Daily Analysis

By: TheWaveTrading | Fri, Dec 9, 2011
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The potential bullish set up did not materialize. Wednesday's eod rally was only a 3-wave up leg, which failed once again at the 200dsma.

Bears took the advantage from the failure to achieve an impulse up and despite Wednesday's marginal higher high price deeded below 1243, which was the level that I mentioned that if breached could trigger a meaningful pullback.

If the count that I am following is the correct one the correction is not over yet since price will have to unfold a Zig Zag off Wednesday's eod print. Hence Fibonacci retracements should come into play = 1225-1212-1200


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As you already know I am considering 2 EW options:


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This option remains valid as long as the structure of the current move, the assumed wave (C), is impulsive.

The extension (1×1) target for the wave (C) is at 1377

If this count is correct price is now involved in tracing the wave (2), which has to bottom in the range = 1226 -1200

Although the loss of the 50 dsma = 1218 could jeopardize this count.


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This scenario will be strengthened if price loses the 0.618 retracement.

Yesterday's TRIN at 4.97 suggests that we should expect at least a rebound attempt for today.

On the technical front I give priority to the momentum indicators:


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TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

Contact: If you would like to contact the author, you can e-mail him at thewavetrading@gmail.com

The main objective of this project is to share my views on several markets and asset classes.

In the initial stage TWT website will be a free service.

My main focus will be the equity market with SPX being the leader but I will also follow US equity sectors, major European indices, fixed income, currencies and commodities markets.

My analysis is based upon traditional Technical Analysis, Elliot Wave guidelines and investor sentiment.

My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on the long and short side and mainly with leveraged ones (2 x & 3 x).

The advantage of ETF investments is that it allows getting involved in equity indices & sectors, currencies, fixed income, commodities etc.

Therefore the main purpose of TWT will be to establish investment strategies regardless if the market is in an up trend or in a down trend, leveraging the chosen scenario while managing the risk by establishing protective stop losses.

Hence I will always define the risk, I will try to let winners run the wave and I will cut the losses if my strategy is wrong.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/