Advanced Technical Analysis
Prices languished until the Fed meeting announcement then spiked hard upward for 45 minutes and then promptly gave back all those points gained in the following 45 minutes for an effective round trip. How this thrust upward fits into the near term or intermediate term ambiguity is anything but clear at this time. You'll recall we were looking for a move to lower support to possibly finish off the 5th wave down from the 4/27 highs while conceding that any move above Monday's highs would argue that that 5th wave bottom was already registered and that some sort of multi-day bounce to higher resistance levels would be in order. Yesterday's spike up and then down does nothing to clear up that near term ambiguity. We are waiting too, to see what kind of multi-day bounce prices trace out to determine if the bullish or bearish interpretation of the intermediate term (multi-week) was operative. Again, yesterday's price action did not lend any help to that goal. For now this volatility keeps us on the sidelines trade-wise. If prices break below SPX 1112, INDU 10266, and NDX 1409 would argue that either the 5th wave low from the 4/27 top was tracing out (in the area of SPX 1100-1105, INDU 10180-10220, and NDX 1390 (+/- 5 pts) OR that the bearish wave (III) scenario that calls for lows beneath the 3/24 lows was once again underway. However, if prices move above SPX 1125, INDU 10360, and NDX 1432 in short order, then the upper resistances are likely to be reached in the bullish 4th wave triangle scenario we have discussed: those broad resistance targets are SPX 1130-1140, INDU 10400-10460, and NDX 1450-1470. No clear picture for now until the very near term trend shows itself by breaking down below SPX 1112, INDU 10266, and NDX 1409 or breaking out above the SPX 1125, INDU 10360, and NDX 1432 areas. A breakdown points to SPX 1100-1105, INDU 10180-10220, and NDX 1390 (+/- 5 pts). A breakout points to SPX 1130-1140, INDU 10400-10460, and NDX 1450-1470.
S&P 500 (SPX)
As the summary above stated, the SPX is not clear in the near term until a breakdown below SPX 1112 (which points to 1100-1105 at least if not a more rapid wave (III) decline toward the 3/24 lows) or a breakout above SPX 1125 (which points to 1130-1140). The near term Demarks, momentum gauges (MACD, ROC), and Elliott wave interpretation all remain unclear. We simply cannot state with any degree of confidence how yesterday's price action fits into either the intermediate term (bullish 4th wave triangle to eventual new highs or bearish wave (III) down below 3/24 lows) or the near term picture. Stay tuned.
The Nasdaq 100 (NDX)
Same as the SPX; a breakdown below 1409 is bearish at least to 1385/95 or perhaps even lower toward the 3/24 lows if the bearish intermediate term trend is operative. A break out above 1432 points to NDX 1450-1470 in a bullish ongoing 4th wave triangle from the January highs. At this juncture, yesterday's trade has only confused the very near term picture and we are still waiting to have more price evidence to make a better judgment on the intermediate term bearish or bullish call. Stay tuned.
Dow Jones Industrials (INDU)
Same comments here as the SPX and NDX. A breakdown below 10266 points to 10180-10220 at least if not the 3/24 lows if the bearish wave (III) intermediate term trend interpretation is operative. A breakout above 10360 points to 10400-10460 in a wave C of an evolving bullish 4th wave triangle from the March highs. Stay tuned.
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