SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Wed, Jan 30, 2013
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So we finally have FOMC upon us ("Turning window"?)

But do not forget about next Friday's NFP (Another potential "turning window")

Since I don't change my scenario this update is very brief.

I am assuming that from the June 2012 low price has began an Ending Diagonal that will complete the second Zig Zag of the wave (X) establishing a Major Top:

SPX Weekly Ending Diagonal Chart
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I also believe that the assumed wave (III) of the Ending Diagonal "project" is not over.

I am expecting a pullback wave (B) with a target in the range 1474-1451.

Why?

Because in my opinion from the November lows price is unfolding a Double Zig Zag that still needs the last wave (C) up.

SPX Daily Chart
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1. Price is approaching the top of the Assumed wave (A) with a post Triangle thrust. Probably the wave (5) is not in place yet.

The theoretical target is at 1510.85.

If this count is correct, the loss of 1506.39 should increase the selling pressure and begin the OVERDUE pullback

SPX 5-Minute Diagonal Chart
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2. Price from the January 24 higher low has unfolded a Leading Diagonal wave (1), hence if this is the correct count price is now involved in finishing the wave (3). This scenario can play out as long as the following pullback is corrective and does not overlap below 1503.26.

This outcome means that today Ben is going to be as dovish as the bulls desire. Then maybe this impulsive up leg could be over by next Friday's NFP

SPX 5-Minute Chart
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SPX Momentum Chart
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NYSE McClellan Oscillator Chart

(I posted the following charts this morning on StocKtwits/Twitter so they are not updated.)

1. US 10yr Treasury Note:

ZN 60-Minute Chart
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2. Gold:

Gold Daily Chart
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Lastly:

VIX Daily Chart
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It looks like we are going to have an interesting trading day from 2:15 pm (ET).

 


 

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.

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