"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)

Thursday, January 31, 2013

SPX - Weakness

The preferred scenario, wave [z] or Alt [4] , is weakened by the movement of yesterday and is near to being disavowed (below 1498).
First alternate count: the upward move of the January 29 is a "short" wave [z] / Alt:[5]  , so the Alt: c / y wave is finished and we are already in a downward corrective wave.
Second alternate count: the top of yesterday is a wave  2Alt:[3] and began the correction in wave 2Alt:[4] with the first goal in 1495-1490.
It is time that traders must be very careful.
Have a great trading day...with care!!!


Wednesday, January 30, 2013


Yesterday the market has made the expected breakout of the ascending triangle pattern labeled [x] or Alt [4] wave, which represent the preferred scenario and the first alternative, and at the same time, has invalidated the second alternate count.
SPX may have reached the top of the wave  a/1 of [z] of y , and seems that the uptrend has not yet exhausted.
However, we are less than 5% from the TOP, and I do not know how much fuel still has the market to continue its ascent without stopping to rest.
We are entering in the RED ZONE , that is an area of high-risk loss and low probability of gain.
Have a great trading day...with care!!!


Tuesday, January 29, 2013

SPX - Waiting for a top

The hypothesis of an ascending triangle has not been confirmed by the market movement, however the last two scenarios described yesterday remain valid.
I added my second alternative scenario, instead, and it is bearish and provides for the possibility that is forming an ending diagonal 2Alt:[z] of 2Alt: y
I remain underweight in my US Stock portfolio; yesterday some leading stocks (DDD, SSYS) have collapsed with a heavy sell-off on huge volume.
This is another signal that deserves attention; a top of minute degree is not so far.

Have a great trading day...with care!!!


Monday, January 28, 2013

SPX - Still an upward move

No top of wave y .
The potential reversal of the doji was denied by a fine white candle on daily basis.
Looking at the 15 minutes chart, the market seems to have created an ascending triangle, that could be count both as a second wave [x] that as Alt:[4] .
Consequently, both for the main scenario (updated with wave y still in progress) that for the alternative ( Alt: c in completion), today would be an upward session with the birth of wave [z] or Alt [5] .
Have a great trading day...with care!


Saturday, January 26, 2013

Elliott wave analysis of EUR/USD , USD/JPY and APPLE

In Italy, in my Romagna, is a beautiful sunny day; under normal conditions I would do a walk in the woods with my family and my dog... but I'm sick with cold and fever...damn!


the upward trend seems to be stil in progress;
the bullish scenario is wave [c] of c of a ;
important resistance @ 1.349, that is also the 50% Fibonacci price retracement of wave (d) .

My preferred long term scenario is the same since several months; we should be in the intermediate wave (e) of a triangle wave [B]of primary degree.

New preferred scenario (the ex-alternate); the historical downtrend that has lasted over 30 years is ended, so the new SuperCycle Bull Market is starting.
We should be in the intermediate wave (3) of primary wave [1] of Cycle wave I  .



In the December 11th 2012 post, I wrote:
The Leader does not seem to have finished his fall.
My preferred scenario is for a intermediate wave (c) of primary wave [4] in progress, so the long term uptrend is still intact and we could see new highs. But it is early to open a long position.

AAPL has confirmed my preferred scenario making this week a great breakdown;
now we have to see if it stops his fall on the long term uptrendline or in the 420-430 area (near the 38.2% Fibonacci price retracement).
Any drop below these levels gives precedence to the alternative scenario: wave Alt:[a] of wave Alt: IV.
In this case, the probability that Apple's downtrend advances and kills the market's uptrend is very high.

Have a great weekend!

Friday, January 25, 2013

SPX - Doji plus Apple crash; a worrisome mix

Yesterday a doji occured in SPX daily chart; this could be the technical signal of a temporary top.
Preferred scenario; wave y is finished and is starting a new wave x (or w of minor x);
first alternate scenario; we are in Alt:[4] that finish today then wave Alt:[5] to complete an a-b-c pattern.
The collapse of AAPL is troubling.

Have a great trading day....with care!!!


Thursday, January 24, 2013

SPX - A second alternative count

Today I propose a new count, not because I delete the two scenarios (the preferred and the first alternative) that I follow and consider still valid, but to prove, if there were needed, that even from different analyzes the result is very similar: an impending top.

This new count consider that, from the bottom of 31 December, it is developing a wave y in the form of a zigzag a-b-c, where in the current wave c the wave [3] is ending.
With this new count, the achievement of the Cycle top in 1550-1560 area is only faster than the expected time in the other two scenarios  (1st quarter 2013 instead 2nd-3rd quarter 2013), unless this last intermediate wave (z)  is not a w-x-y-x-z.

Have a great trading day...with care!


Wednesday, January 23, 2013

SPX - Only a top of minuette degree

We are near a top of minuette degree labeled [w].
The intersection between the up-trendline (yellow dashed line) and the 100% Fibonacci price extension (red dashed line) should be a resistance to the upward move but does not mean that a conservative trader should open a short position.
The overshoot in acceleration of 1493 makes it good a second alternate count: the wave 3 of  [3]  of  c of an upward zig-zag a-b-c .
Have a great trading day...with care!


