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Daily Analysis

This is going to be a short post today since I am very busy.

Central Banks news hit the tape and what had begun with a short squeeze it is now evolving into something that should be frightening the "perma bears".

Price has recaptured resistances.

If bulls are able to turn them into support then once again I will put into quarantine the bearish ideas. Well to be honest I have already done it.

We have a major reversal; SPX has achieved too many bullish positives that cannot be underestimated:

  • Overlap = confirmation of a 3-wave down leg off the October peak.
  • Island reversal of SPY and NDX.
  • Recovery above major MA
  • Daily RSI above the 50 line
  • Strong underlying breadth.
  • Etc........

If Bulls fails here with the backing of central bankers then they better waste their time in other occupations.


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Price Action and EWP:

It is now a fact that we have a 3-wave down leg off the October peak then we have to assume that the move off the October 4 low is not over

Then if it is not over, in my opinion we should have 2 options on the table:

  1. Triangle wave (B):


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  1. Zig Zag = ABC:


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Short Term EWP:

I am working with 2 potential patterns:

  1. Zig Zag

If the pattern is a corrective ABC up then it will rule out the larger Zig Zag option mentioned above, strengthening the probability of a triangle.

  1. Impulsive move.

If price traces a fiver up then the larger Zig Zag off the October 4 low will be my primary count.


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For the immediate time frame, yesterday's explosive move in addition of having reached the 1.618 extension target for a potential wave (3) or (C) off last Friday’s lod has generated several extremes:

CPCE is now too low
TICK = 1027
TRIN = 0.22

Therefore a pullback should be in the cards.

I suspect that it will be corrective and depending upon its scope we should be able to have the "winner" option. Keep in mind that in order to have an impulse completed we need 9 waves off last week low.

On the way down atm I highlight 2 numbers = 1127 & 1215 & the trend line.

Bears now have nothing while Bulls are once again aware that Central Bankers are on their side.

 

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