Daily Analysis

By: TheWaveTrading | Wed, May 23, 2012
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Today I really don't have anything that can be considered of "added value" to what I wrote yesterday in my technical update.

Therefore I maintain the short-term scenario of a potential multi day rebound with a target in the range SPX 1340-1353, well clearly if price does not breach Friday's lod.


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Unstable European political/social/economic environment is increasing the fear and uncertainty.

There is too much instability in the wave structure and the large intra-day swings are suggesting to me that it is a good opportunity to take a rest and remain on the sidelines waiting for a better or safer Risk/Reward opportunity.

As I discussed yesterday in the technical update, the extreme oversold readings and the apparent ability to pause temporarily the downtrend at the critical support in the area of SPX 1292 are encouraging the feasibility of a potential multi-day rebound.

Yesterday's daily SPX Spinning Top is not very encouraging but I maintain the idea I have discussed yesterday regarding the structure of the decline from the May 1 lower high and its implications:

"So far I cannot count it as impulsive, then barring that today price rolls over to the down side I am inclined to assign a larger probability to the Double Zig Zag option, in which case, on Friday price would have established the wave (A) of the second Zig Zag.

If this is the correct count then price is now involved in the infancy stages of a wave (B) rebound that could have as a target the range 1340 - 1353

Then once the wave (B) is completed price will resume the downtrend with a wave (C) down with a potential target in the range 1278 - 1220".

 


 

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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