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Friday, January 6, 2012

SPX Intraday Analysis Week Ending Jan. 6, 2012


At the end of the day on Friday, the market broke to the downside of a converging triangle. This is bearish, but there is immediate trend support right around 1276. A proper wave count would typically help one determine a probable move in these types of scenarios. Even though not on the chart, I see this support being broken and the continuation of wave c downward. I can deduce this information because triangles occur in waves B and 4.


I have labeled Fibonacci supports that are seen as the 3 price levels. I have not gone into at all how I determine target points using Fibonacci numbers, but I will in future posts. These 3 levels are price levels we will see a point of support or consolidation. These are NOT prices to place long orders! I use intraday analysis to determine longer term trends. Fibonacci numbers are excellent ways to determine target price levels. Just a snip of information but in this chart, I took the last advance in the triangle to give me Fibonacci retracement levels. These price points are generally quite accurate.


I love trend lines. They are the basis for technical analysis. What some people neglect is there total usefulness and effectiveness. Although since studying Elliott Wave, the way the markets move have more of a rationale behind them. Some may be wondering why there are no Elliott Wave labels on all these charts dedicated to Elliott Wave?

I may put some labels on smaller time frames like this, but generally it is going to be with the larger time frames that I will put the labels. The reason behind this is that I want the market to work for us. A lot of the time on an intraday basis, Elliott Wave counts change very often. I like to step back from the day-to-day and focus, for now at least, on the larger picture. Just by using simple technical indicators like trend lines, I foresaw a significant decline coming in 2008; I had no idea at the time how much money I was going to save! I also foresee another larger decline coming being in the large expanding triangle we are in.

I will be continuing to analyze the U.S. markets objectively though. Even though I believe we are in the midst of a larger degree decline, I'll no doubt be giving unbiased technical analysis. 


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