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Couple of up trading sessions today it looks weak. Sell with no fear, with the targets 1.6100 – 1.6075. Stop loss for members only
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It should continue to rally 0.9444 – 0.9469 with support 0.9411. Brake of support, and we must see bloodbath to 0.9393 and more.
EURUSD kiss all my targets Don’t you remember what I said in my last update? Click here to read, I said to “EURUSD hurdle is 1.3405 and if cross my hurdle then we look at 1.3547” Now what for now? Today just watch it should continue rally to 1.3560 or 1.3581 What will happen if breaks the support? We will update further information soon.
The monthly unemployment report is likely to be a victim of the US government shutdown
1330: Initial weekly US unemployment claims rose by 1,000 to 308,000 in the week ended on September 21st, versus the 315,000 expected by economists.
1320: Vodafone’s CFO will step down from his role of nine years once the sale of its stake in Verizon Wireless completes. The stake, which is being sold for 80bn pounds, is expected to be sold by March 2014. The FTSE has risen 24 points to 6,461.50.
1242: Overnight the Chicago Mercantile Exchange (CME) hiked its margin requirements for operators in the Dow Jones, SP 500 and Nasdaq E-Mini futures contracts by nine per cent. According to Zerohedge that may be a result of President Obama’s remarks to the effect that Wall Street has not yet recognized the seriousness of the current impasse on Capitol Hill.
1120: A little more colour on Aviva, in remarks to Sharecast Ronni Chopra – Head of Strategy at Trade next – pointed out that in the medium-term the stock might still be a potential take-over target. FTSE 100 up 17 to 6,454.
In my opinion the top of the up leg from the November lows is in place.
We will have the absolute confirmation when price establishes a lower high.
Below I show you the SPX weekly momentum indicators, where we can see that the RSI has breached the trend line support in force since the November 16 low.
The next intermediate buy signal usually should occur when the RSI and the Stochastic retest the 50 line.
I rule out a major reversal, instead I maintain the scenario of a retracement of the advance from the November lows.
As I discussed last Friday the major reasons that suggest that price has not established a major top are:
The up leg from the November lows has unfolded a corrective 7-wave structure ===> A corrective EWP cannot establish a major Top.
The current pullback is also unfolding a corrective pattern, ===> The intermediate trend remains up.
Retails investors are extremely bearish (I have never seen a major top with an extremely low AAII Bull ratio)
Regarding the potential target, at the moment, since we are in the initial stage of a corrective pattern I can only say that price should establish a bottom in the range 1485 – 200 DMA. (which today stands at 1453)
Once a lower high is in place, the next down leg should aim at the 0.382 R = 1500, where probably a large rebound will take place. If bears maintain the sequence of lower high/lows then the following down leg will reach the target box.
Therefore, I reiterate that the above “road map” looks very probable as long as the bounce, which began last Friday, establishes a lower high.
Regarding the long-term count, I maintain the Triple ZigZag wave (X) scenario. As I have discussed in previous weekly updates since the assumed wave (Z), which began at the November 2012 low is not impulsive I am suggesting that it should unfold an Ending Diagonal, if this is the case on April 11 price has completed the wave (I).
The summation Index, which, peaked at the end of January is already oversold (RSI has crossed the 30 line) and on Friday it has breached the 200 dma. It is remarkable that SPX has been able to establish higher highs with such a weak breadth performance.
Going forward since price has just begun a corrective phase, an already oversold Summation Index should prevent a major decline.
Lets move on to the current price action.
It is reasonable to expect that the rebound from last Thursday LOD to reach the target box delimited between the 20 DMA = 1564 and the 0,618 retracements = 1574.
If it tops at the 20 DMA the 1×1 extension target for the following down leg would take us to the 0.382 retracement of the advance from the November lows at 1500.
EW wise price would be unfolding a ZigZag therefore if lower prices were in the cards probably this initial ZigZag would morph into a Double ZigZag
Lastly, VIX on Friday has “issued a Bollinger Band buy equity signal”. Friday’s drop has been larger than I initially thought, moving back below the 200 DMA. I still expect a bottom in the range of the moving averages (10-20-50) or in the worst-case scenario at the rising trend line support in force since the March 14 low. The lower is the retracement, the larger will be the assumed SPX wave (B) rebound.
I still think that the pattern that VIX is unfolding does not suggest a major move to the upside, but as long as the sequence of higher lows/highs is maintained the trend remains up.
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