DAX

The EU market is upside oriented today as well. I can suggest to play this bullish strategy as long as the market does not go below 5773. I expect a direct rise to 6062. Buy around to 5890 to play a rise to 6062. The invalidation level  is at 5773.

                                                                      Good luck#

EUR/USD

An imediate drop is expected on the forex market. The market is downside oriented today. It's preferable to play this bearish scenario  as long as the market does not go above 1.3183, as I anticipate a direct drop atleast  to 1.2944. Sell close to 1.3133 to play a drop to 1.2944. The invalidation level of this trade idea is at 1.3183 levels. 

Good luck trading@

MRK - Merck & Co Inc.

                      Merk & Co Inc. has reliable fundamental parameters and technical patterns to be added to your portfolio.

• Merck makes pharmaceutical products to treat conditions in a number of therapeutic areas, including cardiovascular disease, asthma, infections, and osteoporosis. The company also has a substantial vaccine business, with treatments to prevent hepatitis B and pediatric diseases as well as HPV and shingles. Following the Schering acquisition, about 45% of the company's sales are generated in the United States
• Merck remains in strong financial health, even with the additional $8.5 billion in debt needed for the Schering acquisition. We expect the combined company will generate a free cash flow of approximately $12 billion in 2011.
• Merck's new products during the last few years have helped to offset recent patent losses, Januvia for diabetes and Isentress for HIV.
• Merck's efforts to develop a reliable late-stage pipeline have yielded questionable results. The Food and Drug Administration denied Merck approval for cholesterol drug Tredaptive (formerly Cordaptive) in early 2008.
• Deciding not to wait for new internal pipeline drugs, Merck significantly strengthened its operations by acquiring Schering-Plough for about $40 billion. Schering brings in a very strong pipeline of late-stage drugs with blockbuster potential and faces only limited patent losses during the next few years.

                                           Current Valuation

 MRK

	MRK	Industry Avg	S&P 500	MRK 5Y Avg*
*Price/Cash Flow uses 3-year average.              Risk Merck's near-term risk largely centers on market acceptance of new products. Like all pharmaceutical companies, Merck faces regulatory risk from the FDA. Product delays or nonapprovals could hurt the stock. Also, the growing power of managed care and a more price-sensitive U.S. government may reduce Merck's pricing power.          Bulls say New product launches of Isentress and Januvia leaped to a strong start, and delays of competing drugs have given Merck a leg up in maintaining market leadership Restructuring efforts should reduce costs and improve margins over the long term, helping to offset the patent expirations of high-margin products. The acquisition of Schering enables Merck to potentially achieve $3.5 billion in annual cost-saving synergies by 2011.         Bears say Merck faces the loss of its largest sales contributo when the 2012 patent on Singulair expires. Poor trial results from a key Schering pipeline product called TRA casts a cloud of increased uncertainty over the other pipeline products acquired in the Schering acquisition.   Poor results from the Enhance study combined with increased generic statin competition could reduce the market potential for Vytorin and Zetia. Technical overview           The current price action has a lateral track with slightly down side bias. I still can't say this share has a BUY signal. I need to see overcoming the $37.65  resistance first and closing above the upper channel line. Good luck trading!
Price/Earnings	37.0	16.2	12.5	40.7
Price/Book	1.9	2.3	1.8	3.9
Price/Sales	2.3	2.5	1.1	3.5
Price/Cash Flow	10.0	9.2	8.1	14.9
Dividend Yield %	4.4	3.8	2.5	3.9
Price/Fair Value	0.7	—	—	—

Gold

                                  The gold has resumed its long term trend again and the current trendline keeps the bull rally intact.

                    

• Overcoming the 1680 resistance the gold triggered its rally again. Last week was marked med term high at 1754 and the counter reaction was very moderate. 
• The current upswing suppose to pick up speed very soon.

                             

P.S. I Forgot to mention that (4)th wave looks truncated

Good luck trading!

EUR/USD - Elliott Wave Update

The pair EUR/USD chose the steep direction toward 1.4550.

EUR/GBP overcame the resistance 0.8795, and turned it into support.

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EUR/GBP - Elliott Wave Update

       The currency pair EUR/GBP made corrective pullback, which was little more complicated  than I expected , but it's OK.  
       The pattern which I prognosticated still seems to be valid, and I still expect bounce up toward 0.8940.
       As you can see the price gives a try to overcame the 0.8787 resistance.

       I would appreciate your effort to comment the instruments, which I analyze in this blog. If you have any suggestions - I am an open source. 

                                                            Good luck trading!

