S&P500 short-term: Thrust Ahead!

Last post suggested a Triangle in the making. The pattern is now either complete, or close to completion, and most likely followed by a thrust up towards 1195. Today, i'll be posting just the 5-min chart.

Click here to look at what an idealized Triangle should look like. Wave D in the above chart did not quite reach the upper trendline. Otherwise, the pattern looks complete and ready for the thrust, which should be in the direction of the major trend - up! Price has to break through 1175 with force to confirm the thrust. Any breakdown below 1161 invalidates the above pattern. There is a remote possibility that we go sideways for a bit more before the thrust.

As a triangle typically precede the final move of the wave it is in, we can expect a sharp u-turn once it hits the target.

All the best & watch out for an update after the long weekend. Stay safe!

S&P500 short-term: Triangle in the making

Last post called for sideways corrective action between 1181-1154. Although the range was smaller, we did go sideways. This action is beginning to look like a Triangle in the making (my favourite kind of pattern), and we may be setting up for a push higher late this week or next.

The above hourly chart, shows prices testing & remaining above the maroon uptrendline. This increases its importance, in case of any future break of this line.

Triangle to the rescue

When prices didn't break down in the last session, the immediate suspicion was a triangle. And volume's dropping off too. Notice, how legs A & B are in 3-waves. If you remember the Ellliott Triangle, there's 5 legs A-B-C-D-E, and each leg is a 3-waver. Is leg C done? Possible, as shown by the light pink trendline, forming an ascending triangle. However, for a symmetrical triangle, we could drop down towards the tentative purple trendline to end the C(remaining within range of the maroon uptrendline). Ideally, there would be small D & E waves, before a thrust up. At the moment, looking at a target of around 1195

Depending on whether wave C is done, or in the making, the thrust up could be as soon as next couple of sessions or next week. In any case, these setups are high probability events, and not 100% guaranteed. The Market doeth as it pleaseth! A break below SPX 1161 invalidates the above pattern.

Always glad to spot a triangle, as they are relatively easy to identify, and have a higher probability outcome than most. A triangle here would definitely reduce some confusion.

For other support levels, refer to previous post. All the best folks!

S&P500 short-term: Corrective Action ahead

For the last month or so, every short-term peak had bears shouting "crash". Most of my posts pointed out how a crash is unlikely, merely based on the distance from the lower uptrend channel line (a sign of strength). Well, finally enough steam has been let off, and price is at the original uptrend channel (maroon). While am still not expecting a crash, we could be in a corrective period for a while, followed possibly by another high towards 1220.

Although i ask readers to ignore my wave counts, some might have noticed the latest change. That's right, abandoned the WXY, moved 1-2 down & marked the break of the green line as end of 3, and we're in a wave 4 correction. Please do continue to ignore my counts!

Multiple supports around 1154 (including the tentative channel in red). Followed by 1135 (38% retrace of 3 & neckline of IHS). Although unlikely, any crash will find support near the grey uptrendline (connecting the 870 & 1045 lows)

Very Short-Term

Above is a 5-min chart. Notice the descent from 1181 was in 3-waves. Now, this could be in order of preference:

• 'w' of a w-x-y
• or a simple a-b-c
• or 1-2, i-ii action of a more powerful downmove.

If prices break up thru the red downtrendline, expect a re-test of 1174 or 1181, followed by more sideways action. On a break down, expect initial support at 1154, followed by 1135. Overall, am expecting corrective action between 1181-1154.

Approaching a top

We're definitely fast approaching a significant medium-term top. It will be interesting to observe the depth of the correction that follows, now that price seems to be in a 5th wave up.

Meanwhile, Shanghai broke out nicely today, and still following the plan!

All the best folks! Let's take it one week at a time.

Shanghai Composite Short-Term: A beautiful breakout!

My last post, Shanghai Composite: Following the plan, suggested an Inverse Head & Shoulders in the making, based on volume patterns. Sure enough, a right shoulder was formed, and then... Bam! A beautiful breakout on high volume.  Ahh, the sheer beauty of technical analysis - don't you just love moments like this!

Target

Alright, the rough target of this move works out to be 3200 (already more than halfway there). Fits in very nicely with the wave D limit, based on the upper trendline of the Triangle that's forming over the medium term. See the previous posts on this topic for details.

All the best!