US indices hold support levels

US indices elliott wave update
May 29, 2013
S&P testing support once again!!!
May 31, 2013

Both DOW and S&P managed yesterday to test their short-term support levels and to bounce upwards. Both indices tested their support levels as expected by our analysis. A common characteristic between DOW and S&P during their upward bounces that started May 23rd is the corrective pattern that this upward move has. In S&P the price pattern from 1635 to 1674 is a clear three wave move. The downward move from 1674 is not a clear impulsive wave down, but also is not a clear corrective wave. Dow has the same upward three wave pattern. We believe that upward moves are still corrective and will be met with selling.

S&P as shown in the chart below made a lower high at 1674 with respect to the all time high at 1687. Bulls need to break above the 1674 level for the short-term to change to up. Otherwise the bearish trend will push prices below 1640 and towards 1620-1600 which are our first and most probable targets to end the correction. A lower low from 1635 will confirm that 1600-20 area will be tested.


DOW has a similar price action with lower highs and a pause of the decline just above its support. Breaking below 15220 will be good for and could push prices towards 15000.  We remain bearish biased and we give more chances for a downward continuation of the correction.


As always, thank you for taking the time to catch up on my thinking. Don’t hesitate to contact us or feel free to comment on our post.

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

The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.

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

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.