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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…

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SPX: Follow Up of the Short Term EWP


Despite short term technical indicators remain overbought buyers are disrespectful that bulls cannot maintain for much longer winning "passes" (One-handed manoeuvers in bullfighting).

However, neither today we have any indication that the up leg from the April 18 low is over:

  • Yesterday's candlestick remains bullish and besides there is no nearby critical pivot support that could trigger sell stops. (The obvious one is at 1597)

SPX Daily Chart
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  • In addition the internal structure of the advance from the April 18 low das not allow to have any confident count therefore atm it is like tossing a coin or guessing when the EWP will be done.

So far I have been considering two options either a Zig Zag (Red Count) or a Double Zig Zag (Blue count). Since the assumed wave (C) lacks of an impulsive sequence, in my opinion the Double Zig Zag is becoming the front-runner option. If this is the case the pattern still needs probably a shallow pullback wave (B) (With a bottom no lower than the rising trend line in force since the April 18 low) followed by the last wave (Y) up.

SPX 60-Minute Chart
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Maybe the upper trend line of the channel which today stands at 1631 +/- will temporarily deter further advance.

SPX November Low Channel Chart
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Even though the pattern of the current up leg is not clear I remain confident that price is not establishing any major top. I still expect that the next meaningful pullback will be bought, since it will be either a wave (B) or a wave (II) of an Ending Diagonal

As a reminder below I show you again the two potential counts that I am considering viable for the advance from the November lows:

  • Triple Zig Zag:

SPX Daily Triple Zig Zag Chart
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  • Double Zig Zag:

SPX Daily Double Zig Zag Chart
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Tomorrow I will not be able to publish the daily update.


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