S&P 500 EOD Review 23 Nov 2011

The S&P 500 headed lower still and came close to the target range of 1153 – 1159. It closed at 1162.31. Has the sell down ended? Has the market hit a short term bottom? Looking at the waves, I think that the S&P 500 has a few more points to go and would probably hit 1159 or even 1153 before turning up. That is 10 more points. This would mark the end of Subminuette iii (or Minute [x]). The next expected move is upwards with a target of 1205. That is the 38.2% retracement of Subminuette iii (from the current level). Another possible target is 1197 which is the top of the Micron[4].

S&P500 EOD Elliott Wave Chart 23 Nov 2011

There is a small divergence in the MACD as well.

Alternate View

The Alternate view is that this marks the end of Minute [x] and the next move is an upward move to begin Minute [y]. This up move would be the early phase of Minute [y] and for now, I’m labelling is as Minuette (w).

This upwards move will confirm which is the correct count. It would tell us whether to go with the Primary count or the Alternate view. Things to look for would be the character of the move. If it is choppy with a lot of a-b-a-b type of move, then the Primary count is the correct one. On the other hand, if it is impulsive with volume confirmation, that would indicate that the Alternate view is the correct one.

Volume

Volume is still not picking up which is raising a question on the probability of the Primary count.

S&P500 Daily Volume Chart 23 Nov 2011

Fibonacci Confluence

The S&P 500 came close to the next Fibonacci Confluence band and paused. Maybe it will touch the band in the next session before turning up. The next band is at 1152 – 1159.

S&P500 Fibonacci Daily Chart 23 Nov 2011

 

Shangai Stock Exchange (SSE) Review

The Shangai Stock Exchange (SSE) has completed what looks like a Leading Diagonal and the correction of this LD is panning out. This correction is likely to retrace either 61.8% or 50.0% of the Leading Diagonal. This gives us a target of 2777 or 2688. The correction has been choppy and I can’t place an impulsive wave count in that move. I’m labelling the first wave up as Minor W. Minor X seems to be in progress in a flat correction and has either ended in yesterday’s session or is ending soon. This means that Minor Y is to follow soon.

Shanghai Stock Exchange Primary Elliott Wave Review

The target for Minor Y is 2766 (161.8% of Minor W) or 2621 (100.0% of Minor W). Note that the 123.6% extension is at 2676 which close to 61.8% of the retracement of the Leading Diagonal. This could also be a realistic target.

This is the Primary count because of the volume pattern as well as the the first wave down of Minor X which looks like an a-b-c correction rather than an impulsive wave.

Volume

The volume on the way up has been higher than the volume on the way down. Infact, the volume on the way down is decreasing which means that the selling is losing strength. That’s a bullish sign.

Alternate View

The Alternate view is that the Intermediate (2) has ended and the wave Intermediate (3) has started. The SSE is at the early phase of the Intermediate (3) with Minuette (i) and (ii) completed and Minuette (iii) in progress.

Shanghai Stock Exchange Alternate Elliott Wave Review

As you can see, I’m bullish (near term of two months) on the Asian markets and some of the Asian stocks that I follow but bearish on the S&P 500. I chart the moves primarily using Elliott Wave Principle and purely from a technical viewpoint. And based on Elliott Wave and the technical front, my interpretation is that Asia is bullish (for the time being) and S&P 500 is bearish. The next few days will give us more clues on which is the right direction to go with.

S&P 500 EOD Review 22 Nov 2011

The bears are still having a break it seems, or have they gone for a holiday? It was a very lacklustre session with minimal moves on either side. Here’s the updated Primary chart.

S&P500 EOD Elliott Wave Chart 22 Nov 2011

It appears that it is in a corrective phase in either a triangle or a flat. I prefer the flat as that would bring the S&P 500 higher to 1210 region for a decent relief rally. But as of now, it appears to be in a triangle. If it is indeed a triangle, then, it is in D leg to be followed by E and then a push down to 1153 – 1158 region to complete Subminuette iii.

Alternate View

Alternate view is that this whole down move is Minute [x] and this has ended at 1181 and it in early phase of Minute [y]. If we take a look at the volume and the strength of the move, the volume at Subminuette i was stronger than Subminuette iii. This is abnormal as waves 3 should be the strongest wave in a move with price and volume confirmation. But this is not the case here. Also, notice that the volume has been decreasing for the past few sessions. This indicates that the selling is losing steam.

S&P500 Daily Volume Chart 22 Nov 2011

I would watch the volume for the next few sessions and if it increases on the way up, this alternate view will be promoted.

Fibonacci Confluence

Here’s the updated Fibonacci Confluence chart. S&P 500 tried to break the current band at 1184 – 1187 to the low side but the bulls came to support and turned the bears away. But the bulls were not strong enough though and only managed to push the price up to 1197 from 1181. The bears came in and tried to push it down again but got stopped at the top of the band at 1187. If this band breaks the next level is 1159.

S&P500 Fibonacci Daily Chart 22 Nov 2011