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

SPX: Weekly Technical/Elliottwave Analysis

The week ended with a "large" Harami candlestick, which has caused short-term technical damage and casts doubts over a false breakout of the January's high.

In my humble opinion SPX remains vulnerable to more downside with a potential target (Weekly time frame) in the range:

  • 1831 (10wma) - 1816 (20 wma)
  • 1799

But due to the fact that both up legs from the October and February lows are corrective this decline should be treated as a retracement prior to the final upswing that could conclude the entire advance from the 2009 low. (Ending Diagonal idea that I have been discussing in the weekly updates. If this is the correct pattern the current pullback should bottom in the lower range of the assumed target zone: 1816 - 1799).

SPX Weekly Chart
Larger Image

Friday's Inverted Hammer, with the "proviso" that it is unknown the market reaction to Sunday's referendum in Crimea is suggesting that the first down leg of a potential Zig Zag down could be over. If this is the case, provided price recovers above the 20 dma = 1854, I would expect a multi-day rebound with a lower high in the range 1865 (10dma) - 1868 (Usually the equity market should rebound ahead of the FED meeting next Wednesday).

If instead next Monday we have a gap down, probably the next support located at 1834 will not hold and price will most likely enter the Support Zone 1 target box.

SPX Daily Chart
Larger Image

Reasons for a short-term bounce:

  • Oversold 60 min momentum indicators and a small positive divergence of the RSI. The initial stage of an oversold bounce requires a bullish cross of the MACD

SPX 60-Minute Momentum Chart
Larger Image

  • Positive divergence of the NYSE Adv-Dec Line (Last Friday no lower low of this breadth indicator while SPX made a lower low)

NYSE Advance-Decline Line Daily Chart

  • Positive divergence of the NYSE Adv-Dec Volume (Last Friday no lower low of this breadth indicator while SPX made a lower low)

NYSE Advance-Decline Volume Chart

  • Positive Divergence of the McClellan Oscillator (Last Friday no lower low of this breadth indicator while SPX made a lower low). If an oversold bounce is confirmed the McClellan Oscillator should not reclaim the zero line

NYSE McClellan oscillator Daily Chart

  • CPCE since Wednesday is hovering around the upper Bollinger Band (Contrarian Indicator)

CNOE Options Equity Put/Call Ratio Daily

Elliott Wave wise, price with a wedge could be completing with a Double Zig Zag the assumed wave (A) of a larger Zig Zag down. If this is the case, provided bulls reclaim the resistance zone 1851-1854, the assumed wave (B) rebound should top in the range 1865 - 1867.

SPX 30-Minute Wedge Chart
Larger Image

If instead next Monday we have a gap down then maybe we could make the case that price on Friday completed a Triangle wave (X) within a Triple Zig Zag off the March 7 high. The following thrust should unfold a Zig Zag down completing the corrective pattern and likely establishing the end of the correction. The theoretical equality extension target would be located at 1812.

SPX 15-Minute Triangle Chart
Larger Image

If the wedge pans out the following rebound should establish a lower high for the following technical reasons:

  • The McClellan Oscillator is not "extremely" oversold yet

NYSE McClellan Oscillator Daily Chart 2

  • Nor the 10 dma of the NYSE Adv-Dec Volume has reached the oversold zone

NYSE dvance-Deline Volume Index versus SPX Chart

Lastly regarding VIX lets see if the next buy signal is "triggered" with a weekly spike above the 200 wma (It has occurred five times since 2012). Hence going forward VIX should not lose the support located at 15.77.

VIX Weekly Chart
Larger Image

The spike above the 200 wma is doable if the double bottom target is achieved:

VIX Daily Chart
Larger Image

Seasonality is bullish this coming week while the end of March is usually weak.

 

Back to homepage

Leave a comment

Leave a comment