S&P: short term Elliott wave count and TA.

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April 15, 2013
Silver crash over or making a pause?
April 16, 2013

S&P has once again came close to test the critical area of 1540. After a sharp rise to new all time highs reaching 1597, S&P tests strength once more. Prices however started a downward move from last Friday and reaching a climax yesterday where it fell by more than 20 points in one session. The decline so far is in 3 waves thus corrective. The downward move could very well be a correction to the 1538-1597 rise. This implies another move back up above 1600 as target. As mentioned in a previous post, there is a case where if prices stay above 1538, the pattern the index can follow can be very bullish.

spx60M

The decline as mentioned above is corrective (until now). Bullish scenarios will be valid as long as prices stay above the support area at 1538-40. This move could be part of an extended wave 5.

spxdaily

The extended wave 5 scenario has very bullish targets. However we should respect the support and resistance levels. If support at 1538 is broken, then prices will most probably will have started a bigger degree correction towards 1480-1500. In the weekly chart below, the moving averages have not crossed since 1400. A weekly close this week below 1550 will be a bearish signal for S&P. If this happens, we expect the correction to push prices towards 1480-1500.

spxema

As mentioned many times before, we currently trade at a certain wave structure were a sharp pull back is very possible. The rise from 1343 could have ended at 1597, and we believe closing above 1538 is the most accurate signal that trend remains up. If this is  not the case, then bulls should be ready to cover and why not bet on the downside.For more help trading this index, don’t hesitate to contact us.

As always, thank you for taking the time to read my new post.

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.

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.