HSI

        There is not much to be said about Hang Seng Index, except that it has ideal classic wave structure. HSI not only drew five ideal waves, but it pulled back to 61.8% Fibo. It seems that it made long term bottom and ready to take off again. 

      Hourly picture shows the chart, that is full of huge gaps. Despite the gappy structure the one can count waves perfectly. I noticed that third waves are shorter than first waves usually, but the pattern stays valid.

Good luck trading!

DAX

      DAX may have finished the dipping  toward the bottom already. Since May/2 /2011 DAX unfolded in three clear A,B,C waves, and bottomed in Sep/12/2011. This bottom suppose to be the END of the Bear market/correction. The C wave lays right on the line of 423.6 % Fibo of A wave, and close to 61.8% of the whole bullish move since Mar/9/2009.

 The price action imposed bullish tune in my analysis on daily base. The waves look very clear, to be counted, and no doubting - this should be resuming the bull market. 

Good luck trading!

EUR/GBP

Looks like the Euro pushes up the GBP as well.

The (( C )) wave is expected to unfold toward 0.8940.

Good luck trading!

EUR/USD

The Euro tries to climb to 1.450 in a straight direction, or pulls back to 1350 first. 

Good luck trading!

COMPQ – WEEKLY TECHNICAL OUTLOOK

                  The March 2009 to May/July 2011 bull market unfolded in five quite clear waves as well as SPX and INDU. The one can count these waves as five Primary waves, expecting this bull market off the Mar.09 Supercycle low to be of a Cycle wave degree.

                  The recent two year bull market I have currently labeled is Cycle wave [1]. It should be followed by a Cycle wave [2] as a bear market. Recently this bear market has unfolded its first A wave and the second B wave hopefully. We should expect one more bear move to unfold as wave C to complete the Elliott Wave pattern called “zig-zag”.

                  Fibonacci relationships suggest a potential  low at three specific areas: 38.2% retracement at 2262, 50.0% retracement at 2071and 61.8% retracement at 1880. Currently I am expecting next move to 2100 support area to unfold next few months. I can confirm bull market in correction on weekly base.

COMPQ – DAILY TECHNICAL OUTLOOK

                  The current downtrend started in early July at 2879. I can count the current wave A as completed, because it contains five clear impulsive waves. I have labeled B wave as completed because it has already corrected 50.0% of A wave, but it have may not finished yet.

                       What should follow next is a preferable rally as Primary C wave. Potential target is the 2070 support zone.

             We shouldn’t consider any bullish move as a resuming the long term bull trend until breaking the resistance area 2600-2660, and closing above it on daily base.

S&P 500 Week for reflection

        Next week suppose to be one of the important weeks for the S&P 500. 

       We have already 8 weeks decline and the price has already touched the important  Gann Angle closing above it. I pay attention to the number 8, because it is included in the Fibonacci sequence, and has it's importance. The odds are extremely in favor of a significant rebound to happen here in the environment of the support, offered by the Gann Angle, 200 day moving average gives price support as well. A reversal daily/weekly candle will be one of the signs for rebound. 

       I can also assume spiking weekly candle, reaching 1250 even 1232, with closing weekly price above 1247.80.

       The Elliott Wave pattern that has been forming for several months (2/22/11 - now) is running flat(3-3-5) in case the price doesn't break 1247.80. If does break it, the running flat turns into expanding flat (3-3-5).  

Good luck trading!!!

  

S&P 500 How strong is the fear

      The old saying - ' sell in May and go away ' , "pulled the market down again". It is a fact that US indexes have been faling as long as five weeks, and the fear melts the prices as always. 
       Exactly at  1266/20.06.2011 passes the 45 degree Gann angle with a start point 665.83/06.03.2009. Around that level the bulls should take control again and lead the price at new year high around 1393, marking a new top.

Good luck trading!

S&P 500 The bulls are back

          As you may see the price refuses to decline more than 50% of the entire bulish move (3/16/11 - 4/6/11).  The daily closing price was also higher than the resistance 1293.41, which undoubtedly gives us clear buy signal. Safe place for SL is 1298. Most likely he price will continue up next few weeks. 1375 looks like an imminent target. As time is more difficult to determine, but around these periods med term top could occur (May 3-10) or (May 21-28).

Good luck trading!

ONE ELLIOTT WAVE TRADER

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DAX - Elliott Wave Update

Last European more significant bear correction srarted 07/2007 and botomed at 03/2009. It unfolded in three waves A,B,C, and declined 56.11%. The B wave was nearly 161.8% of the A wave. Then the long term bull market probably resumed. The price paints fifths so far. When reached the B wave resistance, the price made very sharp counter reaction, and prodused reversal monthly (03\2001) candle (hammer).

