Change-In-Trend

with Anthony, ZigZag & Platy

S&P500 Downside Target Reached & Gold Update

Yesterday in my comments i said “Look for a potential low in the 1313-1315 area today before moving up into 31 May – 1 June high“. The S&P500 closed at 13.32 with a low at 1311.

I now think we are ready for the final assault into an important high and the completion of mini wave 5 and minor wave 4, before moving down into minor wave 5 and major wave 4 completion, meaning that we have 1 last set of 5 before this market rolls over hard in a time frame from November 2012 – February 2013. Ofcourse this window of opportunity will become narrower as time progresses.

The attached chart of the S&P500 shows a few things so lets address each one in turn.

Wave Structure

The current wave structure is showing that we have only completed 4 major waves in this set and are in the process of completing minor wave 4 before we move down likely into mid June possibly around the FOMC meeting. At this meeting i am expecting QE3 to be announced at which point the market will rally for the next 5-8 months. This will be potentially be a period when commodities begin to accelerate the most as price inflation in fuel, clothing and food begins to take its toll on the unemployed, manufacturing and heavy industries. During this 5-8 months professionals will raise prices in an attempt to lure in retail players by creating demand. Later in the year there will be more news that the recovery is continuing and the Fed have adverted another disaster at which point we will begin our roll over into the deepest part of this recession.

Fibonacci

I have drawn the 50% retracement from the May high to May low. Often you will find that important turning points fall just short of important technical areas. The reason for this is because professionals know that retail players have been trained to trade in a particular way and are looking for certain signs. Professionals can use this for their gain. A lemming may be looking for a ledge half way down the cliff face.

Tudela’s Technical Take Out

Measured moves are one of my most favourite techniques for pinpointing precise targets. The distance from minor wave 1-2 has been projected from the minor wave 3 low creating  a projection to the upside in the region of 1348-1351, this is also backed up by geometric support/resistance shown by the purple line. It just so happens that it falls nicely below that retail 50%.

I have also utilized a Gann fan from the March top. The principal behind the Gann fan is that 1 unit in price = 1 unit in time. This is represented by a 45deg line. Therefore if you divide this fan in equal measures it is able to forecast price at a particular point in time, at least that is the theory. You can see that one of the Gann fan lines is directly in conjunction with both the measured move line and also the geometrical support resistance line (purple). Great, so what does it mean, well it means that both price and time are proportionally aligned, when this occurs its increases the odds of a change in trend.

A quick look at the volatility bands is indicating that there is indeed more room to the upside, given the target it is safe to say that we will have 2 positive days up into the target zone outlined above.

A quick look at gold, some of you would have read my analysis from earlier this week https://changeintrend.wordpress.com/2012/05/27/special-report-gold/.It looks like today we completed that mini wave 4 down and now looking for that mini wave 5 leg up, into minor wave 4 same wave structure as equities. 

Ill be addressing downside targets in equities and gold as the next couple of days unfold, most likely in a report over the weekend. With 2 days of upside in equities expected  its likely that we will hit the upside target of 1348-1351 intraday on Friday afternoon, so ill stay awake for this one. Being in Australia i sleep all through the US sessions, lol.

Anthony

 

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16 comments on “S&P500 Downside Target Reached & Gold Update

  1. Jason
    June 1, 2012

    Hi Anthony,
    If you wake up before the market closes, could you give us your quick take on tomorrow? Has anything changed since we hit the bottom of your volatility bands? It would sure help in making decisions before the close.
    Thanks,
    Jason

    • Anthony Tudela
      June 1, 2012

      Jason

      Im still looking for a spike up. However the time frame may be pushed out + 1-2 days.

      Im looking at a potential cycle inversion and will post an update later.

      Anthony

    • Anthony Tudela
      June 1, 2012

      Jason

      im very pleased that you are using the volatility bands, well done.

  2. Maggi
    June 1, 2012

    market is very week today-31 May 2012, it seems the target -1348 wont be reach within the time frame. The last high 1332 seems to be the high…now, it seems we have to wait for the low…:-).

  3. jwdchan
    June 1, 2012

    Hi Anthony

    Great charts with lot of detail and your goal, but wondering if you still sticking with it after this morning panic drop to new low this week, that we going to bounce to 1348-1351 by tomorrow? or have the dates been push now to next week?

    Thanks!

  4. johnrr
    May 31, 2012

    thank you for everything

  5. JParker
    May 31, 2012

    Us data just released is just not strong enough to spark a 30 point rally IMO. 1324 maybe possible.

    • Anthony Tudela
      June 1, 2012

      JParker the target will be amended and represented in todays post

      Anthony

  6. Anthony Tudela
    May 31, 2012

    Thanks Rezito, glad to have you here.

  7. Rezito
    May 31, 2012

    Anthony
    I really appreciate your site. I’ve been reading this blog for a week now and I like your approach.

  8. Jason
    May 31, 2012

    Hi Anthony,

    Just wanted to say thanks once again for your analysis. Your educational take to your blog is extremely helpful and informative, and I really appreciate the time you put into it.
    Jason

    • Anthony Tudela
      May 31, 2012

      Jason, no problem.

      Its all about making profits and using them for a respectful means.

      If i can help myself and my readers to do more good with their money then i’ve achieved something.

      Anthony

  9. JParker
    May 31, 2012

    Anthony I am really enjoying your analysis. Would we have to take out 1291 on the downside to negate your wave iv upside targets? 1348 feels like a tall order.

    • Anthony Tudela
      May 31, 2012

      Thanks JParker glad you are enjoying it.

      The Australian markets are down as expected today. The way this works is that we wont see any movement probably until after the market closes, so that would mean news out of Europe due to the timing difference could be a market mover pre Wall St opening bell.

      Yes that would have to be taken out, but it wont, this market will surprise to the upside first.

  10. stock0711
    May 31, 2012

    sleep,Good Luck!

  11. stock0711
    May 31, 2012

    Thanks Excellent roadmap,Get some GL

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