S & P: Corrective wave B to the initial rally from 1073-1233. Buy near 1150-1175 for eventual 1265

Unless things change dramatically for the worst, I am of the opinion this is a mere corrective move to the nine day rally we have witnessed till last Friday. Wave A is 1073-1233, Wave B should retrace 38.2% to 50% of this rally bringing us down to support at 1175 and at very most 1155.

Once this level is reached, then we are on target to reach 1265 which will be high level target for Nov 2011.

AUD ST target hit at 1.0240

Sell AUD here for Short term trade against USD: Take profit at 1.0240, Stop loss at 1.0396 and above

The negative divergence on the MACD warns of pushing this pair higher. I am going for a ST trade to take advantage. Sell here to take profit at 1.0240 and stop loss above the current 50 day MA at around 1.0386 or so.

EURUSD: 1.3150 low to 1.3697 rally finished. Sell here to target 1.3450-86 first

The recovery rally off 1.3150, which was the base after breaking my 1.34 support, is over after hitting 1.3697 yesterday. ST sellers can sell here for a pulback towards 1.3450-1.3486

SPX: A tactical low at 1073 last week could well be important low for year end run

Early August, we first hit 1100 low on S & P 500. Yesterday, we hit 1074 intraday low which qualifies for a lower low.

Two evidences that point to possible important tactical low:

One:
Distance from 10 month MA in Mar 2008 = 197 points
Distance from 10 month MA at intraday low yesterday = 192.

Two:
More importantly, I compared the various market internals levels hit yesterday with Aug’s numbers. We have a 6 out of 7 showing bullish divergence signals. Means to say market breadth is not as bad as compared to Aug 1100 low. This is an important clue to suggest we may have hit the tactical low this quarter for my year end run?

EURUSD: Target 1.34 hit. Now heading towards 1.30

EURUSD has hit my target of 1.34. It is likely to break lower and test 1.30 before we see any significant rebound.

S & P 500: Mirrors early 2008. Will see a lower low in next two weeks, probably a 20% rally till end of the year

In 1st Q 2008, S & P 500 broke its 50 week moving average, tested the 200 week MA and range traded for 8-9 weeks and made a lower low before retracing 50% of the top to bottom move back to the 50 week moving average again. It was a decent 20% rally before we saw market tanked in 3Q 2008 to early 2009.

Right now, we have broken the 50 week MA and tested the 200 week MA. We have range traded for good 7 weeks. I suspect a lower low of 1040 will be made and then we may have a decent 20% rally till end of the year and upside is about 1250 (around current 50 week MA).