SP/MIB: where do we go – hypo 2
Source: http://www.g2trader.com/index.php?option=com_contentview=articleid=58:sapmib-where-do-we-go-hypo-2catid=1:elliott-wave-theoryItemid=6Posted on Saturday, December 20th, 2008 | In Market Commentary
Something very strange has happened last week, with the index inside a deep congestion, featuring very low volatility.
Now, only 4 trading sessions are available untill the end of 2008, and Elliott Wave counting is really a mess: I try to change it, naming it “hypothesis 2″. For this purpose, I need two charts: daily chart (in white) and hourly chart (in black).
As you can see from the daily chart, wave 3 of (5) has ended at 18628 on 18th of October, setup date. Then, S&P/MIB has developed a new corrective wave, labeled with “4 of (5)” in daily chart and in hourly chart. From that top, index has come down to 18533 with a wave that looks impulsive, especially in hourly chart, but now there comes the problems. Next 3 waves a-b-c starting from 18533 look corrective, not impulsive, especially if you look at the hourly chart. I suppose that this was a correction of last impulse down, and in this case I suppose that final target of this bear market is deeply down: at least 15.500 as first target, and second target is even more deep. This is only a tentative scenario, even though very bearish, that is invalidated only with index above 23.000. Main resistances are 19.886 (previous top, end of wave c in hourly chart), 20.200 and 21.000. The former descending channel, acting as a resistance, is passing through these last two levels. Break of 18.600 would be a confirmation of this bearish model.
Setup dates are 19th of December (last three witches Friday), 6th and 16th of January. Remember that there is a tolerance of more or less one trading session.
Merry XMas and Happy New Year to everybody!
This work is licensed under Creative Commons License.Last 5 posts by Graziano Nanetti
- SP/MIB: go down, nice and slow ... - February 17th, 2009
- SP/MIB: the nightmare will go on - January 24th, 2009
- SP/MIB and Bradley Siderograph: did it work this year? - December 14th, 2008
- SP500: bull trapped? - December 6th, 2008
- Financial Markets Open on Sunday! - November 30th, 2008
Graziano Nanetti is an independent analyst and has years of experience in technical analysis for stocks and indexes. G Squared is born from an idea of Graziano Luciano and Graziano Nanetti, founders of G Squared.
Previously, Graziano Nanetti was the author of the financial blog RNE Trading. His blog expanded to include more detailed contents about markets and to publish the great material he received from Graziano Luciano.
Now, G Squared is aimed at pubblishing open minded financial articles about few major indexes (S&P500, S&P/MIB, Nasdaq100) belonging to financial international markets.
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