The countertrend rally that started on June 4[SUP]th[/SUP] from the SP 500 1267 low is still underway. Of course the Greek elections are a wild card. The near billion dollar daily withdrawals this past week by Greeks, fearing instability, is causing a mini run on their banks. Stashing sacks of Euro’s and piles of pasta; now that’s a new one.
There is an upside target for the current move to approximately SPX 1360-1400 as shown in the charts. There is also an inverse head and shoulders under development. This is the countertrend wave B, where wave A and C are down. If A = C, then the move could complete near the 1200 level before the downtrend is over. This whole process may draw out to near the end of August or early September.
Will the US markets cheer if Greece leaves the Euro, or will there be cause for contagion fear; that is the million dollar question. If the leftist Syriza party is defeated the market should immediately jump 30-40 handles. Or, thinking like a contrarian, if the leftist party is put in power the market should also cheer and complete wave B in the process. After all wouldn’t that be a relief, with finally some kind of resolution that restores an ambiance of certainty? We can see the short term chart for SPX is near support and completing wave 2 as an ending diagonal. A very short term buy signal could arrive shortly. On the other hand a black swan may be circling. You make the call. Thanks for reading.
There is an upside target for the current move to approximately SPX 1360-1400 as shown in the charts. There is also an inverse head and shoulders under development. This is the countertrend wave B, where wave A and C are down. If A = C, then the move could complete near the 1200 level before the downtrend is over. This whole process may draw out to near the end of August or early September.
Will the US markets cheer if Greece leaves the Euro, or will there be cause for contagion fear; that is the million dollar question. If the leftist Syriza party is defeated the market should immediately jump 30-40 handles. Or, thinking like a contrarian, if the leftist party is put in power the market should also cheer and complete wave B in the process. After all wouldn’t that be a relief, with finally some kind of resolution that restores an ambiance of certainty? We can see the short term chart for SPX is near support and completing wave 2 as an ending diagonal. A very short term buy signal could arrive shortly. On the other hand a black swan may be circling. You make the call. Thanks for reading.
