Weekly Technical Analysis

By: TheWaveTrading | Sat, Nov 9, 2013
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MISERABLE BREADTH

Despite Friday's impressive recovery how can I even think to have a bullish stance when the "trio" of swing trading indicators have a bearish cross over?

SPX Momentum Chart
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NYSE Summation Index Daily Chart

NASDAQ Summation Index Weekly Chart

S&P500 Bullish Percent Index Daily Chart

EW wise the good news is that the DOW is now probably aligned with the same Ending Diagonal pattern that I have been suggesting for SPX.

In addition here we also know the price level that will invalidate the pattern. Since the wave (III) cannot be larger than the wave (I), even if the wave (III) is not in place yet, it cannot exceed 15826.59.

Recall that if my preferred long-term count is correct the Ending Diagonal, if it pans out, it will conclude the Double Zig Zag from the March 2009 low opening the door to a multi-year retracement. (If the 200 dma does not hold)

DOW Ending Diagonal Daily Chart
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In the case of SPX keep in mind that if the ED is the correct pattern the following wave (IV) will have to bottom below 1709.67.

SPX Ending Diagonal Daily Chart
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I would not rule out that XLF is also forming an Ending Diagonal. In addition despite Friday's huge rally I tend to believe that the wave (III) is already in place, hence the current rebound is a wave (B) that will establish a lower high.

XLF Ending Diagonal Daily Chart
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SPX short-term EWP

Due to the corrective internal structure of the decline off last Thursday's hod I rule out that price can establish a new ATH.

I am considering two potential patterns:

SPX 60-Minute Double Zig Zag Chart
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SPX 60-Minute Triangle Chart
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I maintain the following ETF:

 


 

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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