Monday, January 21, 2013

SPX - Always close to a top

The upside on Friday reversing my two main scenarios;
new preferred scenario: y wave is always in progress, close to a top of wave [w] with a double zig-zag w-x-y-x-z ; 
first alternate scenario: the market is close to a top of minor degree (alt:[y] of Alt y of Alt y);
second alternate scenario (not shown): 2°Alt:[3] of 2°Alt:c of an upward zig-zag of minor degree.

The level of a possible top is 1493 where there is the Fibonacci price projection of y = ( 100 * w + x )

Have a great trading day...with care!


Friday, January 18, 2013

SPX - Close to a top of minor or minute degree

Finally the breakout, but with little conviction.
New counts, very different from the previous ones because I raised the degree of the waves to preserve "the right look".
Preferred scenario: it was reached a top of minor degree, wave y now it is starting the downward wave x .
First alternate scenario; we are still in the upward corrective wave Alt:y of y , so the top has yet to occur.
I think that, in the future, we will see a series of corrective waves , type complex,  with many overlaps.

Have a great trading day...with care!


Thursday, January 17, 2013

SPX - It's an exhausting wait...

Still in tight range (on intraday basis, it is as if an eternity had passed....)
What I would say more than the last posts?  Anything, because nothing happened !
We can only wait and see (but be more ready than Homer ;-)
Have a great trading day...with much care!!!


PS: if I was a daredevil like 15 years ago, I would buy some put options and some call options, then I would close those opposed to the direction of the break... but now I'm too old for this madness ...

Wednesday, January 16, 2013

Misleading pattern for SPX, clearer for AAPL

I wrote a few posts ago that the pattern in progress was strange and did not convince me, and I still confirm this.
Yesterday I was expecting a decisive break (out or down), that has not happened; 
now to make reasonable counts becomes ever more difficult  because we are too far to consider valid labeling of minuette and sub-minuette degree without a completion of a wave of minute degree.
I wait the next move to understand where we could be; there are too many alternatives (no really with a plausible count).

Instead, now there are no more doubts, Apple (AAPL) broke the neckline of the bearish Head and Shoulders pattern on Monday with a gap down movement in rising volume, confirmed yesterday by a heavy black candle (-3.15%) with even higher volume.

For fundamentalists, the decline of the last session is explained by the negative reports of Nomura about estimates of iPhone sales that appears lower than expected, which led to the strategist for a cut profits by 5% over fiscal year 2013 and 8 % on 2014 (Apple fiscal year ends in September); Nomura sees a fair value of Apple  between 400 and 660 (!)

We know that fundamental analysis generally has little value for trading (what is the sense of a "fair value" range where, from the high (660) to the low (400), there is 40% of difference?!?), and moves in lagging (from the top of the right shoulder stock has already fallen by almost 20%), but the trend of Apple puts a little apprehension on NASDAQ and the "ballast risk" is high.

I have already analyzed AAPL over a month ago and last Saturday, and according to the Elliott Wave Principle, my outlook was bearish so I'm not surprised of the fall.

But , if someone asked me why I did not go short, well one thing is to assume a stock drop (as important as Apple) another thing is short it when the underlying trend of the market is bullish; it is against my trading rules go against the trend.

Prospects? The first target is to 428, the 38.2% Fibonacci retracement of the previous bullish wave and the level at which an important breakaway gap up is closed, but before getting to these levels, prices will meet the bullish uptrendline of the long wave started in April 2003 and if I will not see a reaction, here, I'd be very surprised.

* chart replaced at 9:50 am because the notes in the yellow boxes were in Italian and not in English; I apologize for the mistake

Have a great trading day...with much care!!!


Tuesday, January 15, 2013

SPX - The time has come, break-out or drop down.

SPX spent another session with a sideways action without worrying that Pres. Obama will not negotiate debt and AAPL falls by 4%.
The main scenario and the alternate do not change; on intraday basis, it's possible to see a nice Cup with Handle pattern, but the breakout is needed today or the pattern has failed and a downward move becomes more likely.
Have a great trading day...with much care!!!


Monday, January 14, 2013

SPX - Waiting for a true breakout

Friday's movement  doesn't change my preferred and alternative scenarios described in my post of January 11, which I fully reference.
I'm waiting for a true bullish breakout, even if the pattern doesn't convince me.
Have a great trading day...with much care!!!


Saturday, January 12, 2013

Elliott wave analysis of GOLD, CRUDE OIL, NDX and AAPL


the wave (2) seemed to have ended at a Fibonacci price cluster [0.786 * (1) + w = y ];
this is the last chance to climb upward in the wave (3) intermediate, otherwise prevails Alternative count [Alt(y) wave downward]


it seems that the bullish wave [c]  is completed and so even the wave 2 / bbut the pattern is not clear.


