SPX, DOW and Nasdaq survived the breakdown threat and reverses the loses with at 1.6% rally last Friday. The world is safe again - for now.
Looking at the price reaction, we are hoping that another leg up could possibly under way, and the false breakdown to 1325 SPX may just be a trap - for now.
Elliot wave analysis suggests that in a Bull Market, waves are composed of 5 waves up, wether frames are small or big. In this case, we are hoping that minute wave iii of Minor Wave 3 could possibly underway back to 1375 or higher, then a pull back before ending Minor Wave 3 with minute wave v possibly near 2 yr high.
We are still have to defend the Critical 1334 Support of SPX.
Short Term: Correction may have ended, Rally to 1365 resistance highly coming into the next trading days. May bump into that strong downtrend resistance.
Medium Term: Downtrend channel still intact at 1365 Major Resistance.
Long Term:SPX uptrend still intact at 1265.
My Personal Trade: Looking to exit at 1365, and no long investment on Equities for the year, until GDP and Unemployment of Europe stabilizes into Positive Territory.
Source: TradingEconomics.com
Q2 was actually a bad month for GDP all across the Globe, China GDP at only 7.6% growth, and then, once there was Singapore and Malaysia shining, acting as relocation sites of U.S. based companies and central hub of Asia, now they are in need of huge jump in terms of growth, as their GDP tumbles to negative territory, Singapore Contracted 0.9% for Q2 2012, and Malaysia contracted 3.2%. Another tumble for Q3 will make this countries into Recession. An unexpected one for these Emerging Asian Markets.
Economic Calendars to look forward into:
July 18 - U.K. Unemployment Numbers
July 24 - Germany GDP
August 14 - Europe GDPs
Source: Scotiabank
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