The decline in S&P is corrective.....

 If you are using elliott waves you know that impulsive waves consist of 5 waves. Recent movement in S&P is a clear 3 wave move. I cannot count 5 waves down because they are not there. I try not to be biased and see 5 waves where they are not. This doesn't mean that the index cannot go lower. As mentioned yesterday, if 1398 is broken, the road is open to revisit 1380 level.

Important support is found in 1400 area with 1398 low signalling the possibility to see 1380 if support broken. However the bigger picture is more bullish to me than bearish. I don't think the market reached 1420 just to make a 4 point higher high. Tomorrow Jackson Hole speech is at the centre of attention and I think the market will pick up  volatility and start a new upward trend at the beginning of next week.

Thank you for taking the time to read my post.

Would you buy something that is getting scarce?

COCOA is something that will be featured many times in future posts. For now I just want to make an small introduction to my first post regarding this commodity. 

My long term view is extremely bullish for COCOA as long as prices stay above 2000$ per Metric Ton (MT). I target 3000$ for short to medium term. For the time being 2400$ is the first important support.

You could get an idea of what is going on in the cocoa market by checking the following links.

 http://www.independent.co.uk/life-style/food-and-drink/features/chocolate-worth-its-weight-in-gold-2127874.html

http://www.scientificamerican.com/article.cfm?id=africa-grows-too-hot-to-grow-chocolate

http://www.dailymail.co.uk/news/article-1351066/Will-chocolate-drought-World-s-supply-sustainable-cocoa-run-2014.html#ixzz1CMCLQODv

The trading stance that one should follow is definitely bullish. Any price pullback should be considered as a buy opportunity. However patience is needed as this move is still at its starting point and I prefer adding to my position as prices rise and break resistances or near suport levels. Always manage your risks and do not put all eggs in one basket.

Thank you for reading this post. If you want help with trading or have a question don't hesitate to contact me.

Trading levels to watch in S&P and DJIA

Both S&P and DJIA as depicted in the charts have made 3 waves down from recent highs.  If the lows are broken, both indices will most probably decline towards 12800(DJIA) and 1380(S&P). 

This could just be wave A. The upward move could be wave B and we now are expecting wave C that could coincide with the Jackson Hole speech of Bernanke.

Therefore 1398 (S&P) and 13027 (DJIA) are important supports that could work as a stop-reverse. In the case that the 3 wave correction has ended at the above mentioned support levels, a new upward move is ready to start and Friday's speech at Jackson Hole could  be the reason for the markets to rally. 

If however the markets slide sideways close to the resistance levels (13176 DJIA-1416 S&P) one could try and sell short with those levels as a stop reverse.

GDP figures are being announced before open and could provide volatility in the futures market. Taking action before the announcement should be protected with stop loss orders.

Thank you for taking the time to read my thoughts.

EURUSD inside upward channel

 EURUSD is trending upwards within our red channel. The move still looks corrective, with those overlapping waves as the main characteristic. The move could unfold into an impulsive wave but I feel it is more possible for the bigger downtrend to resume. The pair could try and test the lower red channel support just below 1,24. If this upward move continues to have overlapping waves it could top around 1,2650-1,27.

Taking a closer look at the 30m chart, we can observe that all the upward moves look and feel impulsive, whereas the down moves are overlapping and with corrective form. As mentioned above this move inside the red channel could become a larger impulsive upward wave. But still it is not one. Therefore we have to be mindful of the bigger downtrend that can resume any day now. 

If you need more info or help with trading this pair don't hesitate to contact me. Again thank you for reading my thoughts.

S&P targets 1500

S&P despite the European debt crisis and many pessimistic reports from big investment banks, has managed to hold support and rally to new highs for the last 4 months. 1422 level was broken but not held. A quick correction towards 1400 may have given the index enough power to resume this upward move. Our simple EMA trigger method has been LONG since 1350. As mentioned at late July, many things would show that an imminent large decline is soon to come, but the market was not breaking any support. And if market is at its support, we do only one thing...buy!! Volatility was high but staying above our trigger was making the bearish scenario weaker each day.

 I mentioned several times that after August 1st volatility would pick up and the market would start a new move. I was giving more chances to a decline, but since support levels held, the market had only one way to go. After a  the decline at 1354 low, where EMA stayed unbroken, market started a move to new highs. For me this move is not fake and the new highs are still to come. My view is that after breaking important highs like 1422 was, the market usually makes at least 50 points higher and not only a 10 point newer high. Stops were trigger at 1422 and after the correction to 1400 I think the market is ready to retest the 1420-30 area.

 In the 60m chart S&P has clearly made 3 waves downwards. A move above 1416 would confirm that the decline from 1426,68 is corrective. I expect the market to make a move towards 1470. Support lies at 1398 and 1390. At this point QE3 expectations are driving the market higher. Comments by officials, against such an action, would be the causation of a downward correction. For now chances are that we are heading higher above 1430.

Thank you for taking the time to read my posts.