Daily Analysis

By: TheWaveTrading | Fri, May 25, 2012
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As you know, when I don't have much to add that can justify a modification of the "ideas" that I have been explaining in the previous posts I prefer to write a short update.

Today is one of those days.

There are no reasons to modify my medium-term and short term preferred scenario.

Regarding the short term one I maintain the "idea" that SPX on May 18 has established the wave (A) within a Double Zig Zag which began on April 2.

Therefore now price is involved in a countertrend bounce wave (B) with an assumed target in the range 1340-1353. Keep an eye on the 20 d ma that today stands at 1352.

Once the wave (B) is in place I expect a wave (C) down that will most like break the 200 d MA on the way towards the target range 1258 - 1220 where I expect price to establish an "important" bottom.

If my short-term scenario plays out then price now has to unfold an upward Zig Zag (ABC). Therefore I am waiting for an impulsive up leg that has to break above Tuesday's hod at 1328.49.

SPX
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The McClellan Oscillator, despite price for the time being remains trapped in a sideways trading range, is "expressing" a bullish breadth thrust that should bring as a logical consequence higher prices ahead (immediate time frame).

McClellan Oscillator

Something that is causing to me a concern is the EUR's EWP, since I would like to have more confidence on the potential path.

I am working with a Double Zig Zag from the May 2011 lower high. This count assumes that on February 29 price has begun the wave (C) of the second Zig Zag.

Since a wave (C) has to be impulsive price should be now involved in a wave (3) down.

Below I have a tentative approach of a speculative triangle wave (IV) of (3) in order to solve the technical issue of having only a 3-wave down leg form the May 1 top.

If this "project" plays out the price will be trapped below 1.2825 and will have to unfold a contractive price structure.

EUR/USD
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So more price information is needed but as I mentioned yesterday:

"Therefore, even without a confident count price seems it is far from a potential long lasting bottom and this will exercise downside pressure for the equity market. The EUR weakness would be aligned with SPX scenario of a larger correction from the April top."

Next Monday US markets are closed for the Memorial day Holiday.

Enjoy the 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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austrian-money-supply/