• 680 days Will The ECB Continue To Hike Rates?
  • 680 days Forbes: Aramco Remains Largest Company In The Middle East
  • 682 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,081 days Could Crypto Overtake Traditional Investment?
  • 1,086 days Americans Still Quitting Jobs At Record Pace
  • 1,088 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,091 days Is The Dollar Too Strong?
  • 1,092 days Big Tech Disappoints Investors on Earnings Calls
  • 1,092 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,094 days China Is Quietly Trying To Distance Itself From Russia
  • 1,094 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,098 days Crypto Investors Won Big In 2021
  • 1,099 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,099 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,102 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,102 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,105 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,106 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,106 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,108 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

SPX: Follow Up of the Short Term EWP

Today just a brief update.

So far the "working" map is fitting in accordance with my preferred short-term scenario, which calls for a retracement of the June's up leg.

Last Sunday I highlighted 3 possible EWP.

Today I remove the wave (C) off the September 25 lower high option; the other two candidates are equally balanced.

Potential short-term paths from the September 14 high:

1. Zig Zag:

Therefore yesterday, price should have begun the wave (C) down. The wave (C) has an extension target in the range 1413-1386.

2. Triple Zig Zag:

Therefore yesterday price should have begun the third Zig Zag (ABC) down.

Yesterday's reversal at the 0.618 retracement after having completed a Double Zig Zag is strongly suggesting that he bounce off last Wednesday's lod is over, although there is no confirmation yet since the sequence of higher lows is still in place.

Bears today have to round off yesterday's bearish set up with follow through to the down side.

SPX 30-Minute Chart
Larger Image

The consensus is looking for an overall shallow pullback with a target at 1422 - 50 d MA = 1419. Then maybe 2 lower ranges could come into play:

  • 1419 - 1396
  • 1396 - 1371

SPX Daiy Chart
Larger Image

If, as I expect, there is soon a break down below 1430 instead of guessing where price will establish a bottom, we need to see:

  • A completed EWP.
  • Positive divergences.
  • Extreme oversold readings of TRIN / TICK
  • High CPCE reading.
  • Fear ==> VIX closer to its 200 d MA .

Conclusion:

  • The internal structure of the pullback off the September 14 high is strongly suggesting that price is ONLY involved in unfolding a corrective pattern that once is over it will open the door to the resumption of the intermediate up trend.

  • The potential target is located in the range:

    1. 1. 50 d MA - 1396
    2. 2. 1396 - 1371
  • The catalyst for the next "take off" could be the announcement of the Spanish bailout, but earning season is also approaching, hence price may adopt a holding pattern.

  • The immediate time frame is bearish biased since we don't have a completed EWP off the September 14 high.

 

Back to homepage

Leave a comment

Leave a comment