Daily Analysis

By: TheWaveTrading | Wed, May 2, 2012
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Today we have to pay close attention to the EUR since we finally got a potential reversal pattern. Price did not reach the 1.3000 pivot resistance zone but it reversed at the Trend Line resistance, leaving a second consecutive daily doji.

It is too early to know if the corrective up leg off the April 16 low is done or if price is only taking a breather, in other words and if my count is correct, we either have the top of a wave (X) or just a segment of it. The former would mean troubles for the equity bulls while the latter it would be ok and probably consistent with 1- 2 days pullback of SPX.

In my opinion the odds of at least some weakness are large. A mild pullback should not breach the 20 d MA = 1.3160


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In the 30 min chart below I have a potential ending pattern of the overlapping up leg off the April 16 low.


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Price still has to breach the Trend Line support but yesterday's impulsive down leg presage at least a test of the Support 1 = 1.3162

Regarding SPX, yesterday we had a peculiar trading session: bullish during the first half and bearish in the second half. Usually eod weakness does not bode well for the next trading day.

I remain with a bullish bias for the reasons explained in my last 2 posts:

As I mentioned yesterday if the EWP from the October 4 low it is not done it means that price should carry out one more up leg.

This pending wave up has to be impulsive or it has to unfold an ending diagonal.

Given the internal structure of the up leg off the April 23 low it seems that the impulsive option is now less likely, hence I place it on quarentine

Therefore I am now considering two potential EWP:


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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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