MIB at critical juncture....new impulsive move or end of correction?

Impulsive wave 1 ended near 14400 and now at a three wave rise at 50% retracement. If this is a correction, the market will break 14700 (intermediate low) and then 14400. Above 15400 bears should get nervous. Long stop 14400 medium term, 14700 short term stop for longs. 15600 medium term stop for shorts. Italian spreads above 510. Outlook negative for this market.

EURUSD in correction mode.....

EURUSD still moves in the downward sloping red channel. Pressures in euro are not over yet.

The move from the lows looks corrective, but could still move above 1,28. 

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EURUSD-SPX-MIB-EUROSTOXX trends....

 EURUSD remains in downtrend channel. Stops considered above 1.3050

SPX daily futures graph shows the overthrow we talked about before and although the red resistance is broken, the market looks unable to confirm this break. Dojis mainly visible in spot prices together with a declining eurusd may prove a negative factor for this index the next few days. 1200 could be tested if not lower.

MIB either in a triangle or in a 1-2-i-ii formation. Red support at least should hold. Early warning the break of the green triangle.

Eurostoxx looks corrective and with euro decling I think sooner or later the decline will be all over this index and the rest european indices.

All in all I have negative outlook for stock markets and the euro. I hope I'm proven wrong. Because the decline in the markets will come with very bad news......

A quick update....

Markets made a strong upward movement at the beginning of the new year, but now they seem to pull back. I was expecting the markets to top last week or at the most to give a final throw off (exhaustion gap up). EURUSD was moving in a corrective manner up to 1.3050 and then markets suddenly remembered again the debt crisis in europe. Now the rest of the markets fall again because of the european debt crisis. Entering long positions is very risky in my humble opinion. I see the downside has more potential and is preferable than betting on the upside.

All in all short positions with a daily close stop above 1283 in SP500 is my preffered strategy. EURUSD still in downward trend....still giving profits. Stops around 1.3050. More to come next week.....

Update 01/06/2012
My stop of 1283 daily close for short positions in spx is very fragile. Personally I believe the markets are topping and it takes time. I have a tolerance level around 1300 but more factors and not only the price of spx will determine if I hold on to my short position. The last 2 months you can see in the blog we made some good profits from forecasting the move in spx and in euro and in other european markets. This makes me more tolerant to sacrifice some winnings in order to support my position. Someone with less tolerance than me to this upward movement should either place a stop at the last high or wait for a clear impulsive down move and short the market at a lower level. Theoretically speaking a double zig zag could have ended or is at its final stages. More details and charts on Monday....have a nice weekend.