SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Wed, Oct 3, 2012
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Technically and EW wise the "song remains the same":

Below in the daily chart once again I show the price info, MA and 2 support trend lines.

SPX Daily Chart
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So far bears have not achieved anything meaningful but as I have been discussed the EWP is strongly suggesting that price has a "pending" move below the QE 3 day = 1430. What will happen once 1430 is breached remains to be seen.

The short-term price action remains bearish biased since the bounce from last Wednesday is clearly an overlapping countertrend move, but as it is always the case with corrective patterns as long as we don't see an impulsive down leg or a break down below 1430, the agony of a larger chop move could endure maybe until next Friday's NFP day.

But today Bears have another opportunity if yesterday's converging move has unfolded a Leading Diagonal. If this is the case we need to see a ZZ up followed by a strong impulsive reversal.

SPX 15-Minute Chart
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We don't have any extreme in short term indicators, but CPCE is getting too low, it could favor the bears.

CBOE Options Equity Put/Call Ratio

Spain and the approaching earning season will be the most likely catalysts for a shallow or a larger pullback.

Something different to monitor:

Euro 600 Banks Index
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Author: TheWaveTrading


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