• 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?
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Daily Analysis

The odds that SPX is forming a bearish weekly candlestick are large; so far we have a Spinning Top.

Today's unknown traders reaction to NFP release adds a lot of uncertainty regarding the short-term outcome of the EWP in progress.

But we "know" that:

  • Since the internal structure of the rebound off the June 4 low is corrective, we are dealing with a counter trend bounce.
  • In addition given the overall pattern unfolded off the April 2 top it is reasonable to expect at least one more down leg that should have as a target the range 1248 - 1207.
  • And if my long-term road map is correct the pending wave (C) down can establish an important bottom.

In the weekly chart below I highlight the potential path:

SPX Weekly Chart
Larger Image

I am quite confident regarding this intermediate time frame outcome.

Regarding the short-term price action my confidence on the exact location of price within the corrective EWP in progress is smaller.

I believe that price is unfolding a Double Zig Zag but until we see the internal structure of the next pullback there is no way that we can have assurance that price is completing the wave (A) of the second Zig Zag or the wave (C) which would imply that the bounce is over.

What I can say is that if the pullback is corrective and it does not breach the 50 d MA = 1340 SPX then price will most likely undertake the last wave (C) up with a target in the range 1389 - 1406 (SPX).

In the case of NDX, the idea that price should unfold an upward Zig Zag off the June 28 higher low looks ok, if in the next pullback, price does not breach the 0.618 retracement.

NDX Daily Chart
Larger Image

While for the DOW (and SPX as well) the internal structure is open to both interpretations:

DOW
Larger Image

In addition to the information that will be given by the price in the next pullback (which I expect as early as today), market breadth and momentum indicators should give valuable information regarding the longevity of the current rebound.

  • Watch the RSI trend line support and the 50 line.

RSI
Larger Image

  • Watch the McClellan trend line support and if the MA bullish cross is reversed.

NYSE McClellan Oscillator

  • Also I am anxious to see if the VIX wedge projects plays out in which case SPX should establish with a higher high the top of the rebound.

VIX Wedge
Larger Image

This weekend I am out with family and friends so I will not post the technical update next Sunday.

Have a great weekend everyone.

 

Back to homepage

Leave a comment

Leave a comment