DOW and S&P Elliott wave counts

DAX short term Elliott wave count
March 7, 2013
SPX Elliott wave count update
March 10, 2013

The combination of the new all time highs in DOW and the ability of S&P to hold its intermediate term support at 1470-80 has re-energised markets and is pushing prices higher. Yes S&P is in a new upward wave that could reach 1590, Dow has started a new upward wave too, but be careful as this is the final upward 5th wave if we look markets from a broader time perspective. First lets talk about the upward potential and what support levels should hold.

S&P is making an extended 5th wave up towards 1560-90 area. As shown in the charts below, S&P has quite some room to the upwards to move in the next sessions.

spxdaily

As long as prices trade above 1540-38 area, then a push towards 1560 is expected. At that level we would expect a small corrective period to push prices lower and then give a final push higher. spx10DOW as shown below in the daily chart has a similar upward pattern with S&P. Things are the same here. Upward momentum is dominant as long as prices remain above 13900. The entire up trend is safe as long as prices remain inside the blue upward channel.

dow

Although the patterns and recent price movements point higher, we must be cautious as this upward move is the last part of the entire rise from November lows. Prices are expected to retrace at least 38% of this entire rise once the final wave up is complete. Investors are advised to raise their trailing stops as this bull market cannot continue forever.  Concluding we are cautiously bullish respecting the support levels. If support levels break, we cover/close our positions. No second thoughts of buying the dip. Until that day comes, we remain bullish with 1560 and higher as first target.

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

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.