"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 25 mins Economic Pressures Weigh On Banks And Borrowers
  • 2 hours U.S. Political Uncertainty Keeps Stock Markets On Edge
  • 17 hours Gold: The Religion Of Currency
  • 2 days Economists Polarized On Trump’s Tariff Plan
  • 3 days Why Are Investors Overlooking Gold Stocks?
  • 3 days The App That Democratized Trading Is Now Worth $5B
  • 3 days Super-Cycles: Why Gold Is Set For A Breakout
  • 3 days U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 3 days Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 3 days How Low Can Bitcoin Go?
  • 3 days Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 3 days Is Barrick Gold Close To Finding A Bottom?
  • 4 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 4 days China: The Land Of The Ultra-Rich
  • 4 days Alibaba Soars On Reports Of China Listing
  • 4 days What Killed Toys ‘R’ Us?
  • 4 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 4 days Bears And Bulls Face Off In Gold Markets
  • 4 days Bitcoin Is Winning Over The Housing Market
  • 4 days Markets Slide Sideways As Trade War Fears Linger
Economists Polarized On Trump’s Tariff Plan

Economists Polarized On Trump’s Tariff Plan

Economists are polarized on Trump’s…



My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on…

More Info

SPX: Follow Up of the Short Term EWP

Unfortunately SPX`s Ending Diagonal that I have been monitoring for more than two weeks has been busted.

However given the technical reasons discussed in my last Weekly Technical Update I maintain the assessment that price is involved in a topping process that will establish the end of the corrective up leg off the November lows.

At the beginning of February I changed my approach. Due to the lack of clarity given the overlapping internal structure of the up leg from the December 31 low I gave up attempting to decode the pattern with useless counts, instead I focused my attention to locate either an impulsive up leg or an Ending Diagonal, since an EWP always ends by forming either a 5-wave up leg or an ED.

I remain very doubtful that price is unfolding an impulsive move hence if SPX will eventually conclude the up leg from the November 16 low it should form an Ending Diagonal.

The SPX 60 min chart below, which I posted yesterday on StockTwits/Twitter after the close, depicts this EW outcome.

SPX 60-Minute Chart
Larger Image

Additionally, as it can be seen in the daily chart below, since the end of January (Until price does not break above the upper converging trend line) price is tracing a rising wedge with a bunch of overlapping waves.

SPX Daily Chart
Larger Image

Conclusion for the short-term time frame:

  • There is no ending pattern, therefore I assume that there will be at least one more higher high in the near future.

  • But due to the following reasons for today I expect a pullback:

- White Marubozu = Usually it reflect a short term buying exhaustion.

- EOD print above the upper BB = It reflects an extreme move.

- TICK eod print of 1217 = As well it reflects a short-term buying extreme.

I keep watching TLT and VIX for clues of when Risk ON will be switched to OFF. (Divergences means yellow flags)

At the moment the conclusion is a draw:

  • TLT has maintained the higher low while VIX by establishing a lower low has most likely aborted the Double Bottom pattern suggesting that it will need more time to form a reversal pattern.

  • VIX, as well as SPX it is wedging down with positive divergence of its RSI. Once/if the fear index closes the gap at 13.50 it will most likely confirm a trend reversal.

VIX Daily Chart
Larger Image

Lastly I am monitoring the DAX, which I would be really surprised if the current bounce is more than a wave (B) that should establish a lower high.

DAX Daily Chart
Larger Image

Therefore at the moment I have two options either I leave for a holiday (I cannot do it) or I patently wait for the outcome that in my opinion remains the one with the higher probability.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter