• 526 days Will The ECB Continue To Hike Rates?
  • 526 days Forbes: Aramco Remains Largest Company In The Middle East
  • 528 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 927 days Could Crypto Overtake Traditional Investment?
  • 932 days Americans Still Quitting Jobs At Record Pace
  • 934 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 937 days Is The Dollar Too Strong?
  • 937 days Big Tech Disappoints Investors on Earnings Calls
  • 938 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 940 days China Is Quietly Trying To Distance Itself From Russia
  • 940 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 944 days Crypto Investors Won Big In 2021
  • 945 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 945 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 948 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 948 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 951 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 952 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 952 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 954 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

SPX: Follow Up of the Short Term EWP

BULLS HAVE THE OPPORTUNITY TO KNOCK DOWN THE BEARS

Today we have the major NFP risk event. It seems that bulls want a below consensus number.

The die is cast but the outcome can change in the blink of an eye depending on the reaction to today's NFP.

The line in the sand has been tested. It seems that bulls are aware of the critical level that must hold in order to avoid an unknown bearish outcome, despite the internal structure of the sell off from the May 22 high is clearly corrective (All things being equal the current pattern is not suggesting a major reversal).

Bulls have a huge opportunity to repair the technical damage and knock the bears against the ropes.

The following arguments favour the resumption of the intermediate uptrend (From the November low).

  • Corrective pattern.

  • Two consecutive dips below the lower Bollinger Band.

  • Apparent successful test of the 50 dma + Trend line support in force since the November low + Horizontal support located at 1597.

  • Extremely oversold reading of the McClellan Oscillator.

  • VIX Bollinger Band buy equity signal.

  • Hammer candlestick.

Lets begin today's update with the McClellan Oscillator.

As we can see in the chart, during the last two years, when the Oscillator bottoms below the oversold line the following move triggers a breadth thrust above the zero line, in addition most of the times it goes from oversold to overbought.

NYSE McClellan Oscillator Chart

My preferred count of the advance from the November 16 low, by the skin of one's teeth, is still valid, but bulls are not out of the woods yet as they must reclaim the 20 dma = 1646 with an impulsive sequence.

SPX Daily From November 16 Chart
Larger Image

Next in the daily chart we can see that yesterday's strong recovery has left in the chart a bullish Hammer, which auspicate a serious attempt to establish a bottom.

SPX Daily Chart
Larger Image

Now bulls have to improve their chances by closing Wednesday's gap down at 1631.38.

If a bottom is in place then the Double Zig Zag option that I have been following can be considered over.

The bottoming process will begin only if we can see a higher low, in addition bulls will have to close the gap at 1631.38 and reclaim the 0.618 retracement with an impulsive up leg.

SPX 30-Minute Triangle Chart
Larger Image

If bulls fail then maybe price is forming a wedge in which case the bullish outcome would be delayed after another lower low.

SPX 30-Minute Wedge Chart
Larger Image

VIX has been rejected at the April 18 high:

The Shooting Star + the Bollinger Band equity buy signal is a serious warning for the bears.

VIX Daily Chart
Larger Image

Have a great weekend.

 

Back to homepage

Leave a comment

Leave a comment