"All human activities have three distinctive features: pattern, time and ratio - all of which observe the Fibonacci Summation Series" (R.N. Elliott - "Nature's Law - the Secret of the Universe" - 1946)


Wednesday, November 21, 2012

SPX - The upward movement needs to take a break

Stocks end choppy session flat.
On the downside, "Bernanke warns Congress to avoid fiscal cliff,... to raise the federal debt limit to prevent the govenment from defaulting on Treasurys debt, but also... to reduce the federal debt on the long run to ensure economic growth and stability" (The Motley Fool); inaction is already affecting the economy.
On the upside, housing starts at 4-Year High.
SPX has touched the first strong resistance which is equal to 50% Fibonacci retracement of the last bearish Elliott wave of minute degree (b or Alt:3)
Yesterday, the intraday pullback was too small, in time and price, to believe that wave [2] or [b] is completed, so I think that tomorrow can be another sideways or slightly bearish session; the market could take a break to rest and reflect.
It would be interesting, for trading purpose, if the index builds a flat base that forms the right shoulder of a potential  H&S pattern, but with "if" it is not possible to trade in a profitable manner;
it's better respect the old rule "trade what you see and not what you think", so I wait outside to see what the market really does.

Have a great trading day...with care!

ElwaveSurfer



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