Daily Analysis

By: TheWaveTrading | Thu, Jun 14, 2012
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It is not a bad idea, if tomorrow price does not "show" a clear setup, to be patient and wait until next Monday, since price will probably set a "course".

While I maintain an intermediate time frame bearish bias, since in my opinion SPX should unfold a Zig Zag from the April 2 top, we do have Technical & EW reasons to expect a larger rebound from the June 4 low, maybe in the range 1344-1363 which should establish the top of the wave (B). Once the wave (B) is in place I expect a wave (C) down with an initial extension target of 156 points.

Daily momentum indicators are now showing bearish warnings:

SPX
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In the market breadth side, the McClellan Oscillator will not be a concern for the short term bullish scenario as long as it does not breach the zero line and the MA bullish cross is reversed.

NYSE McClellan Oscillator

The short-term price action remains choppy with back and forth swings, but what matters is that the internal structure is corrective, therefore the odds are larger for a bullish resolution.

Price so far is holding above the 10 d MA = 1306.

If this pivot support is breached then price could retest of the 200 d MA.

Clearly what is needed is the confirmation of a higher low.

SPX
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The short-term pattern will depend upon if price holds above last Tuesday's lod of 1306.62

If price does not breach 1306.62 then we could have two Triangle options:

SPX
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SPX
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Maybe the EUR is also involved in completing a triangle if price remains above 1.2440.

EURO
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We don't have major extremes in short term breadth/momentum indicators, but CPCE is approaching the upper BB. This is a contrarian indicator.

CBOE Put/Call Ratio

 


 

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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