Traders' Library Blog

Stocata S&P 500 Analysis: February 27, 2016.

A week ago I wrote: "The 1910 first target I mentioned last week was reached and the index closes the week at 1917. Most probably there will be a further up correction creating an extended wave 2 (E2) up to a level of 2000. This is a price resistance, the upper side of the volatility band, the 100 day average active resistance and close to the 200 day average resistance. This would then be the end of a longer term Elliot wave 4 correction, followed by a continuation of  the long term down move, to finish the first long term impulse wave down (Elliott wave 5). As always there is an alternative, resuming the long term down move already now. I believe there is only a very small chance that this will happen."

Last week I mentioned: "As always there is an alternative, resuming the long term down move already now. I believe there is only a very small chance that this will happen." And yes this did not happen. Rather as expected the up correction continued further creating the longer term Elliott correction wave 4. We have already an extended correction wave E2 now. I have to repeat what I wrote last week: most probably there will be a further correction up to a level of 2000. This is a price resistance, the upper side of the volatility band and the 100 day average active resistance. This would end the longer term Elliot wave 4 upward retracement, followed by a continuation of  the long term down move, to finish the first long term impulse wave down (Elliott wave 5). We must keep in mind that the down continuation may come faster than we think.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: February 20, 2016.

A week ago I wrote: "The index reached already two expected targets. The level of the first target mentioned last week at 1840 and there is already a valid wave 3.3 down. This is most probably the end of an Elliott impulse wave 3. In that case we should expect a correction wave (Elliott wave 4), finally followed by a wave 5 down to a first target of 1780. Targets for the correction move up are price resistance around 1910, a Fibonacci target, the upper side of the BBS channel and the upper side of the downward moving pitchfork. I expect a maximum retracement between 1960 and 2000. I would advice not to go long, assuming this is just a correction for the long term move down."

The 1910 first target I mentioned last week was reached and the index closes the week at 1917. Most probably there will be a further up correction creating an extended wave 2 (E2) up to a level of 2000. This is a price resistance, the upper side of the volatility band, the 100 day average active resistance and close to the 200 day average resistance. This would then be the end of a longer term Elliot wave 4 correction, followed by a continuation of  the long term down move, to finish the first long term impulse wave down (Elliott wave 5). As always there is an alternative, resuming the long term down move already now. I believe there is only a very small chance that this will happen.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: February 13, 2016.

A week ago I wrote: "Last week I wrote: "There is little room for a small further up move, but we should expect the coming week(s) a continuation of the move down for a wave 3.3 down." On Monday there was the small further up correction, finishing the day with a doji candle and a bearish harami (cross). This reversal was confirmed on Tuesday with a large black candle. After some recovery, Friday closed at 1880. The index and the stochastic RSI show a hidden divergence with lower tops in the index and higher tops in the indicator. As a result we should expect a continuation of the down move. This will possibly be a 5-impulse wave for the creation of wave 3.3 down. First targets are 1840 and 1780."

The index reached already two expected targets. The level of the first target mentioned last week at 1840 and there is already a valid wave 3.3 down. This is most probably the end of an Elliott impulse wave 3. In that case we should expect a correction wave (Elliott wave 4), finally followed by a wave 5 down to a first target of 1780. Targets for the correction move up are price resistance around 1910, a Fibonacci target, the upper side of the BBS channel and the upper side of the downward moving pitchfork. I expect a maximum retracement from 1960 to 2000. I would advice not to go long, assuming this is just a correction for the long term move down.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: February 6, 2016.

A week ago I wrote: "As I mentioned last week: "It looks like there is more room for a further up retracement. Probably to the level of the S2 pivot resistance." This was also the level of a 50% retracement of the wave 3.2 down and the resistance of a previous gap in the index. And yes this was the point reached the past week. There is little room for a small further up move, but we should expect the coming week(s) a continuation of the move down for a wave 3.3 down. First target is 1740. The index and Stochastic RSI are building a hidden divergence with lower tops in the index and higher tops in the indicator. Generally this means we must expect a continuation of the move down once the correction wave 2 is completed. "

Last week I wrote: "There is little room for a small further up move, but we should expect the coming week(s) a continuation of the move down for a wave 3.3 down." On Monday there was the small further up correction, finishing the day with a doji candle and a bearish harami (cross). This reversal was confirmed on Tuesday with a large black candle. After some recovery, Friday closed at 1880. The index and the stochastic RSI show a hidden divergence with lower tops in the index and higher tops in the indicator. As a result we should expect a continuation of the down move. This will possibly be a 5-impulse wave for the creation of wave 3.3 down. First targets are 1840 and 1780.

Sylvain Vervoort   Stocata.Org