Bulls regain control of the market

USD/JPY will it continue higher?
April 8, 2013
Τραπεζική άνοδος στο Χρηματιστήριο Αθηνών και αλλαγή τάσης
April 11, 2013

At the moment where everyone was waiting for the collapse of the markets after the new downward sharp move in the markets, the managed to hold the intermediate support levels. Last Friday most indices opened lower just above their important support levels. Although we were feeling mostly bearish, we closed half of our position that we opened at 1570 and 1560. It was noted that although one can count a 5 wave decline from 1574, the most clear wave formation was a 3 wave pattern. Above 1564 bulls would return stronger. That level was not only the intermediate high but also the level of 61,8% retracement. Critical support at 1538 was tested early but never broken. From that time on, prices started moving upwards without changing direction. The upward channel created from 1538 still is intact.

spx60M

Dow has even managed to make a new high. Bulls are back for good and are not gonna leave without a good fight. In Dow Jones, prices last Friday did not even reached the support area. The 3 wave decline is visible in this chart also. Beware. This doesn’t mean that have escaped the danger of a deep correction. As long as prices stay above support levels and recent lows the trend will continue with swings.

dow60m

We may have favored the short side because of the warnings in the bigger picture, however we did not neglect some opportunities that were found in specific stocks. Subscribers were informed about our bullish view according to our technical analysis in INTEL. We entered this stock early on Monday still trading below 21$ with 20,70 as stop. Now the stock has already moved towards 22$ and we believe a pause here is needed.

intcuo

The double top at 22$ is important resistance. A pull back could be justified but not a break below 20,70. This is the red line for bulls. Another stock that we mentioned here at a post is MICROSOFT. Do you remember our post early March?

MSFTWEEKLY

We remain bullish as prices manage in the weekly level to break resistance. A new upward move might have just started.

A reason to be cautious however is the divergence shown in other indices like Russell 2000. We have followed the IWM etf and we informed members on Friday that 5 waves down were over and a bounce was to be expected.

IWM

IWM has broken the upward sloping channel and in an pattern. The upward move it now makes is much weaker than the other major indices do. If the divirgence spreads to other indices as well, then a downward correction will be expected soon. For trading the markets and market analysis accross a wide variety of asset classes you can become a subscriber now with one week FREE trial!!!

As always, thank you for taking the time to catch up on my thinking.

A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.

The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.

Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.

A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.

The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.

Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.

impulse-wave-rules

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.