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.
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.
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:
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".
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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