Daily Analysis

By: TheWaveTrading | Thu, Feb 23, 2012
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Today I post a brief update.

I have discussed in the recent past that there are emerging warnings from technical indicators and more recently from sector divergence, which are suggesting that SPX should be involved in a topping process. If the scenario that I am following is the correct one, then SPX should soon begin a corrective wave (4) pullback.

But the fact of the matter is that since the current pullback has failed to trace an impulsive down leg then we cannot rule out that SPX may attempt another push higher for the end of month picture, keep in mind that yesterday's eod print is only 13,5 points below the May's high.

In the weekly time frame price could be forming another bearish small range weekly candlestick, the third one since the end of January.

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For the short term SPX price is constrained within the rising bearish wedge boundaries. I am raising the reversal # to an eod print below 1353, as price would break the rising trend line support & lose the 10 dsma.

Below I have my unchanged SPX "road map":

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As mentioned above, the lack of impulsive down side action questions that the correction is already in progress but there are a potential bearish patterns in play:

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The EUR has finally confirmed a Triangle break out, which if my count is correct, it should establish the high of a TZZ wave (B), and therefore we should soon see a top.

This scenario is now the key issue that has to pan in order to expect the equity reversal.

A reversal of the EUR will produce a waterfall move to the downs side of "risk assets".

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Author: 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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