Today only a short and brief update, it is holiday in Madrid so I will try
to spend most of the day with my children.
Yesterday we had a gap down and go.
The 1340 SPX key pivot support level was breached. The Dow erased the positive
divergence that was sustaining the "live on hopes" scenario of an immediate
bullish resolution of the corrective pattern.
It is now a fact that SPX despite it is unfolding a corrective EWP now it
has only "thin air" until a potential target box located in the range 1300-1285
where I expect price to establish an important bottom.
The overall picture in my opinion remains bearish. As I mentioned in my last
weekend update my preferred scenario calls for a wave (B) pullback.
Sine we are dealing with a corrective EWP we have to be open minded, but so
far, from the April 2 top price is unfolding a Zig Zag down (ABC correction)
with the wave (C) in force since the May 1 peak. As a reminder the wave (C)
has to unfold an impulsive 5-wave structure (or an ending diagonal).
For the immediate time frame, in my opinion, price has two options:
Embark in a "crash mode" with a "killer" wave (III) of (3) down.
Undertake a recovery attempt with a wave (2) relief bounce that may reach
the 1366 -1375 resistance area.
In my opinion the option of a relief rebound (countertrend move) is more likely
since SPX is now oversold, we have yesterday's eod print below the lower BB
and we have oversold readings of:
Short term momentum indicators like the RSI (5) is oversold
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.
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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.
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and I will cut the losses if my strategy is wrong.
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