• 349 days Will The ECB Continue To Hike Rates?
  • 349 days Forbes: Aramco Remains Largest Company In The Middle East
  • 351 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 751 days Could Crypto Overtake Traditional Investment?
  • 755 days Americans Still Quitting Jobs At Record Pace
  • 757 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 760 days Is The Dollar Too Strong?
  • 761 days Big Tech Disappoints Investors on Earnings Calls
  • 762 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 763 days China Is Quietly Trying To Distance Itself From Russia
  • 764 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 767 days Crypto Investors Won Big In 2021
  • 768 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 769 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 771 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 771 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 774 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 775 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 775 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 777 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Daily Analysis

In an extended move it is often the case that price does not unfold the perfect last wave of an ending pattern. This is what most likely happened yesterday with the Dow failing to complete with a higher high the potential Ending Diagonal while SPX achieved the higher high with an unclean fifth.

The fact of the matter is that we have another potential topping action, and this one feels different from the other 2 failed attempts to complete the up leg off the December 19 low.

Probably the best example of the potential reversal can be seen in the AAPL chart below where the stock gapped up (exhaustion gap), traded to new highs and reversed strongly to the down side leaving a very bearish shooting star with huge volume.

AAPL
Larger Image

Momentum indicators are now undoubtedly flashing a sell signal:

  • RSI: Negative Divergence and breaching the T L 1 support
  • Stochastic: Bearish cross.
  • MACD: Bearish cross

Regarding SPX yesterday's bearish action has not inflicted yet any damage on the daily time frame, as price is struggling not lose the lower tl support of a likely bearish rising wedge.

SPX
Larger Image

Therefore as I always reiterate: when price is involved in a reversal pattern it has to establish a lower low & a lower high. In the case of SPX we just had an intraday lower low of only 3 ticks, but this "failed" attempt can quickly change today if/with a gap down and go.

The level that should likely trigger sell stops is at 1337.35

Therefore even though SPX does not have the "official" kick off the overdue correction, I am giving a much larger probability that the correction has been "activated".

Recall that may preferred scenario calls for a top of the wave (3) of (C), within the Zig Zag that price is unfolding from the October 4 low.

Then the wave (4) pullback could last a couple of weeks at least if it unfolds a Flat or a Triangle (EW alternation guideline)

The obvious target is located in the 1300 area. If price closes the gap at 1289 I will reassess this scenario.

Regarding the EUR with 5 consecutive down days it is getting oversold but the short term outlook can deteriorate considerably with and eod print below the horizontal support at 1.3020 - 50 dsma

With only a 3 -wave rebound we have to be aware that it can be fully retraced. Keep in mind that SPX could drop +- 5%.

EUR/USD
Larger Image

 

Back to homepage

Leave a comment

Leave a comment