As you know, when I don't have much to add that can justify a modification of the "ideas" that I have been explaining in the previous posts I prefer to write a short update.
Today is one of those days.
There are no reasons to modify my medium-term and short term preferred scenario.
Regarding the short term one I maintain the "idea" that SPX on May 18 has established the wave (A) within a Double Zig Zag which began on April 2.
Therefore now price is involved in a countertrend bounce wave (B) with an assumed target in the range 1340-1353. Keep an eye on the 20 d ma that today stands at 1352.
Once the wave (B) is in place I expect a wave (C) down that will most like break the 200 d MA on the way towards the target range 1258 - 1220 where I expect price to establish an "important" bottom.
If my short-term scenario plays out then price now has to unfold an upward Zig Zag (ABC). Therefore I am waiting for an impulsive up leg that has to break above Tuesday's hod at 1328.49.
The McClellan Oscillator, despite price for the time being remains trapped in a sideways trading range, is "expressing" a bullish breadth thrust that should bring as a logical consequence higher prices ahead (immediate time frame).
Something that is causing to me a concern is the EUR's EWP, since I would like to have more confidence on the potential path.
I am working with a Double Zig Zag from the May 2011 lower high. This count assumes that on February 29 price has begun the wave (C) of the second Zig Zag.
Since a wave (C) has to be impulsive price should be now involved in a wave (3) down.
Below I have a tentative approach of a speculative triangle wave (IV) of (3) in order to solve the technical issue of having only a 3-wave down leg form the May 1 top.
If this "project" plays out the price will be trapped below 1.2825 and will have to unfold a contractive price structure.
So more price information is needed but as I mentioned yesterday:
"Therefore, even without a confident count price seems it is far from a potential long lasting bottom and this will exercise downside pressure for the equity market. The EUR weakness would be aligned with SPX scenario of a larger correction from the April top."
Next Monday US markets are closed for the Memorial day Holiday.
Enjoy the weekend.
