Technicals | Jan 27 2022
Bottom Line 25/01/22
Daily Trend: Down
Weekly Trend: Down
Monthly Trend: Down
Support Levels: 4000
Resistance Levels: 4749 / 4819 (all-time highs)
Technical Discussion
Reasons to remain longer-term bullish (some caution warranted more immediately):
→ Elliott Wave count continues to have bullish momentum bigger picture
→ major support/resistance zone around 3550 – 3450 continues to hold strong
→ adjusted wave count yet still part of a larger cycle Wave-[III] move subdividing north
Although we haven’t witnessed an EW core ruling break in the S&P-500, we have on our Nasdaq price chart which we are also reviewing tonight. Yet as we have now witnessed a deeper than expected move within this immediate consolidation phase, we have decided to line up our count on the S&P-500 chart to that of the Nasdaq. Have a listen to our video tonight for further explanation, and also check in on our Nasdaq review tonight as well.
So we are doing S&P-500 reviews twice this week as we always do when strong volatility enters the fray. The 200 day MA has also been broken below since our last review which is a significant event. More so if it sticks, with such a scenario yet to be proven. For now, we continue to remain optimistic U.S markets. And certainly our longer-term positioning of the trend as part of our wave count continues to look robust bigger picture.
So basis our adjusted count we now have a higher degree Wave-[4] in play as part of an even larger cycle Wave-[III] that we keep talking about. Based on the Laws of Alternation, this Wave-[4] is also likely to be more complex than a straight out A-B-C move south. So we could now be in a phase of consolidation that may take a number of months to complete.
The immediate Wave-C of this initial A-B-C move south also has the potential to subdivide into a smaller 5-wave pattern within itself. This means lower levels could still be on the cards shorter term before some form of low is locked in. Take a look at our video tonight for further explanation on this as well, and how the Law of Alternation frequently plays out. Never any guarantees of course yet knowing the concepts of Elliott Wave theory does at least provide a heads up as to what we could be in for over the coming weeks or even months. Last night was super bearish for most of the session, yet the Bulls took over in the last couple of hours to close out a very volatile session in the green. Expecting further volatility over the coming sessions as well, so hold onto your hats!
Trading Strategy
Well, we are back in defensive mode now with a number of our stops being hit over the past few sessions. Our Gold and Energy trades are hanging in there and proving robust to this point in time, yet most of the other sectors have been under the hammer. Standing aside for the most part now – at least until the dust starts to settle.
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