• 745 days Will The ECB Continue To Hike Rates?
  • 746 days Forbes: Aramco Remains Largest Company In The Middle East
  • 747 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,147 days Could Crypto Overtake Traditional Investment?
  • 1,152 days Americans Still Quitting Jobs At Record Pace
  • 1,154 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,157 days Is The Dollar Too Strong?
  • 1,157 days Big Tech Disappoints Investors on Earnings Calls
  • 1,158 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,160 days China Is Quietly Trying To Distance Itself From Russia
  • 1,160 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,164 days Crypto Investors Won Big In 2021
  • 1,164 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,165 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,167 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,168 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,171 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,172 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,172 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,174 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…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Daily Analysis

A mixed start with price even unfolding a potential reversal pattern was suddenly reversed with a solid follow-through pushing price above the 1392.76 pivot resistance and achieving a bullish Island Reversal by closing the gap at 1398.08

In addition we now have a potential Double Bottom that could carry price above the April 2 peak.

The picture looks bullish but I cannot desist from considering the EWP from the April 2 peak not completed, since the internal structure of both upward and downward moves has been corrective, then the absence of an impulsive decline makes very doubtful that price has completed a corrective EWP from the April 2 top.

EW wise the Zig Zag = ABC should not be considered over, hence the probability that price has resumed the intermediate up trend is small. Therefore as I mentioned yesterday:

"I maintain the idea that price from the April 2 top will unfold a Zig Zag down. Therefore on April 10 price has established the bottom of the wave (A), now price in involved in tracing a corrective wave (B). Once the wave (B) is in place, price will unfold an impulsive wave (C) down that could match the 65 points drop of the wave (A)."

The unanswered question remains from where the wave (C) will begin, since now the assumed current wave (B) theoretically can retest the April 2 peak.

The critical issue now lies in the extent of a likely pull back that could occur today and the ability of price to hold above the 50 d MA = 1382. Since if the 50 d MA holds then a second up leg off the April 23 low will most likely carry price to retest the April 2 peak.


Larger Image

If the SPX's EWP could eventually allow the resumption of the uptrend with "creative counting" and/or a truncated wave (C), the Dow price structure in my opinion clearly suggests that price is involved in a corrective pattern and not in the beginning of a bullish move.


Larger Image

So allow me to remain skeptical but as I mentioned yesterday the key issue here is how momentum and breadth indicators behave since despite the EWP suggests that price should still be involved in a larger corrective pattern I cannot deny the bullish effects that would result from "buy signals".

Actually the McClellan Oscillator is now the main concern for the validity of my preferred scenario.

The thrust above the zero line if it does not reverse quickly it will most likely trigger a buy signal of the Summation Index increasing the probability of rising equity prices.

In the mean time the VIX inverted H&S pattern is most likely dead while the EUR EWP remains shaky and I maintain my bearish scenario, if price does not break above the Trend Line resistance, of a pending Zig Zag down.


Larger Image

Have a great weekend everyone.

 

Back to homepage

Leave a comment

Leave a comment