Daily Analysis

By: TheWaveTrading | Fri, Feb 24, 2012
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In order to avoid the same bla bla bla....... of my daily updates today I consider relevant to follow closely the EUR EWP, since in my opinion, in addition to the evident manipulation of the US equity market, recently it is the major factor behind the puzzling creeping higher of SPX price and the rally of oil and precious metals.

In my opinion the EUR is unfolding a Double ZZ from the January's lows.

If this count is correct price in now completing the wave (A) of (Y) with a potential target in the area of 1.3430

Once the wave (A) is in place a corrective pullback should bring price back probably at the gap fill = 1.3145, in doing so price will be probably shape a bearish Flag which could have as the final peak of the DZZ in the 1.3600 area.

What I want to point out here is that given the positive correlation between EUR & SPX, the wave (B) pullback of the EUR should coincide with the wave (4) pullback of SPX.


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Regarding my "loved" SPX, which btw lately is giving me only headaches, is stubbornly moving inside the bearish rising wedge, which is now in play since the end of January.

Yesterday I mentioned: "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."

And price in the second day of the pullback, after challenging the lower trend line support of the wedge, it reversed to the upside leaving by eod a bullish hammer. It is now unquestionable that SPX will attempt to achieve the eod month picture above the May's high at 1370.58

This is the mission, we now have to see if it will be accomplished as the short term EWP that price is unfolding; in my opinion we are in the final fifth wave of an ending diagonal, can: truncate/double top /marginal higher high.

If THEY are able to levitate price higher into next Wednesday then the trend line resistance will be in the 1380 area.

Today I can raise the obvious sell stop below 1352.


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Also keep in mind that SPX weekly candlestick will most likely be a Spinning Top / Hanging Man. Will the third one be different?


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So as I am scratching my head puzzled with SPX "never ending" bearish wedge, the momentum and breadth indicators that have triggered a sell signal are on the raise.


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Therefore with this "technical picture" price can reverse anytime.

In Europe IBEX has a clear top already in place while the DAX & the EUROXX, if the current bounce establishes a lower high which is most likely , they will enlarge the list indexes that have a reversal in place.

Have a great Weekend.

 


 

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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