Crude Oil (WTI) Technical Analysis 2011.10.27

The 15 min chart of Crude Oil (WTI) shows a down move development with lower lows and lower highs. The price has retraced 61.8% of the previous down swing and has also reached the $92.40 resistance area that represents the previous troughs.

If the sellers have more to offer in this period (from 25^th of Octomber) this will be a probable reversal point .

Looking at the 4 hour chart, we can see the Crude Oil price broke the most important resistance of the previous months ($90.00 level).

The trend is still strong as the price managed to reach the upper border of the channel (T2). Furthermore, the slopes of the swings and the market dynamics are representative of a bull market.

An eventual break below the $90.00 level and the T1 trend line will give evidence of a correction in progress.   

CONCLUSION: Crude Oil price can move within the $90.00-92.40 area without any relevant information for the future price action. We have to monitor these levels in order to get the market leaders (bulls or bears). If 92.40 will be broken, we should get further confirmation of it as a support level before the previous highs ($94.60) will be set for a target. 

S&P 500 Technical Analysis 2011.10.26

Strong resistance at $1,260 area

The daily chart of the SP shows the price reaching the strong resistance of the 1,262 area.

The previous local lows of mid March and mid June along with the 61.8% retracement of the last few months of the decline forms a strong resistance in this area.

From Elliot Wave perspective we are, most probably, at the end of the second wave of a 5 wave down move on the long term. This is no guarantee that there will be a reversal here. The maximum wave 2 can travel is at the early may peak in in the 1,376 area.

Another bearish sign is the bearish engulfing candle pattern formed in the last couple of days (without the current day). If the bulls will show further signs of exhaustion in the next few days (keeping this week’s highs intact) we could witness the end of wave 2.         

Dow Jones Industrial Average (DJIA) Technical Analysis 2011.10.25

Is the trend reversing?

The Dow Jones Industrial Average is making higher highs after oscillating in the resistance area of the September highs (11,400-11,700).

The 4 hour chart covers the whole decline started in early April and the current rally reached yesterday the 61.8% retracement area. Therefore, the 11,950 level is set to be a strong resistance adding the fact that this area represents the mid June lows (end of wave [i]).

Having this levels in mind, we can think of two scenarios, both pointing to the down-side: if sellers will overcome buyers in this area, the break of the 11,700 support will set the market for further decline; if sentiment will remain positive in the next days, we can see bull move looking to test the 12,000-12,300 area.

Keep in mind that the Elliott Wave theory states that a wave 2 (which seems to develop in our case; formed of [a],[b],[c] sub waves) will make the investors think that the trend has reversed and most of the time reaches the 66% retracement area.        

EUR-USD Technical Anlalysis 2011.10.24

EUR-USD: 1.3900-1.400 is a strong resistance 

The EUR-USD reached for the second time the 1.3900 resistance level as the 1.3660 support hold well in the last week.

Looking at the bigger picture, the 1.3900-1.4000 area is a strong resistance area, given by the previous lows (created in the may-august period) and the 50.00%-61.8% retracement zone of the September decline.

In case of a reverse to the down side, the first important support is set around the 1.3660 level and the next one is down towards the early October lows in the 1.3150 area.

The other scenario is the break trough of the resistance area and targeting the late august highs in the 1.4500 zone. However, if this will be the case, we need to see the current resistance area turning into a confirmed support.