Following the guidelines and the potential scenario discussed in the weekend
post I maintain a bullish "near term" stance.
Among the 3 potential EW patterns that, in my opinion price could be tracing
from the October 4 low, I am giving a higher probability to the Ending Diagonal
option.
Price, so far, has traced a 3 -wave up leg from the November 25 low; recall
that if this is the assumed wave (III) of the ED it has to unfold a corrective
pattern.
Time wise the ending pattern could be done by the end of January.
The lack of a clear s/t reversal pattern in addition to the fact that price
is still far from the projected max. equality extension target at 1310.44
could allow more upside, maybe unfolding a Triple Zig Zag.
If today, a small pullback is in the cards, I don't expect the gap at 1257.60
to be closed.
On the upside this wave (III) should not extend above 1310.44
The EUR attempt to establish a s/t bottom, if it achieved, it is another positive
for my preferred equity scenario.
Regarding the larger time frame scenario, I am assuming that given the ovearll
price structure + overbought readings + potential negative divergences + Sentiment
+ VIX falling wedge + etc. etc.. price is in the process of establishing an "important
Top".
I mentioned that I am closely following NDX and KBE since both are tracing
an impulsive wave structure from their December 19 lows, which is easier to
track in order to be ready for the Top.
Today I add to the radar screen XLE, the Energy etf since in my opinion there
is a potential Triangle break out.
The projected target for the wave (C) is: 76.50 - 83.79
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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