SPX Jun 1st

June 1, 2012 by Leave a comment

Putting in new lows, SPX is near the completion of a 5 wave impulse. There are two possible projections for the end of this wave 5:

- we are in wave v of 5, targeting modestly lower before starting a macro correction

- we are in wave iii of 5, and the drop could extend a little bit further

Charts:

There is some good probability spot where the drop can stop.

Looking at the macro waves relations,

wave 5 = wave 1 at 1269

127% of wave 4 at 1279

161,8% of wave 4 at 1263

0,618 of wave 1-3 at 1253

So my guess is that 1270-1279 could be mark the temporary bottom.

But look at the relations inside wave 5.

In the first chart, wave v is already extended giving strenght to the hypothesis that a marginal low (1279?) could be enough.

In the second, wave iii is still to be completed so the drop could extend to around 1250.

We’ll see: but right now, i think next week should bring a hard reverse to the upside

Filed under ES

Euro Update

May 30, 2012 by Leave a comment

Following the linked big picture chart i posted during the weekend, this is the detailed chart of recent moves in Euro. Sorry if it is little confusing due to many labelings, but it shows how we are in a wave 3 at various degree (the most powerful subwave in a move). Still beware of javelin’ catching, aside from bounces and short squeezes target is under 1,19

Filed under EuroFx

SPX Update

May 30, 2012 by Leave a comment

Count is now clear, confirming the w4 scenario i was talking in recent posts. This imply that we are going to new lows under 1291 before any significant bounce (but after the impulse completion, the bounce should retrace 50-61,8% of the decline in which will be a macro wave 2). We should be now in wave iii of 5.

Alternatively, wave 5 could truncate but i guess we should see a small completed impulse before; my guess however is that we will see marginal lows in few days before reversing hard.

Chart:

 

Filed under ES

Weekend

May 27, 2012 by Leave a comment

Sorry for the lack of updates but i was away during this week. But there wasn’t so much to add, even today: Eur and SPX are trending down, with the former being in a persistent w3. Is not safe trying to identify the end of a w3, as they are the most powerful waves and can extend beyond projections. So, for today i will propose again this chart, showing that the intermediate term target of the currency is under 1,18. Shorting rallies is still the winning strategy, until then. Even if i try to identify bounces or potential supports, i wouldn’t catch falling knifes.

The same is true for SPX, with ES showing a potential complete ABC and the cash index with weak bounce during the past week. So my speculation is that we are in a small wave 4 triangle (still to be completed) that will lead to new lows before any significn bounce.

Have a nice week

Filed under ES, EuroFx

May 21st update

May 22, 2012 by 7 Comments

Finally, it looks like the bounce has started. Both euro and SPX, deeply oversold, rallied today in a convincing manner. Some uncertainty remain about the near term count, but i’ll try to spot the end of this rally (that should have some leg in the next few days)

Euro

If Friday’s low is the end of wave (3), then this is wave (4) and should stay under 1,30. If this is just wave 1 of (3), then it could go little higher, between 1,3045 (61,8% of wave 1) or until 1,31 to backtest the neckline. Today it should have complete wave A of this correction, so is it possible to see a modest pullback in wave B before grinding higher.

SPX

Here i could see many possibilities.

- the recent low is wave 3: now we are in wave 4 and should stay under 1356 (w1 territory)

- this is wave i of wave 3: the bounce will go until 1368 or little more in wave ii of 3 before crashing

- this is a complete A (insted of 1) – B (insted of 2) – C down, and this bounce will lead to new highs.

I remain with the bearish view, but i see both first and second options as equally likely. I’ll need to see the subwaves of the bounce before committing to a target for the bounce. I think it will clarify in 2 or 3 sessions.

i know i’m neglecting gold and silver recently, given that they were my point of strenght in the first months of this blog. But i’m still doubtful about the near term (both failed to retouch december lows) so i don’t want to commit. However i’ll try to formulate a bearish and a bullish option in the next posts.

Filed under Comments, ES, EuroFx

A textbook setup

May 17, 2012 by 1 Comment

Wandering between various charts, i noticed a textbook example of impulse-retracement. It was Eur-Jpy, showing a five wave advance (impulse) from a low, and a three wave retracement (correction) from the end of the impulse.

Being a daily chart, it offers a very good opportunity. It could be a A-B sequence or, better, a 1-2 with either a wace C or a wave 3 coming. The typical retracement for the two sequences is 61,8% of the impulse, and we are already there. The only limit for wave 2′s is the start of the impulse, but they usually stops between 61,8 and 78,6%. Analyzing the correction, it has a typical zig zag form. A common relationship is that wave C will be equal wave A. This happens around 101,1.

So, from this area surrounding 101-102 it should start an upmove to above 112 and probably a lot more. I never traded EurJpy, but i will try to analyze subdivisions of wave C to spot a good entry. I will update about it soon!

Filed under Uncategorized

Euro Update

May 16, 2012 by Leave a comment

Being bearish for months, in the last couple of days i tried to identify a countertrend bounce subdividing the current impulse down. But i failed to remember a golden rule: in a wave 3, especially at different degrees (this is supposed to be a iii of (3) of 3, never try to identify the end of the move. The initial target i gave for months is 1,255, and under 1,19. So below there is the updated chart i posted some time ago. Stick with the trend for now, if a bounce occur i’ll try to identify its end.

 

Filed under EuroFx

SPX update

May 14, 2012 by Leave a comment

Looks like SPX formed a triangle in the past sessions, before breaking down today. Trinagles are in 4th wave position, so the so-called “thrust” out are terminal moves leading to a reverse. So, this confirm my bounce scenario from here or after another marginal low (but i think it’s a low probability).

If the bounce finally starts, we should see how SPX will react to the squared area. Right now, i prefer a reverse there and a strong acceleration down, but i’ll reassess when it will go there

Same scenario for euro and Crude Oil, even if the latter will confirm the reverse passing 95,7. Before that, it has a good probability of needing another one low before heading strongly up

Filed under ES

Weekend update

May 14, 2012 by Leave a comment

There weren’t great developments in the past two sessions, so despite the new low in Euro, il stick with my previous projections that we are probably going to see a bounce before any substantial drop. The way i counted the impulsive structures down allows for another one low, but nothing has changed so i won’t post new charts being valid the previous.

Obviously, consider that i’m waiting for a countertrend bounce, that could not be deep as textbooks require. So always remember that for now risks are to the downside. I think tomorrow will be telling, so i’ll post charts tomorrow night.

Have a nice week

Filed under Comments

May 9th update

May 9, 2012 by Leave a comment

Euro finally broke down and ES made new lows, as predicted in last few posts. But now both show a complete impulsive structure down that should led to a at least short term bounce.While for the intermediate bullish case 1,33 (euro) and 1.415 (spx) remains key levels, we could identify a target range IF the bounce develops.

Euro: five wave down, it could at least backtest the neckline or slightly above until 61,8% retracement. Boxed area is 1,306-1,315; after that, a strong decline should led to undr 1,26 in few days. Be careful managing this supposed bounce as risks remain to the downside

Same structure for SPX and ES: five clear waves down. In this case, the most likely retracement area is 1378-1389. This time SPX shows the same impulsive structure as ES

The same bounce could develop same way in Crude Oil, that after the strong decline shows a triangle, almost or already completed. Triangles are always 4th (or B) waves, so even there will be another one low, it will be fast and reversed.

I missed the move in metals, but the overall count is still “problematic”. However you could find in old posts (clicking the metals tab) how was the bearish option and where there could be reasonable target if new lows are made.

Filed under ES, EuroFx, Oil

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