Advanced Technical Analysis
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
There is very little to add to our intraday note published yesterday. We write this note Thursday night ahead of tomorrow's highly anticipated employment report, which, if perceived to be negative, could cause a swift move to the "first" support levels we cited in that note: SPX 1116-1126, NDX 1413-1437, and INDU 9930-9980 .
The action yesterday in the INDU and the SPX broke the key support levels we cited for gaining confidence in the very near term bearish trend: SPX 1132 and INDU 10144. We would also note that a daily chart "price flip" took place in the trend for the SPX cash and futures as well as for the VXO (see note published 10/5/04). This means that, after the "13" trend exhaustion indicator registered in the SPX (cash and futures) and the VXO this week, the trend may have turned down from an important exhaustive bounce peak according to this indicator.
As our intraday note made clear, many of the hourly divergences on the new recent price peaks that we look for were present at the SPX and NDX peaks. Those, coupled with the daily Demark exhaustion indicators and a completed corrective Elliott wave in both the SPX and INDU (the NDX is open to multiple interpretations), strongly suggest that a correction at least toward the SPX 1116-1126, NDX 1413-1437, and INDU 9930-9980 areas is likely underway.
The combination of the daily Demarks, the completed Elliott wave count, the VXO low, and the relative sentiment extremes noted in yesterday's research piece strongly suggest that these "first" supports will not in fact hold and that the markets could be headed toward new annual lows. We can not confirm that intermediate term (multi-week/month) bearish analysis until the SPX 1105, NDX 1405, and INDU 9980 levels are taken out however.
Further technical deterioration would likely result if we get a negative reaction from the employment report that generates impulsive (5 wave) weakness toward our "first" Fibonacci support areas. From there, we will then be on the lookout for a 3 wave correction before a resumption of the trend lower. If prices move unexpectedly higher today off the employment report, we will then determine where above the recent peaks prices may be headed before determining the next setup.
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e 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 prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at 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 dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess 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 ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter