Κυριακή, 28 Αυγούστου 2016

Fwd: Weekend Analysis from ElliottWaveTrader

Author: Avi
Janet Yellen May Have Given Us Our Pullback Catalyst
S&P500, 1to5MinChart, 60MinChart

5minSPX
With the downside follow through on Friday, the market may be signaling that the long awaited “correction” has begun.  And, while I never look to the substance of the news to provide me with directional cues, many will likely blame this pullback on the Yellen’s speech this past Friday.
At this point in time, the question with which I am still struggling is if this correction will be a high level pullback, or something much more sinister and deep.  After speaking with our StockWaves analysts, they tell me that many of the individual stocks they have been tracking have swayed them into looking for a much more shallow pullback.  In fact, that pullback can even complete by this coming week.
So, allow me to draw your attention to the 5 minute chart of the SPX I have attached.  As you can see, downside pressure will be maintained early in the upcoming week as long as we remain below Friday’s high at 2188SPX.  Moreover, as long as we remain below 2174SPX, we should be targeting the 2140SPX region.  A break out over 2174, but maintaining below 2188SPX opens the door to a bit larger decline set up, as noted in yellow, which can take us down to the 2110SPX region.  Lastly, a break down below 2134SPX would suggest that 2110SPX is the likely target for this decline segment under most circumstances.
Now, due to the potential for a shallow correction to be seen (based upon many of the thousands of individual stocks our 3 StockWaves analysts track), once we have a completed (c) wave down in place, I will be on the lookout for an impulsive structure developing off that low.  If the market does provide us with a clear impulsive structure, then that would be a strong signal that a shallow correction has completed, and we should prepare to break out over the 2200 region on our way to 2350SPX.  However, if the rally is corrective, then it will keep me looking for the deeper correction outlined in green on my 60 minute chart.
Moreover, Dr. Cari Bourette, of MarketMood.net, who correctly called for the pullback we now find ourselves within, is also taking the perspective that this may be a very shallow pullback.  Her work suggests that the coming week can present us with a bottoming of sorts in the equity market, which will then begin a slow grind higher.
Remember, markets are non-linear, so we have to maintain a non-linear plan to track them.  While there are many indications that the current decline towards 2134 could be all the pullback we get before we rally to the 2350SPX region, anyone with experience in the market understands that this is not a matter of certainty, but of probabilities.  Since late January of 2016, I have been warning of a global melt up, with our longer term projections looking towards the 2537-2610 region for quite some time.  But, for now, we are looking for the next cue as to when the next melt-up phase will begin, and whether the pullback will be shallow or deep.  And, we may not get that answer for another week or two.

1turnchart

LONGTERMSPX

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