Another strong day in the equity markets has caused our Elliott work to step off track. The move up from Monday’s PRP low has now created a situation where the trend in the PRP’s (higher lows and higher highs) continues; and the end of our wave is deferred. The “I was wrong” point (stop loss if you will) of 832.98 has been breached and the immediate bear case proven wrong.
Technical Analysis of the financial markets using Elliott Wave, Gann, Fibonacci, cycles and momentum indicators. Posted information is for educational purposes only and not a recommendation to buy or sell any stock. This site is dedicated to the study of technical analysis.
Friday, 3 April 2009
Bulls Showing Strength
Thursday, 2 April 2009
Retest!
The move up from Monday’s PRP low continued yesterday and the “retest” of the 832.98 high is underway. Wednesday’s price action confirms Monday’s low as a price fractal and filled the gap on the chart from 809-813. We will know whether the bearish stance is correct or not very soon.
Wednesday, 1 April 2009
Headed Off at the Gap?
On Tuesday the cash S&P500 formed an “uptrending” price bar on the daily chart. This is where the bar’s high and low is both higher than the high and low of the trading bar preceding it. This type of price action raises the odds that Monday’s low was a Level 1 Price Reaction Point (PRP). If so it would mean that the short-term upward move I spoke of yesterday may well be underway. If so it should run its course over the next couple of trading sessions and as bears we don’t want to see such an up-move exceed the “I was wrong” point (stop loss if you will) of 832.98.
Tuesday, 31 March 2009
Now We Watch the Character of the Decline Over the Next Few Days
The cash S&P500 formed a downtrending price bar on Monday making last Thursday’s high a fractal, CIT (Change-In-Trend) and Level 1 Price Reaction Point (PRP). As such I have high confidence that it marked the end of the Elliott Wave up from the March 6 low. “IF” this wave was the C-wave in an Expanded Flat from the November 2008 low then we are going to make a new low (below 666) by May 7 before we go back above 833. If the current swing down from last Thursday does not complete by tomorrow (April 1) then we can have even more confidence in this scenario.
On the flip side, the next short-term upward move (which will most likely be here and gone by the end of this week) must not make a new high. The “I was wrong” point (stop loss if you will) remains at last Thursday’s high of 832.98.
Monday, 30 March 2009
And the First Level of Support Is ....
“If” a move down has begun from last Thursday’s high then it can’t hurt to look at areas of support. Not surprisingly, the first technical area I have identified (792-796) is just above the last swing low of 791.37 on March 25. This support area is based on Fibonacci and Gann. The short moving average I like to use is projected to be in this area today as well.
Breaking the low of 791.37 is the current point that would mark a trend reversal and make last Thursday’s high a CIT. This would also mean it was the end of the Elliott Wave up from the March 6 low. Under our current roadmap a move below 791 would trigger a bearish stance with initial stops (the "I was wrong" point) at 831.