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SPX: Follow Up of the Short Term EWP

By: TheWaveTrading | Thursday, January 31, 2013

Just a brief update since tomorrow morning I will not be able to post the daily follow up.

Even though today's down side action is not impulsive (It would not matter since I am expecting a wave B pullback) in my opinion it seems reasonable to consider that today we have the inflection point for the overdue correction. Above all judging from:

SPX Momentum Chart
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VIX Daily Chart
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What is still pending to be confirmed is the Double Bottom of the US 10 yr. Treasury Note (Risk Off gauge).

ZN 60-Minute Chart
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As mentioned above the SPX internal structure of today's move is corrective, therefore it will not be easy to ride this pullback, as you know corrective patterns can easily mutate.

So far we could have a double Zig Zag that should establish the bottom of the wave (A) of a larger Zig Zag down.

If bears are able to maintain even if with a corrective pattern lower highs/lows they will find the first big obstacle at the 10 dma = 1493.

SPX 5-Minute Chart
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Regarding the bigger picture, as you know, my scenario calls for a pullback wave (B) that will probably be a mild one with an initial target in the range 1479 (20 dma) - 1463 (At the moment my guess is that a bottom could be established in the higher range 1479 - 1474.51).

SPX Daily Chart
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I have bought $SPXU at 32, at the moment without a stop loss (I will probably reference the stop loss with SPX).

 

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.

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