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Daily Analysis

  • Tomorrow we have quarterly OPEX.
  • On Sunday we have Greek elections (major event risk).
  • Next Wednesday is FOMC day (major event risk).

It is not a bad idea, if tomorrow price does not "show" a clear setup, to be patient and wait until next Monday, since price will probably set a "course".

While I maintain an intermediate time frame bearish bias, since in my opinion SPX should unfold a Zig Zag from the April 2 top, we do have Technical & EW reasons to expect a larger rebound from the June 4 low, maybe in the range 1344-1363 which should establish the top of the wave (B). Once the wave (B) is in place I expect a wave (C) down with an initial extension target of 156 points.

Daily momentum indicators are now showing bearish warnings:

  • The RSI has been rejected twice at the 50 line and yesterday it breached the trend line support in force since the June 4 low.
  • Stochastic could on the verge of issuing a sell signal.

SPX
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In the market breadth side, the McClellan Oscillator will not be a concern for the short term bullish scenario as long as it does not breach the zero line and the MA bullish cross is reversed.

NYSE McClellan Oscillator

The short-term price action remains choppy with back and forth swings, but what matters is that the internal structure is corrective, therefore the odds are larger for a bullish resolution.

Price so far is holding above the 10 d MA = 1306.

If this pivot support is breached then price could retest of the 200 d MA.

Clearly what is needed is the confirmation of a higher low.

SPX
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The short-term pattern will depend upon if price holds above last Tuesday's lod of 1306.62

If price does not breach 1306.62 then we could have two Triangle options:

  • Triangle Option 1:

SPX
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  • Triangle Option 2:

SPX
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  • If 1306.62 go then we will have to monitor the internal structure of the pullback and wait to see if the 200 d MA holds or it is breached.

Maybe the EUR is also involved in completing a triangle if price remains above 1.2440.

EURO
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We don't have major extremes in short term breadth/momentum indicators, but CPCE is approaching the upper BB. This is a contrarian indicator.

CBOE Put/Call Ratio

 

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