SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Fri, Aug 31, 2012
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I suggest disconnecting from all the rumors. We are not betting on the pools.

A major event is upon us and we don't know if Mr. Bernanke will say more than "we are ready to do whatever is needed".

It is just a personal opinion (so its worthless):

I believe that the major event is not today but next Thursday's ECB meeting.

Yesterday price made a "big statement" by breaking to the down side the tight trading range of the last few days that was suggesting a "holding" pattern. In addition the internal structure if the down leg can be considered impulsive.

Therefore odds are now large that my preferred short-term scenario that was calling for a Zig Zag down off the August 21 high should play out.

SPX: Complex Triple Zig Zag
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If price has kicked off the wave (C) down then we know that price will either unfold an impulsive 5 - wave down leg or an ending diagonal.

Likewise we have:

Regardless of what Mr. Bernanke will say or not say today I know where my scenario is wrong as price must remain below the 20 d MA = 1407 and it cannot waste much time in triggering the third leg down.

Below in the 15 min chart I have my best interpretation of the short-term price action.

SPX
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So this is what I believe is the most likely short-term scenario, BUT I have a major concern since the EUR has not made a lower low and it is now threatening to break above the previous high.

EUR
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As a reminder I maintain the idea for SPX that the corrective counter trend move from the June 4 low is not over yet. Therefore once/if the current Zig Zag down is done I expect the launch of the last wave up of the Triple ZZ that will challenge 1426 with a potential target in the 1440 area.

Have a great weekend

 


 

TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

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