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Friday, March 29, 2024

Week-end outlook!!!

Week-end outlook!!!

Courtesy of Michael at EW trends and charts

This is the SPX, and I went through looking for areas of support where a reversal might happen, and I purposely did it without any Elliott wave influence, just to see what traditional Technical analysis would say.

I found heavy areas of support between 1083.75-1085.89 — a series of important lows made over a period of about one month; below that, there is an open gap at around 1070. These are areas where reversal is likely. Gaps are wonderful calling cards, and with the price action heading in their direction, they often get filled before the reversal.

The last major support on the chart is at 1029.38, a low made back on November 2nd.

I then put on a set of Fibonacci fans, where you can combine the price and times of common Fib levels. (See also Fibonacci Fans.)

Summing up my data, there are three areas where I think a reversal might happen (red dash lines). On this 60 minute chart, there are no divergences developing yet on the indicators. We normally see negative divergences before a trend change takes place, they are one of the first warning signals that the price action is showing signs of weakness. 

This is what I have for the Elliott wave count, a series of 1-2’s, with no confirmed signs of a finished 3rd wave. For speculation purposes, I set the count up, as if we have just completed the first (and the smallest degree) 3rd wave (iii) at 1090.18, the low on Friday so I could try and get some idea where the over-all wave (1?) could finish up.

I was amazed after I set the 50% Fib retracement level right in the middle of the smallest degree 3rd wave to see where the 38.2% and 61.8% levels ended up, encasing the whole 3rd wave (iii).

The conclusion, is that ending at 1055.10, would make the perfect size wave, if there where no extended or truncated waves along the way to mess things up. So, considering everything , I am looking for a reversal around 1045-1060, by using the support of the Fib fan, the Fib retracement levels of both charts, and the Elliott wave theory to base it on.

Warning!

We currently have seven completed waves, and that number counts out as a correction, that is, the sell-off as of now can be counted as an a-b-c-x-a-b-c, a double zig-zag, I do not really see that possibility in the cards, but if the price breaks above 1104.94, the 1-2 down count on the chart will be VOIDED, because a 4th wave can not enter the price territory of the corresponding 1st wave, and if that were to happen the count is wrong. FWIW, 1109.94, is currently where I have my stops on my shorts placed.

 

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