Monday, May 21, 2012

Opportunities Abound

All the markets I cover are experiencing some corrective reversals after hitting various resistance / support points ( discussed in previous posts).
Notice I say corrective. In most cases it is far from certain that the first initial impulse structure is complete,  whether Wave 1 or A, and hopefully the extent of this retrace will shed light on that, and by implication, the evolving structure of the move.

 SPX Weekly
click to enlarge
Please note the RSI and MACD just committing to the move with plenty of room to go.
SPX hits the .382 retrace and lightly overlaps the bulls hoped for 1st wave high ( my label a).

SPX Daily

 click to enlarge

 If the SPX is in a -3- of 3 count then retraces will be minimal, likely limited to 50% of the preceding subwave, or in this case 1325.
An overlap of the 1343 area would negate that count, and overlapping 1360 suggests potential for a new high. However the long term count shown above on the weekly chart, strongly suggests that no new highs are coming.

USD

Basically the same count as the SPX but up not down obviously, and has the same issues regarding the development of the count.
Daily
 click to enlarge
RSI is overbought , but not diverging.
The thrust up is most likely an impulse wave out of a triangle formation rater than the -c- of  b  wave
within larger correction; that would be characterized by low volumes and chop.
In fact the thrust can be counted as a 1, 2, -1- (maybe) implying a minimal pullback to like 80.80 followed by a rip through the double top. Keeping it simple an initial 1 up could pullback to test the .618 retrace around 79.80 or even the break out line, so how far back it goes will help define the count.
Euro short interest is of some concern but.
Weekly
 On the monthly there is plenty of room to go on the RSI etc.
The 50% retrace of previous structure down is well penetrated and the USD yet to reach the .618 retrace .
There is justification for a long term bottom in place.
See May 8 post
 USD Strength

More on Natty and Crude later but see Thur.s Gasoline post Gasoline -corrective bounce due?
on this theme.





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