Daily Analysis

By: TheWaveTrading | Tue, Jun 19, 2012
Print Email

Since I have extended my weekend holiday I did not have enough time to study/review the markets so today I can only post a brief update.

So far it has been quite easy to "decode" the EWP from the June 4 low.

As a reminder my preferred count off the April 2 top is calling for a counter trend wave (B).

I had initially assigned as a potential target the range 1344 - 1363

Now the problem is to be in full control of a complex EWP since unfortunately price is not unfolding an "easy to read " Zig Zag, maybe it is not even a Zig Zag.

Above, the potential topping spots remain at the gap fill at 1353.39, which in addition is also a weekly gap, then at the 1357-1359 area & the 0.618 retracement.

At the moment we cannot rule out a move above the 0.618 retracement since if price is unfolding a Zig Zag the extension target could carry price towards the 1370 area.

Waves (B) are tough, as "they" can do almost anything: Zig Zag, Double Zig Zag, Triple Zig Zag, Triangle etc.

So far there is no indication that price has completed an ending pattern despite yesterday´s Spinning Top.

The pivot support is at the 10 d MA = 1320

SPX Chart
Larger Image

There are plenty of catalysts that could trigger a trend reversal but I doubt that price will establish a top before next Wednesday's FOMC meeting.

Even though the internal structure should allow more upside we know have several indicators that are now suggesting that SPX is getting overbought.

So I will be monitoring the Stochastic to see when/if a bearish cross is issued and the RSI´s trend line support.

SPX Chart
Larger Image

$NYUD (NYSE Advance-Decline Volume) INDX
Larger Image

$NYMO (NYSE McClellan Oscillator (Ratio Adjustment (EOD)) INDX
Larger Image

In addition to the "still" bullish short-term internal structure the absence of negative divergences are favoring more upside for the assumed wave (B).

Yesterday the most sensational move was achieved by the VIX, which plummeted 13%, breaching a trend line support in force since the March 16 low and closing below the lower BB.

The next support is at a gap fill at 17.56

Since, often, VIX leads the market in bottoming or topping ahead of the equity market we have to monitor it closely.


Larger Image

Sector wise I am monitoring IWM since if a bullish IHS pattern is confirmed by a break out above 77.85, even though price will not acheve the theoretical target I would not rule out a move towards the gap fill at 81.58, in which case SPX could reach the 1400 area.


Larger Image

 


 

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.

Disclaimer: The content of this article is for educational purposes only, the information supplied is not a recommendation to buy or sell any security or financial instrument.

Thewavetrading.com nor the owner can not be held responsible for any loses occurred from the information provided within the website.

The Information supplied cannot be copied or reproduced without the permission from the owner.

Copyright 2011-2014 TheWaveTrading

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/