary count remains the same.
It calls for a down thrust out of a Triangle wave (B).

The pattern is not completed yet as it needs the fifth down.

Maybe we could have a Triangle in progress

The missing wave (5) cannot extend more then 38.56 points.

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VIX is still not confirming a bearish scenario.
The line in the sand here is 36.46

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While the EUR is at a critical juncture.
If it does not reverse quickly it will kill the bullish falling wedge.
Puking here will set a deathblow to the bullish set up.

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Author: TheWaveTrading


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