End of upward correction or new highs ahead in S&P?

 S&P is moving as expected during the last week. After having broken the inverted H&S is now moving towards the 1360-70 target mentioned in previous posts. The move in S&P from the June lows is most probably a wave 2 after the 5 down (1422-1370). The wave structure from June lows to now is in 3 waves. Wave 2 target from the inverted H&S coincides with the 61,8% retracement near 1362. Assuming that this is a corrective upward move, then it will probably be over in this or next week. We mentioned before that time was needed for this correction to unfold, at least until the end of the month.

Taking a closer look in the intraday chart we certainly see that wave C (or 3 for the bulls) is not finished yet. We clearly see 3 waves up and the 3rd is not finished yet. More upside is very possible towards 1360-70. Now if the index moves below 1305 any possibility for an impuslive move from 1270 will be zero. Bears want the index to move below 1305 after wave C is finished. Bulls want to complete this 3rd wave and then to be followed be a 4th and a 5th (to new highs favourably). So in the short term, prices are biased towards 1370. As long as no impulsive move from 1270 is completed, the intermediate and longer term trend will change to down. 1422 area is very important not to be broken if this market is to turn down soon. On the other hand 1270 should hold even if 5 waves up are completed.

Thank you for taking the time to read my post.

EUR/USD euphoria fades, dollar strengthens

The impact from the greek election results was very clear in early Monday session in fx. EUR/USD opened with a gap up that reached 1,2750 area. This however was shortlived. The pair since then is sliding and during the european openning session it pulled back towards 1,2620. The move looks corrective but still in force. The pair bounced as expected at the lower pitchfork support and after testing the middle pitch fork, is now above that resistance. As long as it holds above 1,2550 the pair will try to reach upper pitchfork resistance at 1,28 area. As noted before bears should be on high alert to pull the trigger again.

GBP/USD has reached the 50% retracement and might still has power to move towards 1,59. The form of the rise is in 3 waves until now and still considered a counter move to the huge decline. Support level is at 1,5530.

Thank you for taking the time to read this post.

Greek stocks turn strongly upwards

 Greek elections are going to take place this Sunday and everyone in europe has one eye on the result and the other on a sell button. Greek stocks on the other hand rallied the last two days. Banks made almost a 30% plus upward movement discounting the positive result of a New Democracy win.

 

 The market will interpret a New Democracy win as a good result. The market has already discounted part of the result. Increased volume and strong upward movement has pushed the index above resistance levels and outside of the downward sloping channels.

As can be seen in the following two daily charts, that depict National Bank of Greece and Eurobank, there are lots of similarities with the rally at the beginning of the year. Increased volume, break of resistances, break of downward sloping channels, break of EMA and the form of the rise look very similar to what happened in early January that resulted in a huge rally.

 First attainable target for prices to go after the elections is the level they were in early May during the first elections. NBG could test 1,70€ and if volume stays high and higher highs are made, the stock could reach 2€ and even higher. EUROBANK has not declined as much as NBG and has less road to cover to reach early May levels. At 0,70€ is the first resistance and the next one is at 1€.

 The positive scenario expects the market to continue to rally specially if  good election result is combined with steps taken by the ECB to help the european banking sector. The target of this scenario could be higher than the February highs.

The negative scenario will see the market rise only for a while after the elections as the pre election rally might have discounted any good result. If the newly appointed government in Greece after the elections shows the same inability to change things, the market will come back down. 

In the case that the leftist party SYRIZA wins the elections one thing is for sure...panic will prevail in the markets. The markets have shown that they preffer a New Democracy win and want to avoid any possibility that a government will be formed under the leftist party. It was rumored yesterday that central banks are prepared to encounter such an event by providing liquidity if needed.

S&P next stop at 1370 or 1260?

S&P has managed the last 3 sessions to fool both bears and bulls. After the sharp upward movement from 1270 to 1335, the index is consolidating between 1305-1330. Taking into consideration wave (III) and (IV) as the left shoulder, wave (V) as the head and the recent consolidation as the right shoulder, if the neckline at 1330-35 is broken then the target is 1370 cash. Apart from this inverted H&S pattern, the upper pitchfork resistance also lies at the same level as the neckline that needs to be broken for a rally to happen.

On the other hand, intraday analysis of the last 3 sessions, shows another H&S pattern that if broken downwards the decline will be steep. For this bearish scenario to come true, the neckline of the bearish H&S at 1305-1300 must break. Target of this H&S is 1260-70.

According to our most possible wave count, we expect the inverted H&S to materialise and the index to finally break 1330-35 and move towards 1370. That will most probably be the end of  wave 2. New highs above 1422 cancel this very bearish scenario.

Thank you for taking the time to read this post.

AAPL trending upwards

A few days ago my bullish view on AAPL was posted (visit this link http://profitablerisktaking.blogspot.gr/2012/06/aapl-with-bullish-view.html). Today I just want to confirm that the wave counts are proceeding according to Elliott wave rules and the bullish scenario is intact.

As can be seen in the 10 minute chart, the stock has made another, lower degree, 5 waves up and 3 waves down at the 50% retracement. For the time being we expect the stock to continue upwards impulsively. First target is previous highs that pose the first resistance level. Below we have support near the 61,8% retracement 564$. It wouldn't be good for bulls AAPL to move below that retracement.

Thank you for taking the time to read this post.