Against all the odds the S&P has continued to push on making higher peaks and higher troughs on each swing. The most significant achievement of late was breaching our 7th of April high at 1388.50. This was our last failure high and confirms that this is far more than just a bounce. Establishing ourselves above this point is the all important thing for the Bulls which they appear to have achieved. A break below here is the first warning that things are faltering with our last dip at 1379 the key support now. Charles Dow talked about ripples within waves etc that was developed further to form the basis of the Elliot Wave Theory.
Indicators in Play
1938 was the first real mention of the Wave Principle and was to later developed into the Elliot Wave Theory. We can think of Charles Dow's lower peaks and troughs / higher peaks and troughs as waves. If we compare the market movements to the ocean, small swings would be ripples, bigger swings waves and longer term large movements as swells.
Summary
We will be looking to buy dips to our old friend the Marabuzo line which comes in at 1398. If we get this opportunity we will be keeping a close eye on 1388.50 with a view to reducing exposure and would exit longs on a breach of 1379. Our first upside objective is 1446.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
Free Trading Education - Education for Trading Stocks, Futures, Forex,
Commodities and ETFs
ADVERTISING
Free Trading Education - Education for Trading Stocks, Futures, Forex,
Commodities and ETFs
