S&P 500, Thursday, June 21, 2012

Hi Traders,

Before getting into our usual analysis, let me answer to one of your questions.

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I keep being asked about organising training seminars and webinars about my way to use Elliott Waves in everyday trading (and more). This what I do

TRADING SEMINARS

I organise large trading seminars (2.5 days - 5+5+3 hours) on a quarterly base in

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• a new way to master Elliott Waves and Entry Points.
• a simple system to recognise Reversal Candlesticks and calculate Fibonacci Targets.
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• and Money Management.
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This includes a lot of practical trading on a demo account and, when possible, on a live account.

TRADING WEBINARS

I'm also organising monthly webinars around the same topics. It can be on a one-to-one or on a collective base (up to 5 people).

Anyone interested please contact me at the numbers below.

Cheers. Mario. Organiser.
W: 02 800 34 618
M: 0405 233 578
E: info@fxtutors.com.au
Skype ID: mariodconti

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ANALYSIS: S&P 500 started "The rally of the last leg up".

In the weekly chart below the S&P 500 completed wave 5.4 (out of 5 waves) and just started wave 5.5, which is the very last 5th wave up within the 5th wave of major grade. In few words: it's fifth of the fifth.

The 161.8% target calculated upon the range of wave 5.1 should take the index in the vicinity of 1,420, generating a double top as the last one topped at 1,418.

Only in the remote case of the Federal Reserve implementing a substantial QE3  there would be an extension of the wave 5.5 that would push the index to level 1,643. But this seems to be quite unlikely at this stage.

This is comfirmed by the daily chart below: see waves 5.5.1 and 5.5.2. Wave  5.5.3 in blue was able to breakout the channel and should be able to reach a minimum target of 1,387.

The 4hour chart below confirms this hypothesis: wave 4 touched the magenta channel. it's supposed bounce back and generate a rally to form wave 5. This would actually complete wave 5.5.3 of the daily chart (above)

Finally, see the 1hour chart below with wave 4 performing a 3-X-3 and touching the lower boundary of the channel. Unless a last minute surprise, it's supposed to rally from now on.

Note: the volatility around wave X was caused by Ben Bernanke announcing another round of  "Operation Twist" by $267 billion. The market mistakenly thought that the FED was injecting more liquidity. 

Instead, it will sell that amount of short-term securities to buy longer-term ones to keep long-term borrowing costs down. The program, which was due to expire this month, will now run through the end of the year.

That announcements caused a roller coaster of the market for about 3 hours.

EURUSD, Monday, June 18, 2012

Euro: R.I.P. 2002-2012.


This could be the commemorative epitaph on the Euro tombstone as Greece's  could push the debt-ridden country out of the European single currency, rocking the Euro to its core and sowing turmoil in global financial markets.

But the Euro is a big animal. As of February 2012^[update], with more than €890 billion in circulation, the Euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the US dollar.

Meanwhile, the Technical Analysis seems to confirm that we might be at a reversal point, although anything can happen at this stage.



SITUATION

Check the monthly chart below. If the timing is right, we are completing the 131st month out of 144. This means that the "Euro Saga" might take till the end of July 2013 before coming to a solution. (or an end).

 
The new wave down might be a 5-X-5 (5-3-5 for the Ellott purists). Based on the Fibonacci Expansion calculation, the next target could be 1.1058 usd (100%).

 
Furthermore, if it performs a 5-3-9 it could go as far as 0.96 usd (expansion to 161.8%), considering that the historical low was around 0.8234 in Oct 2000 (Metatrader).

The very last green candlestick retraced exactly 38.2% of the long red one which could be a sign of weakness.

NOTE: this is dangerous stage as it's too early to ascertain the type of Elliott wave is unfolding. It could be a wave X up, signalling the start of a new downtrend or a wave 1 up which starts a new uptrend.

So please check carefully your entry point as there could be some creazy volatility.

The weekly chart below is the most interesting. It shows 2 Flag formations with a Gann Throw Over (see triangles) which are usually followed by panic downtrends.

 

Note that wave 5 retraced only 38.2% of the last downtrend and this is a sign of weakness. This level also coincides with an historical low which is acting now as a resistance.

 

The magenta channel was touched 5 times and it's now expected to breakout.

The top of the last wave X also coincide with the historical Supp/Res and the 38.2% retracement of the last downtrend.

 

The daily chart below which shows the completion of 3 waves down and 3 up (wave 1-2-X). The latter stopped right on the resistance level. This should be followed by some 5 or 9 waves down.

Further confirmations come from the 4hour chart below that shows a bearish Shooting Start a the end of the last wave up.

 

The 1hour chart below shows the completion of the very last 9 waves up and a reversal candlestick named Dark Cloud Cover. It looks a valid Turning Point. A channel breakout on the downside would confirm this hypotesis.