Thứ Năm, 24 tháng 5, 2012

S&P 500 Downtrend đến Quý I/2013 - 5* S&P 500 5 Year Elliott Wave Analysis

 S&P 500 Downtrend đến Quý I/2013 - 5*

S&P 500 5 Year Elliott Wave Analysis – 23 May 2012,  

A 20 point drop which was completely recovered and in fact resulted in a positive close on the S&P 500 by 2 points. The bias is still downwards after breaking the neck line of the head and shoulders formation as well as the major support at 1340. It appears that the market needed to take a breather and that is what it got in the last two sessions.
The event of breaking 1340 as well as the earlier notion of a contracting triangle needs a complete review of the waves and I present here a likely count. This is the daily chart of the S&P 500 and it displays the earlier followed contracting triangle with the lower boundary in light blue. This was broken and with that it is possible that we have a truncated Minute [z] and the market trend might have turned down. But I can’t buy into the idea that the market trend has changed as we are at a high of the market and a trend change of this degree would only happen after a period of extreme bullishness. This trend change happened in a bearish tone with the looming Euro debt crisis.
S&P 500 Technical Analysis Chart 23 May 2012
S&P 500 Elliott Wave Analysis Chart 23 May 2012
So I looked for an alternate count which could indicate that the S&P 500 is undergoing a correction before the final surge to end Primary wave [B]. In the same above chart, an expanding triangle is now put up as a likely count. In this count, the idea is that the S&P 500 is still in the Minute wave [x] which is likely to end at 1245 region. Following that Minute wave [z] is expected to bring the S&P 500 to a high of 1450. This count is in line with the current sentiment as the Euro debt crisis is still looming especially with the issues in Greek Elections. There is still no clear direction on what might happen to Greece and as usual, the stock market reacts overly negative in such situations. The EU is trying to save the issue from escalating and I think that they might be close to a package but it would probably only be announced nearer to the Greek elections on 17 June 2012 and confirmed right after the elections. That would then cheer the markets and it would likely embark on Minute [z]. The US might also announce further stimulus during the same time to show that it is a concerted effort.
If this analysis is correct, it would be similar to July 2007 where the world stock markets tanked for about a month of so, as the looming housing crisis in US came to light. The FED announced drastic rate cuts and then the markets cheered and made a new all time high on the S&P 500, only to crash beginning Oct 2007. The same scenario might be playing out here.

S&P 500 Primary Elliott Wave Count – Weekly Chart

This is the Primary Elliott Wave Count on the weekly chart for the S&P 500. Notice the stock market move in July 2007. The sentiment is probably the same now with the Euro Debt Crisis. It is likely that the EU and US will definitely step in to contain the crisis and some stimulus or assistance is likely to be offered to Greece.
S&P 500 5-Year Technical Analysis Primary Chart 23 May 2012
S&P 500 5-Year Elliott Wave Analysis Primary Chart 23 May 2012

S&P 500 Alternate Elliott Wave Count – Weekly Chart

This is the Alternate Elliott Wave Count and this is a intermediate bearish count that points to the S&P 500 heading to 1000 region before making a final attempt at 1500. This count is still valid but is of quite low probability at this stage.
S&P 500 5 Year Technical Analysis Alternate (1) Chart 23 May 2012
S&P 500 5 Year Elliott Wave Analysis Alternate (1) Chart 23 May 2012

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