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Trade Desk Thoughts: S&P Picture Perfect Technical Set-Up Trade Desk Thoughts: S&P Picture Perfect Technical Set-Up - Nov 6 09 13:17 EST
S&P Picture Perfect Technical Set-Up
On the hypothetical, technical book example chart below, the blue line of a correction point, or the first part of a larger impulse count of a bear market, is shown. In this case the market makes a technical pull-back after the first five waves, usually for around 61.8% of wave 1/A distance, before the trend may continue; in our case lower. Once the market reaches this 61.8% Fibonacci retracement area, the set-up to catch the trend in an expected wave 3/C is shown, and is technically perfect, considering the small risk (above the high in bear market) and huge reward that comes in somewhere below wave 1/A bottom; at the same distance of wave 1/A measured from 2/B top.
The live S&P 4 hour chart below is showing the same pattern discussed above. The market made five waves down from 1098 top to 1025 area, where wave 1)/A) was completed. After that, market made an expected three wave pull-back, labeled as red A, B,C, of a blue wave 2)/B), called a correction.
The significant resistance zone of this correction comes in at the1065-1070 area; around the 61.8% retracement point that is mentioned above, in thehypotheyical link. The wave count is shown as a clear set-up for an expected move lower, into a powerful wave 3)/C) leg, which will be confirmed if the wave B low, and 1025 resistance are taken out. If this wave count is correct than we believe that dollar should benefit against the majors over the coming week as risk aversion would then have hit the market, and as stocks are sold (lower S&P), bonds are bought, and the dollar tends to move higher. The critical resistance zone of the wave count is shown at the 1098.50 area, where the breakout would invalidated the current wave count, as wave 2) must not make a retrace for more than 100% of wave 1) distance. If you would like to be a part of TheLFB.com to receive these kind of charts, with these opportunities every day, and if you want to know what comes next and what to expect from the market, than join us now.
For a forex proprietary news feed for your site, contact us. Written by TheLFB Trade Team, © 2007-2009 LFB Services, LLC. All rights reserved. |
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