Today is the last chance in order to get a deeper retracement, if my short-term
scenario, which I have been discussing for SPX, is going to play out.
It is obvious that the market is in a state of "limbo", with huge expectations,
waiting for Bernanke`s speech next Friday. But, in my opinion the real price
mover will be the ECB meeting next Thursday.
As a reminder my preferred scenario calls for a corrective wave (B) off the
June 4 low that is tracing a Triple Zig Zag.
Since both the last up leg off the August 2 higher low and the current pullback
is corrective I believe that the TZZ is not over yet as it need the last wave
(C) up.
This scenario that I have been discussing for SPX can also be applied in the
case of the DAX. (I use the future contract for this analysis).
In my opinion If price is now unfolding a Zig Zag down in order to establish
the bottom of the assumed wave (B), it should be larger.
Hence the range of the 0.382 - 0.5 retracement should come into play.
In addition even though, lately, bearish set ups have to be taken with a grain
of salt, there is a potential H&S, which, if its target is fulfilled,
price could reach the 50 d - Trend Line off the June lows.
Today is probably the last chance for the bears to attempt to trigger sell
stops below 6885.50 (the neckline of the assumed H&S).
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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