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Sunday, June 24, 2012 6:10:31 PM
The wave trading: WEEKLY ANALYSIS
* Sunday, June 24, 2012
I am with the “holiday mode turned on” therefore from now until July 14th I will not post the technical updates on a regular basis. Then from July 14 until mid August I will turn off the computers in order to rest and clear my head away from the screens, although a laptop always comes with me.
Lets go to the charts.
Reminder of my preferred long-term count:
From the October 2011 lows price is expected to unfold the last Zig Zag (ABC) = wave (Y) up that will establish a major top by completing the wave (X) off the November 2008 low.
The equality extension target for the wave (Y) is at 1678.
In addition, once/if we have the wave (B) in place, we will able to extrapolate the equality extension target for the wave (C) of (Y), which could have an upside potential move of 347.61 points.
Hence, if my scenario is correct, at the April 2 top price has established the wave (A) and now it is involved in carrying out a corrective wave (B) pullback that could also unfold another Zig Zag (ABC) down, but so far there is no certainty regarding the corrective pattern, therefore we cannot rule out a Double ZZ, a Flat or a Triangle.
Without analyzing in full details the EWP, in the weekly time frame, we already know that if price is unfolding a simple ZZ then the trend line off the March 09 low should not be breached in order not to jeopardize this scenario. Therefore the April 2010 peak at 1219.80 has become a major horizontal support.
As I have already mentioned, I am not following the count that calls for an impulsive decline from the April 2 top.
Even if in the daily time frame we have a visible 5-wave decline, the internal structure of the of the pullback does not have the impulsive status, in addition several major indices in the US like: Dow, NDX, KBE, IWM in my opinion have unfolded a corrective patterns. In Europe the DAX is also suggesting that price is involved in a corrective EWP.
Therefore I run away from the “perma bearish” crowd that is calling for a major reversal in progress.
Instead, as it can be seen in the weekly chart below my scenario calls for a 3-wave down leg that is expected to establish an important bottom in the range 1219.80-1206.85 (0.618 retracement of the rally from the October 4 low). This scenario should allow a rally during the last quarter of 2012.
As you can see I have placed a question mark at the high reached last Tuesday because I am doubtful that the countertrend bounce off the June 4 low is over.
Continued...
http://www.thewavetrading.com/2012/06/24/weekly-analysis-0623/
George.
Click on "In reply to", for Authors past commentaries.
* Sunday, June 24, 2012
I am with the “holiday mode turned on” therefore from now until July 14th I will not post the technical updates on a regular basis. Then from July 14 until mid August I will turn off the computers in order to rest and clear my head away from the screens, although a laptop always comes with me.
Lets go to the charts.
Reminder of my preferred long-term count:
From the October 2011 lows price is expected to unfold the last Zig Zag (ABC) = wave (Y) up that will establish a major top by completing the wave (X) off the November 2008 low.
The equality extension target for the wave (Y) is at 1678.
In addition, once/if we have the wave (B) in place, we will able to extrapolate the equality extension target for the wave (C) of (Y), which could have an upside potential move of 347.61 points.
Hence, if my scenario is correct, at the April 2 top price has established the wave (A) and now it is involved in carrying out a corrective wave (B) pullback that could also unfold another Zig Zag (ABC) down, but so far there is no certainty regarding the corrective pattern, therefore we cannot rule out a Double ZZ, a Flat or a Triangle.
Without analyzing in full details the EWP, in the weekly time frame, we already know that if price is unfolding a simple ZZ then the trend line off the March 09 low should not be breached in order not to jeopardize this scenario. Therefore the April 2010 peak at 1219.80 has become a major horizontal support.
As I have already mentioned, I am not following the count that calls for an impulsive decline from the April 2 top.
Even if in the daily time frame we have a visible 5-wave decline, the internal structure of the of the pullback does not have the impulsive status, in addition several major indices in the US like: Dow, NDX, KBE, IWM in my opinion have unfolded a corrective patterns. In Europe the DAX is also suggesting that price is involved in a corrective EWP.
Therefore I run away from the “perma bearish” crowd that is calling for a major reversal in progress.
Instead, as it can be seen in the weekly chart below my scenario calls for a 3-wave down leg that is expected to establish an important bottom in the range 1219.80-1206.85 (0.618 retracement of the rally from the October 4 low). This scenario should allow a rally during the last quarter of 2012.
As you can see I have placed a question mark at the high reached last Tuesday because I am doubtful that the countertrend bounce off the June 4 low is over.
Continued...
http://www.thewavetrading.com/2012/06/24/weekly-analysis-0623/
George.
Click on "In reply to", for Authors past commentaries.
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