New preferred count; wave i of wave 5 seems to be in progress, AAPL allowing, otherwise Alternate count prevails.


In my previous post, December 11th 2012, I wrote:
The Leader does not seem to have finished his fall.
My preferred scenario is for a intermediate wave (c) of primary wave [4] in progress, so the long term uptrend is still intact and we could see new highs. But it is early to open a long position.
In a month almost nothing is happened ; now AAPL is in a key point: bounce or breakdown, and if it drops can drag down all the market.

Have a great weekend!


Friday, January 11, 2013

SPX- Strange pattern

Yesterday there was the awaited breakout, but following a pattern not easy to label that shows a lack of enthusiasm and conviction of the market.
I would have expected something better.
If the breakout is good, it will be the preferred scenario to prevail; in which case we could be in wave 3 of [c] .
If the breakout failed, the alternative scenario will prevail (the yesterday up move is only the wave Alt: x of Alt:[x] wave, irregular type, that is still in progress).

Have a great trading day...with care!


Thursday, January 10, 2013

SPX - Sideways action to recharging the bullish thrust

The market is recharging with a tight flat move.
The alternative scenario begins to prevail over the main.
New preferred scenario (the old alternate) is that highlighted in the post on January 8; wave [b] is a double three or triangle pattern, with the waves a/w - b/x - c/y already completed;
the new alternative scenario provides for the possibility that the market will go down with a deep correction; in this case, the first wave Alt: [w] would have finished January 4th (not January 3rd), the first wave Alt:w is completed, the second Alt:x is ending, and the third Alt:y would come down to 1432 to complete the wave Alt:[x].
Even yesterday I increased my U.S. stock portfolio, now it is full.
The odds for a quick upward thrust remains high.
I hope that this will really happen...

Have a great trading day...with care!


Wednesday, January 9, 2013

SPX - Close to a first bottom of minuette degree

Although we can not yet exclude the first alternate scenario described in the previous post, the movement of yesterday's session confirms the preferred scenario; wave [b] is ending, first target 1429-1427 therefore close to current prices.
The second alternate scenario considers the possibiliy of an extension of bearish c/y wave down to 1432 (50% Fibonacci retracement).

Have a great trading day...with care!


Tuesday, January 8, 2013

SPX - Correction in progress

Indexes in fractional and slight decrease, with several leading stocks that continue to outperform (see "US stocks" page).
I confirm my preferred Elliott wave count: wave [b] is in progress and it is started the third downward wave c/y;
first alternate count: wave [b] is a sideways pattern, such as three (w-x-y-x-z) or triangle (a-b-c-d-e), that could also end today.
Have a great trading day...with care!


Monday, January 7, 2013

SPX looks tired

Of Friday, markets finished up on lower volume.
The minor uptrend is intact but the pattern is not clear; according to my preferred count, SPX could build an irregular a-b-c  of wave [b] ; wave c is in progress.
Have a great trading day...with care!


Friday, January 4, 2013

SPX - Consolidation is needed

The market may have reached a temporary top of wave [a] ; it has not yet been fully digested the Cliff deal, because it needs further decisions by the end of February to raise the level of debt and the spending cuts.
A consolidation is likely and also healthy.
My preferred Elliott Wave count remains the same; next support level: even down to 1424 closing gap , in the worst-case scenario, but I do not think to open short position (if not on intraday zig-zag wave c/y) ; too much risk, the trend is up.
Have a great trading day ... with care!


Thursday, January 3, 2013

SPX - The massive rally confirms the new bullish wave

The Cliff deal seems to convince the markets.
December 28 of last year and yesterday I predicted a bottom of minute or minor degree.
This forecast seems to be correct; the bottom of minor wave x is confirmed, so the third upward wave y is in progress; next first target @ 1500.
But yesterday I wrote: "On the charts at a lower degree (1-3 minutes) the new upward move does not appear an impulsive wave..." instead I was wrong; this is the strength of an impulsive wave !
The Elliott wave SPX count in the daily chart is essentially the one posted in the November 11, 2012 in the "US Index Long term view" page, only slightly updated; that in the hourly chart is one of the two preferred scenario posted in the last day; the last chart is the one I use only in intraday trading (and change several times a day...); very beautiful the saucer pattern in wave 4 ; it's is one of my preferred buy setup.
I hope that the multi-week sideways phase is finished (it was very hard to read and count), although I think the terminal phase of the primary wave [Y] will be neither predictable nor painless.

Have a great trading day...with care!



Wednesday, January 2, 2013

SPX - Waiting for the market reaction

Now let's see how the market reacts to Cliff deal.
SPX has formed a new bottom, creating a triple zigzag  [w-x-y-x-z] rather than the double zigzag expected.
On the charts at a lower degree (1-3 minutes) the new upward move does not appear an impulsive wave...
For the rest referring to the last SPX post... "now we have to understand if it is a wave w of minute degree, then only a rebound in the downward minor wave x , or if it is the final wave y of x , then the bullish corrective minor wave y is beginning. These two scenarios have the same odds."
Have a great trading day...with care!