S&P 500 direction. 2012.05.24

The S&P 500 Index reversed exactly in the H&S target level at $1.292 a few days ago.

Even though the Greek concerns are the main focus of the markets, the current prices seem to be oversold, at least on the short term.

In case of a continuing recovery, the targets are measured by the Fibonacci retracement levels of the down swing started in early May. The resistances are: $1.325, $1.340, $1.353 and $1.368. 

Travelers Cos Inc. (TRV) - Bullish trend still in progress. 2012.05.24

The daily chart of Travelers Cos Inc. shows a medium term rising trend that started in early October 2011.

The Elliott Wave analysis reveals the development of a primary third impulsive wave (III). Breaking down the waves, the count shows the fifth wave of the third wave in progress. The first target is in the $65.77-$66.20 area, this being calculated using the wave projections.

In case of a wave iv continuation below the current support at $62.10, the next target for wave iv will be in the $60 area.

EURUSD - Strong support at 1.2500. 2012.05.24

The EURUSD cross reached the 1.2500 support area this morning as the EU leaders failed yesterday to reach an agreement on common European bonds.

Technically, the daily chart shows a descending triangle formed in the February – May time range and the classic target is in the 1.2500 area. A broader support zone stands between the 1.2500 and 1.2630 levels as the lows of August 2010 and January 2012 are representing a key level.

If a reversal pattern will form in this area and the bad European news will fade, the euro will bounce towards the 1.2800 level (T1 trend line) in the first stage.

Home Depot Inc. (HD) - In a mid-term correction. 2012.05.23

Home Depot shares price dropped 12.00% since the beginning of May, this being the biggest correction in the past 10 months.

The market price action favors an intermediary correction that usually lasts for a few months. In this particular case, the $43.40-$44.00 area stands as a good target on the down side.

However, the most probable scenario includes a three wave pattern (zig-zag) that could travel up to the $50.00 level before resuming the correction.

Cisco Systems Inc. (CSCO) - Holds the $16.35 support. 2012.05.23

The Cisco Systems shares price dropped in the first part of this month, after the earnings release and the buyers came in the market in the $16.36 area to stabilize the price.

The long term chart reveals the strong horizontal support in the $13.60 area that was successfully tested in March 2009 and in August 2011. However, the market developed lower highs in the past five years, giving a sign that the bears are still dominating the market.

Focusing on the mid-term price action, we can notice that the price is stalling in the 61.8% retracement level of the August 2011 – March 2012 rise that ties in with some key points set in the summer of 2011. Whatever the main trend direction will be, a move towards the $18.23 (+9.0%) level is likely in the next weeks.    

S&P 500 - reached the tagret and is set for a bounce. 2012.05.22

The target on S&P ($1,292) has been reached on Friday, as expected since May 11^th, when a Head&Shoulders pattern has been completed.

The strong bounce of yesterday (+1.60%) proved the investors reversal sentiment from a key support zone. The Greek problem has been put on hold until the mid of June, when new elections are planned. This three week period could turn into a rally on the major international markets, especially if the US economic data, the FED and the EU officials will sustain the growth.

The first important resistance comes at $1,325 but the bounce could easily travel towards the $1,350 area in the up coming weeks.

     

Crude Oil (WTI) - reversal pattern. 2012.05.22

The daily chart of Crude Oil (WTI) shows the piercing pattern formed in the last couple of days in the support zone between the $90.00 and $92.20 levels.

Technically speaking, this is a reversal pattern that marks the beginning of a rally. The closest target is in the $98.15 area, which would provide a 5.9% increase in crude oil price.

Even though the Organization for Economic Cooperation and Development (OECD) trimmed economic growth forecast in the euro area (according to Bloomberg), the oil market could easily reverse on the agreement between Iran and International Atomic Energy Agency on nuclear inspections.

Moreover, the technical outlook suggests higher prices in the next month as the $90.00-$92.20 area represents a cluster of supports.