Daily Analysis

By: TheWaveTrading | Thu, Dec 15, 2011
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The main idea I am involved with remains the same.

Its "fulcrum" is the structure of the pullback from the October's peak, which is strongly suggesting that the EW pattern off the October 4 low is not completed yet.

I have been proposing 2 potential EW candidates:


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This scenario is getting "weaker" not because of the retracement reached since a wave (2) can, without issuing technical problems, reach the 0.618 retr., rather the issue is that price now has both the 20d & 50d MA above and at the same time daily momentum has been damaged by the RSI below the 50 line & by the MACD bearish signal cross.


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With this week selling pressure, though, we now have the McClellan Oscillator reaching the oversold 60 line.


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A wave (C) could belong to a ZZ, therefore I am suggesting that at least a rebound should be expected very soon.

If price is able to recover above the 50 dsma then this option will be revitalize.


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In the weekly chart below we can see that last week's Spinning Top has been accurate.

In the mean time price has reached an important support range = 1209 - 1204

In order to switch to a bullish weekly hammer price needs to recover the 1230 area by eod tomorrow.


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Regarding NDX it is all about 2 gaps: above 2268.37; below 2211.39

While my idea remains the same:


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The EUR is the one to blame. Here given the complex overlapping structure of the selloff I prefer to rely on my larger "map", which calls for a wave (a) within a large DZZ that began at April 2010 top. I am expecting that in the range 1.2966-1.2870 price should attempt a bottom.


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Contrarian Indicator: Bund

If the count that I am working with is correct price should be on the verge of a reversal:


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To sum up: Despite having established the line in the sand at 1215, honestly I have not given up the ZigZag option but price has to make a bullish statement today.

 


 

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/