Traditional view:
SPX daily looks very bullish. If a pullback is starting next Monday, 1384.xx - are expected to make a strong support zone because it is a confluence of short and mid terms moving averages together with the upper edge of the Ichimoku Cloud and the Fib50 from the low of 4/23 to the high of 4/27.

Bearish Elliott view (Just a repeat of what I said in the Friday post):
The price seems to make an ideally 5 waves structure of the wave (C) with its value placing between Fib61.8 & 78.6 of the (A)(B)(C) counter trend rally and still opens the possibility to a further and steeper sink to form the wave C of the correction ABC which began from the April 3.

Bullish Elliott view?
The 5 days drop from the April 3 was just a deep pullback and it was not a part of a correction. The rally began from the 4/24 might be the first motive of the five wave pattern up.

Bullish however still opens till Monday the possibility of a resuming of the correction

10.45am
May I say it's safe for bulls because the Spain's downgrade couldn't spook the Europe markets?


Bullish traditional view:
The price made three consecutive up days, it has broken up the short and mid-terms moving averages (9, 20 & 50 days). The price had found a good support from the Fib 78.6 level of the pull back. It also found a strong support from the Ichimoku Cloud. Seemingly it wants to make a Double Bottom.
Some indicators that confirm the bull after the Thursday's close can be mentioned: RSi14 has crossed its MA7 for two days and is backed to the positive territory > 50. Stochastics made a W bottom and crossed up the signal %D5. MACD crossover through the signal line.

Elliott bearish view
The price seems to make an ideally 5 waves structure of the wave (C) with its value placing between Fib61.8 & 78.6 of the (A)(B)(C) counter trend rally and still opens the possibility to a further and steeper sink to form the wave C of the correction ABC began from the April 3.
To support this bearish view the index needs to drop hard by Friday to send the index to about 1380.00 in a single day (Or making almost no progress Friday and sharp drop on Monday).

Day trade
Bulls may buy on consolidation or minor pullback for [1408.60 - 1414.30].
Bears may be looking for a sharp drop to 1380 to initiate a short.

If price continues to go up today, it could be the final push up to form wave (5) of the (C). So, this wave might be limited by the Fib61.8 of the retracement at 1397.40.

9.14am
The risk to short to follow the drop at open (no higher than 1392.76 made before the drop) is the possibility to form wave (4), then a rebound to form wave (5) at a high higher than 1392.76 - This is a perfect wave (C) (the numbering inside the wave (C) is different between my two charts) 
So in this case bears better target not further than 1380.00.

  
SPX
A strong counter trend rally according to the Elliott theory and it could be the final push up to form wave (5) of the (C). So, this wave might be limited by the Fib61.8 of the retracement at 1397.40.

Day trade:
Price continues to go up today: It may be too late to follow?
Price crosses down through 1390.00: It may be a sell for the targets [1376.30 - 1380.00].

A push up will face a hard resistance zone [1376.30 - 1380.00] - it's the intersection/confluence of resistance lines:..

12.00am
Vigorously back inside the bear flag! I don't know how does FOMC statement will affect the next movement of the market besides bull looks very ambitious. I may need to renumbered the EWs and bias more on bulls for higher high.


Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312.xx. This call subjected to nullification if bulls win 1422.38.

I am not satisfy with my Tuesday call "A bounce would be limited by [1372.30 -1374.30] and I consider it as a good chance to sell". It made only 4 points on the pullback from 1372.30 to 1368.30. It is the wave (4) as I marked on the chart. And as the price evolution and Elliott waves showed it should be considered as day trades only. A short at wave (3) and keeping overnight will face a risk by the wave (5).

Seems that bulls will try another push up? That if happens will form wave (5) of the bounce began from April 23 and it will face a hard resistance zone [1376.30 - 1380.00] - it's the intersection/confluence of resistance lines: The lower line of the bear flag, the descending line connecting heights of April 17 & 19, The  lower line of Andrew's Pitchfork, and the Fibonacci 61.8% of the April 23' low and April 17' high.

Trading:
Depending on how markets open, wave (5) followers may play the upside with a note in mind that W5 is normally shorter than W3.
It may be a better chance to short if [1376.30 - 1380.00] is respected.
In case of a sharp drop at open, I will watch [1357.60 - 1361.00] for supports.

A bounce would be limited by [1372.30 -1374.30] and I consider it as a good chance to sell. A further drop is expected and might find a short term support at [1350.00 - 1354.00].

Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312.xx. This call subjected to nullification if bulls win 1422.38.

EURUSD sold off Monday and couldn't make a noticeable bounce today, so the Diamond Bottom I suggested failed. That would negatively affect US markets.

SPX: The bear flag model came to maturity Monday and the sharp price fall was a confirmation. Talking the Elliott wave, the pullback from the high of Friday (4/20/2012) and fueled by a sharp fall Mondays looks as a beginning of the Wave 3 of the Correction Wave C (of the correction ABC).

Trading: A bounce would be limited by [1372.30 -1374.30] and I consider it as a good chance to sell.
A further drop is expected and might find a short term support at [1350.00 - 1354.00].

EURUSD might continue its bouncing up after a minor pullback or a consolidation

Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312.xx. This call subjected to nullification if bulls win 1422.38.


You may like my call 1.3225 for the EUR/USD early Friday when it still was 1.31832:

You also may like my call at 11.02am "SPX rebound target met, EURUSD pullback from 1.3225 Descending Wedge target. It's time to short".
If you shorted there when SPX at 1386.00 and covered near the close at about 1379.00, your gain was 7 points or 0.5%.

I expect that EURUSD might continue its bouncing up after a minor pullback or a consolidation. That in combination with the US upbeat earnings would be extending the support to bulls.

A negative look of the SPX is a bearish flag forming and it is in well agreement with a possibility of a double zigzag formation implying a bearish outlook beyond a week, however a continuous zigzag and ranging within few days.

For the next Monday, I suggest that SPX will move within the support zone [1372.30 -1374.30] and the resistance zone [1386.40 -1389.50].

A thing that makes me confused is that EURUSD seems broken out the Diamond Bottoms. That if successfully will favor US-bulls on its way to target 1.3343.

11.02am
SPX rebound target met, EURUSD pullback from 1.3225 Descending Wedge target.
It's time to short.
~~~~~~~~~~~~~~~~~
Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312.xx. This call subjected to nullification if bulls win 1422.38.

I like to quote my update at 10.34am Thursday:
"If Bulls can not pay a visit to 1395.00, I think it is a sign of weakness! Moreover, if SPX closed in read, it would be a warning sign for bulls and a green sign for bears."

For Friday I remain my short-term bearish outlook for the market and my trading may tend to short at bounce.
My evaluating resistance zone [1386.40 -1389.50] and support zone [1363.50 - 1366.50].

However there a thing that makes me confused is that EURUSD seems broken out the Diamond Bottoms. That if successfully will favor US-bulls on its way to target 1.3343.

For a shorter term of EURUSD, my evaluation target for a break out of the Descending Wedge is 1.3225, so bears would better pay attention/caution!

A rebound if happening might target 1395.00 - 1397.60

10.34am
If Bulls can not pay a visit to 1395.00, I think it is a sign of weakness! Moreover, if SPX closed in read, it would be a warning sign for bulls and a green sign for bears.


Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312.xx. This call subjected to nullification if bulls win 1422.38.


I think you like my call Wednesday: "Bulls look ambitious and I think a modest pullback Wednesday if any would be a buying chance. I prefer a pullback that respects zone 1383.00 - 1386.00."


For Thursday, the drawing of the Continuation Wedge (Bearish) may find a new look.
A rebound if happening might target 1395.00 - 1397.60.
A pullback if happening would find a support at 1378.30.

The broken of the upper line of the Continuation Wedge (Bearish) also invalidates an immediate call for a drop.

Maintain my call for a mid-term correction with a possible duration 4-8 weeks and a probable target 1312 . This call subjected to nullification if bulls win 1422.38.

The short term is very bullish and we might see bulls win the 1397.60 before next possible attempt to challenge the 1407.00.

I said Tuesday "the rebound if any will be limited by zone 1390.00 - 1397.60". It was to understand the call in the day contexts and it was proved perfect when the index spent more than half day staying above 1390.00. The broken of the upper line of the Continuation Wedge (Bearish) also invalidates an immediate call for a drop.

Bulls look ambitious and I think a modest pullback Wednesday if any would be a buying chance.
I prefer a pullback that respects zone 1383.00 - 1386.00.

What we see after last 4 days? The two days pushed down was not strong enough to repay what the two day rebounded made (unable to make a lower low)!

Maintain my call for a mid-term correction with duration may extend 4-8 weeks and the target may be 1312 .
What we see after last 4 days? The two days pushed down was not strong enough to repay what the two day rebounded made (unable to make a lower low)! That's why we might see a rebound that keep the index in green today.
One support to a rebound is EUR/USD might targeting 1.3179 if it follow the descending broadening wedge. Another support comes from a big bounce of the Europe markets at the moment. And last is that markets are not always simple and easy to most of players.

Seems that SPX is in the forming of a Continuation Wedge (Bearish) that favours high odds to resolve the price to the down side.
I expect that the rebound if any will be limited by zone 1390.00 - 1397.60.

A head-and-shoulders pattern seems to be in the forming.

Maintain my call for a mid-term correction (with duration adjusted to 4-8 weeks from the old value 6-8 weeks), (The down target is adjusted to 1312 from the old value 1290).
There are two scenarios for the movement of the index next Monday with a head-and-shoulders pattern seems to be in the forming.
1) A further fall to the 1359.00 - 1362.00 supports.
2) A rebound to the 1375.50 - 1378.50 resistances before a drop to resume.

Maintain my call for a mid-term correction (6-8 weeks) and a short-term up (a week max).

Maintain my call for a mid-term correction (6-8 weeks) and a short-term up (a week max).
The down target that I can figure out is 1290 and can be adjusted latter.
The short-term up targets: [1372.50 - 1374.60] - got yesterday,
[1382.50 - 1386.00] - can bulls get it today? Seems the SPX future supports a continuous rebound. That would agree with a bull flag pattern in the 15min chart.
[1390.00 - 1397.50] - wait and see.

Bull flag that favor continuous rebound?

We are in the correction phase with mid-term target may be 1390 (Typo error, must be 1290)

12.12pm
1374.60 works out amazingly.

With yesterday sell-off that sent SPX down below the MA50, with the final rising trend line (blue) initiated from the 10/4/11- Low was not respected and -DI crossed up +DI for 2days... I can be confidently say that we are in the correction phase.
The correction also agrees with (practically is the inevitable result of) the Rising Wedge Pattern and the Elliott Diagonal Pattern.

For a very short term of few days ahead, bulls may enjoy a rebound, however I think chances are better for bears to short at appropriate resistances.
It's early to say but I think if bulls want to challenge the [1393.80 - 1397.50] zone, I will short over there  with my high confidence/leverage.

In case of a rebound, where I watch for resistances?

12.53pm
Got burned by FAS but AGQ, GDX and NUGT may save me. This market may call for fly to safety.
AGQ inverted Head & Shoulders?

I posted yesterday updates hinting about a rebound. I would better figure out the resistances of the rebound if it is about to happen today.
I think the 1st resistance would be 1393.00, then if bulls are strong enough they will face a hard resistance zone [1400 - 1403] by next day.
If no rebound today, bulls would be desperate.

A bounce may happen from 1398 or a bit lower, however I suspect that the duration and the size of the bounce would be less than the previous

12.11pm
My stock pick FAS, AGQ, GDX.

12.05pm
Look like a mini double bottoms pattern is forming.

6.45am
With SPX E-mini continues it's ugly look at 1375 at this moment, I would like to adjust the bears target down to [1371.50 - 1381.00].
A sharp drop at open will confirm that the 1422.38 is the EW5/3/3/3/3 Diagonals Pattern Termination and we may now witness a correction.

It's a warning sign when price breachs the lower rising trend line.
A bounce is expected at this point, however I would like to place a question mark to the duration and the size of it when it is to happen from below the lower rising trend line.

The hourly chart also hints a bounce next Monday, however I would like to pay attention to the descending cap line on MACD which is displaying a negative divergence.

Trading:
If no sharp drop seen at open (sharp drop = big gap > 0.50%) then there may be a trade-able bottom for a bounce. Buy breakout 1401.60. Stop-loss breakdown 1393.00. Bounce targets [1408 - 1410] or two days or a contact with descending cap line on MACD, whichever comes first.
If a sharp drop seen at open or 1393 doesn't hold, I would like to short and my target will be 1386.87.

The bounce must happen today and >0.5% for a healthy bullish market. If the bouce to happen after 3 down days from below the trend line, things would be different.

12.16pm
Bulls look too weak!

11.30am

Adding the 4th scenario: If SPX close above 1401.50, but less than 1405, I expect a next green day, however that bull is considered weak.

I think today is a very important day for the markets.

The bounce must happen today and >0.5% for a healthy bullish market. If the bouce to happen after 3 down days from below the trend line, things would be different.

Taking into consideration of many factors: The duration of our bullish market since 10/4/2011, the gain of this bullish rally, indicators reading, EUR/USD and Europe markets behavior..., it seems to me that a topping process is in the forming.
I would like to present my 3 scenarios for the SPX:
1. If bulls can camp at [1405 -1407] zone today, they are sure to be able to advance one more day at least.
2. If bulls stay in the [1395-1398] zone today, markets will be in indecision mode.
3. If bears can push the index lower to the [1391 - 1389] zone today, the bull-party is over and any bounce would be a short.

[1395.00 - 1397.30] may represent a strong support zone for bulls

13.45pm
Double bottoms at 1394.40 looks in the forming. Buy signal officially triggered.


12.15pm
1395 has been respected for almost 3 hours, it is almost buy signal triggered for me. 

Can we explain the deep of the yesterday's pullback as "Fed dashes stimulus hopes"?

No! I would better link it to the high volatility of April. If I got a better awareness of this, I would have given bears more credit than I did. I propose that I will do it differently for the rest of April.

For today, I expect that [1395.00 - 1397.30] will represent a strong support zone for bulls because it is the confluence of 3 rising trend lines: Medium, short and shorter terms.

If the index can make a bounce, my favorite bullish scenario is that price could be confined by the slightly-rising channel (yellow lines). 

If [1395.00 - 1397.30] support zone fails, bears may target 1391.20.

We may see some kind of spook game at open today, however I expect that bulls will do what they need to do to retest the target zone [1422-1428].

11.50am
I have underestimated the power of bears. We can see the close in red today and bulls have to postpone their re-visit to [1422-1428]. 

Yesterday was a perfect action of buy on dips to show the bull-market is healthy. All those who scared and ran away from the dips for the first 35min would have a big regret. My bullish target zone [1422-1428] got an early try at 1422.38.
We may see some kind of spook game at open today, however I expect that bulls will do what they need to do to retest the target zone [1422-1428].

What next if we see a retest of the target [1422-1428]?
I think the profit lock in would represent a notable pressure on the momentum of the market and I expect to see a small chance for nimble bears and a bigger chance for bulls.