Monday, November 19, 2012

SPX- Last Chance Gas

After a relentless month of selling, the SP has hit the .618 retrace of the Summer rally.
This is where it needs to bounce. Fibonacci resistance at 1405 for a correction.

click to enlarge

Note the "Y" wave has now been retraced Fibonacci .382 on the Weekly chart below.


INDU Weekly
click to enlarge
The Dow has already taken out the .618 retrace of the last little 'c' wave up.
It is now at the .382 retrace of the "Y".  If there is to be another iteration of the corrective structure up up toward 14000 this is where it needs to show up. 
Note the last "W" corrected Fib. .382. 
The RSI negative divergence and of course the long term trend line breakdown suggests its's not going to squeeze out another move to new highs but ... 
if it were get a Z wave , it would equal .618 of the Y wave @ 14,277.

Check out the RSI.
C=A down at 5950

Thursday, November 15, 2012

Natural Gas Elliott Targets

Please take a moment to check out the previous posts beginning with the last one of  Oct.9;
Natural Gas Target Update

"The Y will equal the W at 3.96. The 50% retrace of 6.11 to 1.90 hits at 4.01. 
The 4.00 area is really the hurdle both technically and of course fundamentally, and for that reason is begging to be tested.
So another short term pullback or consolidation that retests the break out should be seen as an opportunity. (that would have been 3.29, it only made 3.33)
Y = 1.382 of W at 4.48 also the .618 retrace of 6.11 to 1.90
 Y  = 1.62 of W at 4.81 "

Since the  April 19 post, Natural Gas Hits Long Term Target, Natty has had a 100% move. 
As can be seen below there is some Fibonacci resistance right here at 3.83, and of course just overhead at the 4.00 area (Y=W @ 3.96, 50% retrace 6.11 to 1.90) .  The entire ABC down from 15.78 is retraced a Fibonacci .146 at 3.92
Also the late autumn seasonal high for Natty over avg 20 years is late Nov.


click to enlarge

Note the slight negative divergence on the RSI.
So ....short / intermediate term caution all the way to neutral. 

Why not go short?
The long term ABC down from 15.78 to 1.90 has not been seriously retraced yet, in either price or time.
Fibonacci .236 retrace of that 6. 3  yr move of 13.88  hits at 5.17, and the 7 mo.s up is negligible.
Additionally the structure up has prob still got another leg to complete following a consolidation under 4.00. 

But after 7 months of a bull stance on the sidelines.

Monday, November 12, 2012

SPX Update

Is this the genuine article, the resumption of the  Grand Super Cycle correction down? Finally?
The high made by the SPX at 1474.50 is mighty close to the measured targets of 1478 and 1487 discussed in the previous post, SPX Elliott Wave Update, Alert, and Targets from Oct.19. And that IS the most important consideration.
Check out the chart from the Oct 19. post;
click to enlarge
The .618 Fibonacci relationship of each successive leg to the preceding leg is obvious and telling. 
During the run up from 1993 to 2000 each successive leg was Fibonacci 1.618 of the preceding leg (thats a bull).

...However... (there's always a few qualifiers)

click to enlarge
The move off the very highs does not really count well as an impulse wave. Yet.
It also left a number of potential continuations of the abc structure up unexplored, as well as not quite tagging the 1478 to 1487 area (not strictly required by any means).
 In any case, remaining open minded about the market's ability to pull out one more upside iteration has certainly payed off over the last couple years.

Meanwhile note the 50% retrace achieved last week and somewhat oversold RSI.

Short term a little bounce certainly could be looked for, with resistance at the 1400 area of course, and above that, the  .618 retrace of the last leg down from 1432, at 1412.
These will be important levels to watch with early resumption of the down move signaling an extension and acceleration in a good ole -3- of 3 scenario.

On the upside, if it can overlap 1432  it will likely try to test the 1487 level. If it does count your lucky stars and run.