Daily Analysis

By: TheWaveTrading | Tue, Jan 24, 2012
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Today I don't have many "fancy" ideas to share, hence I will keep it brief.

I am following the plan from the potential EW pattern that in my opinion has a large probability of being the correct one, accordingly, as long as price does not deny it, I will stick to it.

The scenario implies that price is tracing a Zig Zag off the October 4 low; hence price is now tracing the wave (C).

The projected target for the wave (C) is at 1376

The assumed wave (C) has to unfold an impulsive 5-wave up leg, therefore price is now in the third wave.


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Within the wave (3), since the internal structure is not clear, it is tough to have a confident s/t count. But as mentioned this Sunday, the Mc Clellan Oscillator and the 10 dsma of NYSE adv-dec volume are warning that upside momentum is waning, therefore price should be involved in last stages, but as long as price does not show weakness, despite being overbought the s/t trend remains up.

Yesterday's Spinning Top is another warning.

If still higher, price should stall at the resistance trend line off the 2007 top at 1328.


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2 events may be the cause of a temporary delay:

Once a top is in place the following pullback, should last + - 1 week while price should not overlap below the assumed wave (1) at 1267.06 (SPX).

The DOW is unfolding the same EW pattern but here price has not reached yet the equality target for the wave (3), which stands at 12761


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One of the major "leitmotifs" of the "plan" lays in a counter trend rebound of the EUR. Which atm moment is looking ok.

Here price is approaching horizontal resistance at 1.3077 and the 50 dsma=1.3077

If the next pullback is corrective and does not breach the 10 dsma = 1.2837 then price could be shaping the right shoulder of a bullish IH&S pattern. This bullish pattern would have a target at 1.3536, which would allow price to almost reach the origin of the Ending Diagonal that established a bottom o January 16.

Anyway the area between the 0.382 - 0.5 retracement should be achieved by the assumed wave (B) up.


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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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