• 657 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 659 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,059 days Could Crypto Overtake Traditional Investment?
  • 1,064 days Americans Still Quitting Jobs At Record Pace
  • 1,066 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,069 days Is The Dollar Too Strong?
  • 1,069 days Big Tech Disappoints Investors on Earnings Calls
  • 1,070 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,072 days China Is Quietly Trying To Distance Itself From Russia
  • 1,072 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,076 days Crypto Investors Won Big In 2021
  • 1,076 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,077 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,079 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,080 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,083 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,084 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,084 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,086 days Are NFTs About To Take Over Gaming?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Daily Analysis

Where do we go from here?

It is all about waves (C) in several markets.

In my last weekend update I discussed that Momentum and Breadth indicators are suggesting that price has established "some type" of a top.

In the case of SPX the needed confirmation is en eod print below 1358.

I would not dare, at the moment, to talk about targets since it is obvious so far, that Mr. Market seems reluctant to cooperate with the bears.

In addition we have the European equity market that has already undertaken a corrective down leg off a mid-March top and consequently it is attempting to establish "some type" of a bottom. I have mentioned, but I have not analyzed yet, that the Spanish IBEX looks like it is now involved in a bottoming phase.

Also the EUR's EWP is suggesting that even though the pattern is not completed yet, price is involved in corrective wave structure, hence the odds that price will revisit the February peak are large.

Going back to SPX, the short-term wave analysis is not reliable and could be misleading. Therefore I will pay a close attention to the daily readings of the McClellan Oscillator.

Now we are below the zero line and we also a have a bearish cross of MA therefore the odds are larger for further weakness then for a bullish move.

But we still don't have the confirmation that a bearish wave (C) down is in progress since, despite yesterday ES Globex was under serious pressure SPX has not breached yet the pivot support.

So now we also have to deal with a disconnect between SPX which was able to remain above 1358 while ES Globex dipped briefly below the equivalent pivot support establishing a lower low and aborting the Triangle & the Ending Diagonal bullish options.


Larger Image

Regarding the SPX potential EWP, even though I maintain the option of a Triangle, I think that the odds of being the correct pattern are small as long as price does not recover the 20 d MA = 1383.

Yesterday's Doji is suggesting that today price will attempt to extend the rebound.

If the bearish wave (C) will pan out, then we have 2 # to watch: 1340 and 1300, as potential targets.


Larger Image

The EUR should give us clues if the SPX bearish wave (C) is based on a valid reasoning. We have to wait and see if the down leg off the May 1 top has more business to the down side unfolding a Zig Zag.

Yesterday's bullish hammer presage an attempt to extend the rebound. The strength of the bounce will depend if price will fill or close yesterday's large gap down.

In my opinion the internal structure of the current bounce suggests that we are dealing with a counter trend move.


Larger Image

With so many reasonable doubts maybe Gold will help clear up the uncertainties by enlightening the next EUR and Equity move.

It is very simple: It depends if it confirms a Triangle that will open the door to a down thrust. If gold goes down, also with a wave (C), then the EUR should follow it.


Larger Image

It might be just an "anecdote" but if we get the waves (C) down they should be done by May 18 when Facebook is set to kick off an IPO that could reach $ 100 Billion.

To sum up: in my opinion, pending the required confirmation, the most reasonable SPX scenario calls for a wave (C) down. Once/if we get it, we will talk about targets.

 

Back to homepage

Leave a comment

Leave a comment