eod – Page 2 – Elliott Wave Analysis

S&P 500 EOD Review 15 Dec 2011

The indecision is slowly eating away any confidence that is left in the market. The tide is turning down but it is not decisive yet. The top of the Triangle line (blue line) has been penetrated and is being tested from the bottom. The 1-2-i-ii scenario is picking up pace. I expect at least another leg down to 1200 before a correction comes in. It could go as low as 1185 as well.

S&P 500 EOD Elliott Wave Chart 15 Dec 2011

There is no divergence on MACD and that is also not good.

S&P 500 Fibonacci Confluence

The Fibonacci Confluence Chart is looking bad for the bulls as well. Look at the area highlighted with red arrow. This same pattern is playing out currently. The next stop is at 1185.

S&P 500 Daily Fibonacci Chart 15 Dec 2011

S&P 500 Volume

The volume is relatively lower compared to the selling in the previous two days. But still there is no decisive move which means that the bulls are equally strong. Once the indecision is over, we can expect a strong move either up or down.

S&P 500 EOD Review 14 Dec 2011

The S&P 500 is slowly edging downwards. The last 2 down moves are impulsive and this could be counted as 1-2-i-ii type of move but I think that it is actually a zig-zag which completes the leg e of the Expanding Triangle. But there is still no divergence on the MACD to the upside.

This down leg has retraced 50% of the previos up leg. The 61.8% retracement is at 1200.

S&P 500 EOD Elliott Wave Chart 14 Dec 2011

If the market is poised to move higher, buying should come in soon. Otherwise, the bears are going to win and a sharp sell down can be expected.

Alternate View

The 1-2-i-ii type of move is unfolding which is setting the stage for a 3 of 3 powerful move down. Reason why I’m still not buying the 1-2-i-ii move is because the down moves are not as strong as the previous upwards moves that we saw on 28 and 30 Nov 2011. Therefore this leg down is looking relatively weaker and does not support the notion that we are in 3 of 3.

There could be a horizontal Triangle forming on the daily as well with this final move leg e of the Triangle.

S&P 500 Fibonacci Confluence

The Fibonacci Confluence band at 1220 – 1228 got penetrated and the S&P 500 stopped at the next band which is 1210. As mentioned yesterday, this type of move is not looking good for the bulls.