Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Jason Haver: Bears Make Some Noise in US Equities

By

A look at the next targets and key levels.

PrintPRINT
Bears made some noise yesterday, as the market opened with a big gap down. Yes, you read that right (I'm picturing bulls pulling out their dictionaries and looking up the word "down").

Chart-wise, there are a few interesting tests underway. First off, Wednesday's bearish sell trigger became active in the S&P 500 (INDEXSP:.INX) when price crossed below 1832, and that trigger break targets 1817. The alternate count is that 1820 marks the bottom of a corrective c-wave, but that appears lower probability. Bears will want to be cautious if the market can convincingly reclaim the black (2)/(4) trend line on the chart below, and very cautious if 1839-40 is reclaimed.


Click to enlarge

In the bigger picture, price has reached an intermediate trend line, and I think the next few sessions will be extremely telling. The fact is, while it's fun to play at getting far ahead of the market and making grand predictions about the upcoming months, it's simply too early to make much of the wave structure at intermediate degree yet -- so I'm going to take this one day at a time for the moment. As the structure develops, we'll be able to draw more concrete conclusions about the market's intentions beyond the next session or two, and the chart which follows this will show why bears will want to stay nimble here.


Click to enlarge

The chart below shows that we may now be in the c-wave of an expanded flat correction. This was an option I discussed last week, and it's completely viable as a nasty whipsaw move. The expanded flat would break 1815, then find support shortly thereafter. The textbook target for an expanded flat c-wave is 1795 +/-, though, theoretically, next support is near 1810-15.


Click to enlarge

In conclusion, SPX tested trend support yesterday, and while it held on the first test, the wave structure (and Wednesday's trade trigger) suggests it will break -- so near-term, I expect further downside to capture the target zone. Beyond that, bears still have their work cut out for them at the next key noted levels, while to the upside, bulls want to try and reclaim 1828 and 1840. We'll examine the intermediate picture in more detail in the upcoming updates. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of Twitter: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE