Bull expected to challenge the area 1396.30-1405.00

It seems that yesterday's low marked the end of wave-4. To confirm this, price need to bounce today and print a higher value than 1391.74.
In this scenario, I expect price will make a wave-5 in the area 1396.30-1405.00.
(Wave-4 also can be somewhere below the value 1381.37 in the area 1376.36-1381.37. To make this, price need to pullback into the area and bounce up higher than 1391.74. In this scenario, price is expected to make wave-5 somewhere between 1392.00 and 1404.64).

My trading plan
I see Silver is making new highs meanwhile Gold, Crude and EUR/USD are trying to test the recent highs.
If I scare the highs, I would better stay sideline. I definitely will not short this market until the US and European Central Bankers announce their solutions this Wednesday and Thursday. To short this market based on expectation that Central Bankers will disappoint markets is very risky to me. 

A pullback may be a buy

Wave-3 of the rise from 1329.24 may have been finished at 1389.19 when it hit against the 78.6% retracement of the fall from 1422.38 to 1266.74. We need to see a pullback to form wave-4 on Monday 7/30 to confirm the scenario. 
A pullback if any would find support in the area 1374.78-1380.29, this area if not holds may call the next support at 1370.34.

My trade setting
I will not chase the rise if market opens in green.
I would be from hardly to not open a short to follow a pullback at market's open because I suspect the pullback would be shallow.
If my feeling of "pullback then bounce" is consolidated, I would buy when supports hold and expect a wave-5 termination at somewhere around 1395.50- 1304.64.
Medium term update
http://cyclestockmarketwinner.blogspot.com/p/spx-medium-term.html

May be a small up then a small down

Look like a 5-waves pattern is revealing for the bounce from 1329.24 to 1363.13 (may be 1363.13 +... by the rise today).
On the upside, 1369.44 could be next target of bulls but not necessarily today.
On the downside, bulls will be safe if 1354.82 holds.
If 1351.48 breaks down, further dips will follow.

A bounce would face area 1350.12-1352.85, if successfully breaks out will target area 1359.30-1363.00

A bounce would face area 1350.12-1352.85, if successfully breaks out will target area 1359.30-1363.00.
A dip will seek a support in the area 1327.70-1329.24 and the next at 1326.20.

Attention!
In a dip case, if 1329.24 couldn't hold, the bounce a-b-c was done with c at 1343.77 and the index should be down further to make wave iii. If 1329.24 holds, the index may bounce up to make a wave ii in a form of a double zigzag pattern.

A bounce is imminent

Seems that the decline from 1380.39 to 1329.24 is a 5-waves pattern. If it's correct and be named wave i, it's time to expect a bounce to make wave ii.
I see a new price channel (yellow) that formed by connecting 1374.81 with 1380.39 and 1325.41 with 1329.24. The channel also favors a bounce.
A bounce to make wave ii could be short-lived and target somewhere between 1350.12-1363.00.
If the market decides to make a triple zigzag (another ABC after 1329.24), the target of the bounce could be higher at about 1385.00.

A drop may find a support in the area 1346.45-1348.00

A drop may find a support in the area 1346.45-1348.00 which is the lower-line of the mini rising channel and Fib 61.8%. Next support area will be 1337.30-1340.30.
A rise would face resistance in the area 1352.90-1355.00. Next resistance area will be 1359.42-1362.60.

A rising channel is seen in the hourly chart

A small rebound may be seen at 1350.60-1353.00

1344.56 may be a target for short term and a small rebound may be seen at 1350.60-1353.00.
Next bear target would be 1326.20 before a better rebound could be seen.

SPX daily indicators
Look shifting from bulls to bears.

A pullback if any may find a support in the area 1356.78-1357.80

7/19/2012 
I am out on holiday and will be back on Monday 7/23.
~~~~~~~~~~~~~

A pullback if any may find a support in the area 1356.78-1357.80, if broken will find 1355.00 next above a solid 1353.00.
A continuous rally would target 1366.50 if successful will target next 1373.00.
A new small rising wedge found inside a bigger one. They are generally bearish, however seems Mr. Market doesn't care these days.

Bull may target the area 1363.00-1364.84

Because of a relief pullback happened early before the area 1363.00-1364.30 and price bounced when found an intraday support at 1344.60-1349.80, the next move may be upward.

A continuous bounce for today would target 1363.00-1364.84.

A pullback, if any would find a support in the area 1348.51-1349.83.

Long signal upon 1356.78 up, target 1363.00-1364.84.

Short signal upon 1348.51 down, target 1345.00. 

A pullback may be seen at 1363.00-1364.30 before bulls could go higher

Bulls look strong. A continuous advance next Monday may be, however would face a profit taking pressure at 1363.00-1364.30.
A pullback if any would find dip buyers at 1344.60-1349.80.

The hourly chart looks in favor of bulls for short term. Bears eventually however may win to defend 1389.07.

Bears need to defend 1343.47 to maintain the fall from 1374.81 impulsive

The yesterday's bounce from 1325.41 was a bit strong that made a price overlap and because of this, I think wave iii was not seen.

The yesterday's low at 1325.41 seems just the end of the first wave i within wave (3). We may be in wave ii and we might see its final stages within the anticipating channel (yellow). I expect wave ii to end somewhere below 1343.47. 

With this reading the bounce from yesterday's low 1325.41 would end at around 1343.47 before a resumption of decline to form wave iii of (3).

SPX daily indicators 
4/4 indicators has confirmed a down trend. 

I expect to see the lower line of the Rising Wedge broken down today and an accelerated fall to follow

10.40 am update
Market can't be more bearish than this:
1. Break down the lower line of the Rising Wedge (purple) plus
2. Break down the lower line of the Falling Wedge (white)
A small hope for bulls is a consolidation at 1326.20, the 38.2% Fib.
To me however this 1326.20 will be broken eventually, maybe not today but tomorrow

~~~~~~~~~~~~
When I watched more closely into the 15min chart, I found that the price evolution from 1374.81 to 1346.65 can be counted as a 5-wave impulsive pattern which finished impulsive wave (1). After 1346.65, I see a clear a-b-c corrective to form wave (2). This slightly changes from my chart posted yesterday.
As noted in the chart today, we may be in the wave iii within wave (3). The important thing to remember is "three" within/of/inside "three" is the most sorrowful/excited stage of market action.
If wave iii is the case (I need to see a lower-low than 1333.25 and a red-day today), I expect it to end at around 1303.xx meanwhile the mother wave (3) would end at around 1287.xx.

SPX daily indicators 
3/4 indicators confirmed a down trend began. MACD needs a red day today to confirm. After MACD bearish crossover happens, we may be staying in bear market for months.
Visitors my like to have a look at the tab "SPX Medium Term" of this blog.

We are back to Bearish Market is more than 50% confirmed

Why?
1. Price failed to make the fifth contact with the upper line of the Symmetrical-Broadening Top, instead it made a break down the lower line at this contact.
2. Price closes the day back below the 50% retracement of the fall from 1422.38 down to 1266.74 assuming that 1374.81 was the end of the counter-trend rally from 1266.74.
3. Price was getting back below the sub-medium-term line connecting 1414.48 to 1363.46 (violet).
4. Price failed to make a fifth contact with the upper line of the Rising Wedge after the high 1374.81, instead it is heading down to the lower line. Once the lower line of the RW is broken the fall will be accelerated.
What would be the target of this fall?
I have to re-label the previous abc to (1) (2) and i respectively.
Elliott wave believers may label the fall after 1361.54 of Tuesday's high as wave iii inside the wave (3)  which is underway. I expect this wave iii ended around 1290.00-1303.47.
The final target of the 5 waves structure down from 1374.81 can be lower than 1266.74.

When 1344.56 holds, bulls still have chances to go up to 1374.81 as the first target

1344.56 - It is the confluence of fib50 from 1422.38 to 1266.74,  the sub-medium-term line connecting 1414.48 to 1363.46 (violet) and the lower line of the symmetrical broadening top I told in the last post.
When 1344.56 holds, bulls still have chances to go up to 1374.81 as the first target.
If price drops below 1344.56, the first downward target would be 1329.xx.

A fifth contact with the higher band of a symmetrical broadening top may be?

With Friday's deep pullback, I think the 5 wave pattern had finished at 1374.81. The price got a bounce at 1348.03 when it made a contact with the sub-medium-term line connecting 1414.48 and 1363.46 (violet) now acting as a support. It is more comfortable to me to count the price action after 1374.81 to 1348.03 and Friday's close as an abc 3 wave pattern after a 5 wave up from 1309.27. This abc is the premise for the counter-trend rally since 6/4/2012 to be called double zigzag if price can make a 5 wave pattern up in next few days. 
The bullish final stage count as above might be well invalidated if price closes next Monday below 1344.56.

Another argument which favors a bullish scenario next few days is a symmetrical broadening top which was confirmed by price contact with lower band before the Friday's intraday-bounce. Those who believes this pattern should expect the fifth contact with the higher band next.
However if Mr. Market decides to go down next Monday and he lets bears win 1344.56, I think I would better favor bears to 1326.20 or lower. 

EUR/USD Medium Term

The EUR/USD pair broke down a bear flag on Thursday 7/5/12 and the Friday's follow-through fall confirmed the pattern and hinted that we will see further falling ahead.

A rebound after 6 consecutive down days is likely to be seen (However not necessarily!). The rebound if any will favor stock markets in short term.

Those who believe the Head & Shoulders Pattern likely believe that 1.1360 would be the target of this fall. On my evaluation, the fall may end at about the 1st week of September 2012. 

The falling of the pair EUR/USD will be no good for stock markets at all.

(One of my old posts on EUR/USD Head & Shoulders topic can be found at http://cyclestockmarketwinner.blogspot.com/2011/11/hope-of-rebound-becomes-dimmer_22.html)

For the target 1385.xx-1389.07, bulls need to defend 1360.50

10.50am update
If 1351.40 holds, I expect next 3 trading days will be bullish. 


SPX 30min
The yesterday's low was 1363.02. Seems that W(3) was at 1374.81 but not 1366.35. If that is the case, we are seeing the formation of W(4).
I expect that the area 1363.02-1360.50 will hold well and bulls can make it's W5 at 1385.xx-1389.07.
However, if 1360.50 cannot hold, 1351.40 would be the target of bears and the bullish picture may be threatened.

SPX hourly

1381.00 or 1386.xx?

I expect bulls will get ambition to test the upper line of the rising wedge to have a perfect W5 finishing in case W4 was in at 1355.70. The target in this case is about 1381.00.
If we see today a pullback to 1360.50, then may be W4 is there and probably W5 will push price up to 1386.xx.

I care 1354.xx and 1380.xx

11.02am Update
Seems to me that there will be no pullback today. It's very likely that W(4) had already been at 1355.70 as I put question mark in the chart. If it's the case, bull will challenge 1381.56 in next 2 days.


SPX 30min
I expect that the upward counter-trend rally is not over yet when 1380.xx is still ahead.
I still expecting to see a clearer formation of wave (4) of the rally from 1309.27 if I can count this rally as a 5 waves mode.
Let's see whether W(4) can be somewhere around 1354.xx or it had already been at 1355.70.
All together, I expect to see a reasonable pullback to buy.