SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Tue, Oct 2, 2012
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Today just a brief update.

So far the "working" map is fitting in accordance with my preferred short-term scenario, which calls for a retracement of the June's up leg.

Last Sunday I highlighted 3 possible EWP.

Today I remove the wave (C) off the September 25 lower high option; the other two candidates are equally balanced.

Potential short-term paths from the September 14 high:

1. Zig Zag:

Therefore yesterday, price should have begun the wave (C) down. The wave (C) has an extension target in the range 1413-1386.

2. Triple Zig Zag:

Therefore yesterday price should have begun the third Zig Zag (ABC) down.

Yesterday's reversal at the 0.618 retracement after having completed a Double Zig Zag is strongly suggesting that he bounce off last Wednesday's lod is over, although there is no confirmation yet since the sequence of higher lows is still in place.

Bears today have to round off yesterday's bearish set up with follow through to the down side.

SPX 30-Minute Chart
Larger Image

The consensus is looking for an overall shallow pullback with a target at 1422 - 50 d MA = 1419. Then maybe 2 lower ranges could come into play:

SPX Daiy Chart
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If, as I expect, there is soon a break down below 1430 instead of guessing where price will establish a bottom, we need to see:

Conclusion:

 


 

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).

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