The A,B,C pullback hit 61.8% Fibonacci level of the entire 1 st wave.

Good luck trading!

ONE ELLIOTT WAVE TRADER

GOLD Elliott Wave Update

       There are few very likely targets for the next few weeks visible above. On the one hand the upwards proceeding resistance diagonal at 1505 and the next resistance at 1515 in April. Considering the weekly setup, I clearly can see that the main target at 1576 is coming into play.

       So, we’ll have to buy more gold in case of any significant  correction( buy the dip). 

The 1576 will be reached - maybe in 2012!

Good luck trading!

ONE ELLIOTT WAVE TRADER

SP500

    One month later the daily picture doesn't change much. According to my Elliott Wave count we must be in 5th Minor of (1)st Intermediate of 3th Primary. 

    The price still moves in track and longer term bulls control the ball. Since early July 2010 the market has been following this bullish setup. We should see rising prices at least few more weeks. My expectations for Intermediate top are in the range between 1375 - 1393. Will the saying "Sell in May and go away" will stay valid this year....

     In four hour chart I have included my Gann Angle Calculator, which is made in excel. It helps me to determine the support and resistance levels in advance as degrees, percent and price points.

Good Luck trading!!!

ONE ELLIOTT WAVE TRADER

SP500

We have third attempt to break the lower blue line. That undoubtedly means BUY signal. Target - the same.

Good trades!!!

SPX Friday Observations

 The 5th wave probably will not be as short as regularly is, and most likely I will assume on extended fifth to 1361-1378 range. I changed the (5)th wave count a little. It is similar to the count of friend of mine. 

In bigger time frame the picture still looks bullish. Since 1/3/2011 the price is something like "trying to escape from the expanding blue triangle chains"' but still not able to make it. The upper line keeps the closing daily price bellow and the lower line keeps it above. 

1361 looks like a price magnet, because 1360.65 is 261.8% of the (1)st wave, and 1361.01 is 100.00% of the (3)th wave. Untill we don't see breakthrough the triangle chains in weekly base before reaching 1361, I will reckon on this scenario.

Good luck trading!

Elliott Wave Update

   SP500

     The odds for extended Minor fifth wave become real , but not confirmed yet. The positive market bias still leads the price. Next short term resistance 1299.26 probably won't be a problem, because the bulls missed to touch 1300 last week, and I'am sure they will make another attempt. And 1304 is important angle acording to my Gann angle calculator. 

    1270.67 appears to be very strong support at least short term. If the bears get this support in the course of the week, will begin a correction. If that happens, the move will be very lazy, and probably will nest the price at the next support/resistance- around 1249.  

      There are many bearish calls last few days in the blogosphere, but I realy don't see any meaningful reason for dramatic and sharp sell off very short term. "What everyone knows is not worth knowing". 

     In 1/19/2011 the price broke dramatically 1287.25, touched 1270.75,  and produced reversal daily candle, which closed above the pink line (Gann angle). If we don't see weekly close below the main Gann angle, probably the price will bounce directly to 1360-1378 range, without a roundabout way.

STOXX50

     The upper channel line just stopped the bounsing price, but not for a long time. Typically for this index is  extended first wave. It occurs very often. 

I haven't labeled this sharp move, because I am not sure that first wave has  already unfolded and complete.

    "Grand picture" looks the same as it was last month-bullish long term. We are getting closer to weekly, and very strong resistance 3025-3043. We have Head and Shoulders pattern, whose projected target will be met this year probably.

Good luck trading!

SP 500

As long as the price continues to climb,  the ice under our feet becomes thinner and thinner at the same time. 

I come up with a slightly changed wave count, see the chart below. The price just touched 1287, which suggest lateral track for the rest of the session. The scenario stays valid- projected target 1304 . Better to stay away while this last wave unfolds.

We'll have almost 30% rise since 7/6/2010 if 1st Major finish around 1304-1315.

Good luck trading!

SP 500

Yesterday's price action didn't violate the tight trend channel. Market closed above the 1270.75 pivot, which sugests testing the next pivot and Gann angle 1287.25. Most likely the price will hit 1304 later this month. According to this count we are in the middle of Minor wave 3 of Intermediate wave 5 of Major wave 1. Breaking 1254 will negate the Minor count.

Long term (daily) conditions still look steady and bullish despite the slightly overgought  indicators. Bullish action remains on track.  Reaching 1304-1315 pivot area will probably produse more violent decline. Until then we stay bullish.  

Good luck trading !