• 526 days Will The ECB Continue To Hike Rates?
  • 526 days Forbes: Aramco Remains Largest Company In The Middle East
  • 528 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 928 days Could Crypto Overtake Traditional Investment?
  • 933 days Americans Still Quitting Jobs At Record Pace
  • 934 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 938 days Is The Dollar Too Strong?
  • 938 days Big Tech Disappoints Investors on Earnings Calls
  • 939 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 940 days China Is Quietly Trying To Distance Itself From Russia
  • 941 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 945 days Crypto Investors Won Big In 2021
  • 945 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 946 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 948 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 948 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 952 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 953 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 953 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 955 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Daily Analysis

Yesterday Mr Bernanke has made quite clear that he wants a lower USD and a higher equity market.

Since I don't believe in miracles the odds that yesterday's up leg belongs to, in the least bearish scenario, a wave (B) of a Flat EWP are almost nil.

The USD Index will soon test a trend line support, if it is breached the odds that price will drop to test the February lows would be large.

With a lower USD Index we know the Risk Trade will be "switched on". Therefore this scenario would most likely trigger another leg higher of the equity market & commodities.


Larger Image

USD Index weakness should strengthen the option that EUR is unfolding a Double Zig Zag Wave (B) with a projected target at 1.3864

The odds that this scenario is the correct one are increasing. Therefore as long as price does not breach the last higher low at 1.3187 it is now my primary short-term count.


Larger Image

The Alt Count is the Triangle Idea:


Larger Image

Regarding SPX, if even a mild correction has been forbidden than I have to accept to consider that the wave (A) from the October 4 lows is not finished yet.

On Sunday I mentioned:

"Now the question is where the wave (A) will top?

Of course it depends upon when Central Bankers will decide that the market is due for a breather. In the mean time I can say that if price clears the 1406 horizontal resistance the next obvious potential stopping point is located in the 1440 zone. Given the well-known exogenous stimulus, if price also breaks the 1440 area then there is "only thin air" until the upper Trend Line Resistance in the area of 1500."

Below you can see in the monthly chart 3 resistance layers: 1406 - 1440 & 1500 (if price reaches the upper TL Resistance).


Larger Image

SPX 1500 is 5.9% higher from yesterday's eod print.

NDX could reach the next resistance area at 2900, which represents 4.4% raise from current levels.


Larger Image

If the assumed SPX wave (A) has more business to the upside it means that the impulsive up leg off the November 25 low is not finished yet then as I mentioned in the weekend up date: "On the other hand if the EWP is "another bear trap" then even if it could sound " science fiction" price could unfold another impulsive or ending diagonal 5-wave up leg."

Therefore barring an immediate reversal of the EUR, as long as SPX last higher low at 1386.87 is not breached this scenario, in my opinion, should be seriously considered as feasible.


Larger Image

In the technical front:

  • Momentum Indicators: Honestly they don't have a bullish look mainly since the RSI has a huge overhead resistance at the Trend Line that has marked a negative divergence since February.


Larger Image

  • McClellan Oscillator has barely recovered above the zero line but a bearish cross of MA is still in force.

  • Weekly Summation Index: I have mentioned several times that despite SPX price has been violating logical "gravity lows" which have been suggesting at least a "mild pullback" the Summation Index has entered the oversold zone. Now we have to pay an extremely close attention at this week's eod print since a bullish cross of the weekly stochastic could trigger a multi-week buy signal

Yesterday I also mentioned that:

"Last week's pullback unfortunately is also corrective; you have to be creative in order to come up with an impulsive labelling, and creativity is a dangerous feature in EW analysis. Therefore Bears have to pray that Mr Market has begun a corrective pullback. The trend reversal will have to be corroborated by a lower high in the next few days. Keep also in mind that as we approach month & quarter end the market's bias will most likely be bullish."

Therefore, once again Bears have nothing and without a miracle the trend is still up.

 

Back to homepage

Leave a comment

Leave a comment