SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Thu, Oct 4, 2012
Print Email

Another brief update

I have already discussed my reasons why I consider the downward price action from the September 14 high incomplete.

Basically I expect at least a Zig Zag = (ABC).

If this scenario is correct then price has to be involved in the late stages of the wave (B).

The irrefutable fact that the current bounce from the September 26 low at 1430.55 is overlapping gives to me a huge confidence that the next directional move is going to be to the down side.

The issue remains to wait for a terminal pattern.

Yesterday I thought we had one but the Leading Diagonal option, judging from today's rise of ES Globex is dead.

On the upside we have three levels to watch for the expected exhaustion:

While the support is at the 10 & 20 d MA = 1448.

SPX Daily Chart
Larger Image

Regarding the short-term price action, since the LD bearish set up has been aborted, and the move from the September 26 lod can only be considered corrective, in my opinion, price should be involved in unfolding a TZZ with an extension target at 1462.

SPX 15-Minute Chart
Larger Image

Obviously, my short-term bearish scenario has to be validated by a reversal of the EUR, which during the week has been lagging behind the equity bounce.

Here the set up would be similar, with a potential Zig Zag down from the September 17 high.

We have to see if price is able or not to recover above 1.3000.

EUR Daily Chart
Larger Image

In the technical front we have mixed short-term signals.

NYSE Advance/Decline Volume

SPX MACD
Larger Image

Lets also monitor the "fear index."

- With the sequence of higher lows we have a trend line support.

- Below it the immediate support is at 14.83

- Above we have the September 26 high at 17.08

- The BB are getting tighter, it is a prelude of a strong move.

VIX Daily Chart
Larger Image

Tomorrow morning I will not be able to post a technical update.

 


 

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/