Dow Jones and SPX retraced 61.8% the May lows, and paused 6-24-2012

Over the past decline, a total of 10.5% was shed from U.S. Markets, and up to 15% from Asian Markets. We noted that 12710 was the initial resistance, and the market stayed above for 2 days reaching 12850 at close for the DOW. The decline last Thursday was a huge 2%, that was an expected pause for the ff reasons:

1. SPX has the 1262 major resistance.
2. both SPX and DOW retraced the 61.8% of its entire decline.
3. re-adjusted the possible downtrend line for DOW and SPX has been noted down. and 12850 was a resistance and 1365 for SPX.
4. Germany also bumped into its downtrend resistance at 6450.

In Elliot wave count, we still count the decline as possible correction only, we temporary label it as Minor wave ii of Intermediate 3 of Primary Wave III. A fall back below to 12100 destroys this count.

Overall, its still uptrend biased, as possible uptrend formation trendline is formed shown in SPX chart. there is still 1-2% risk, and no more than than should be entertained to keep this market uptrend even for a short while.

Markets should soon be back to that 61.8% retracement (12850 and 1265), and break out through the downtrend lines, to revisit our 52 week highs.


Market: Short term: uptrend and chances are high for possible turnaround.
Short-term to Medium term: Downtrend, due to downtrend lines.
Medium Term: Uptrend still intact