market update 11 july 10

8/9/2019 Market Update 11 July 10

1/13

Andys Technical Commentary__________________________________________________________________________________________________

S&P 500 Daily Close

Left Shoulder

Head

Right Shoulder

The head and shoulder pattern the media was widely discussing became a classic bear trap.

(GREEN LINE) Markets follow the path of greatest pain for the most number of people. Therewas too much negativity and talk of broken necklines, so of course Mr. Market had to rip apart

all the new shorts selling the neckline break. Ironically, there may still be a genuine H&S

developing, but its a little more difficult to see and not as clean. (BLUE LINE) Though, thats

probably a good thing in terms of trading a reliable pattern--if its too clean and pretty, it wont

happen!


2/13


S&P 500 Sep e-Minis ~ (120 min.)

y

b

c

w

The move down from the proposed x wave has been difficult to decipher. Because of the way it developed in the

beginning, it remains a reach to label the move an impulse lower, so Im stuck with this sort of wave model.

a

a?

xc

a

b

b?

c?

y ( A )

Y Wave Targets:1000 for 78.6% of w = y

965 for 100% of w = y

931 for 61.8% of w measured from the w conclusion.

REPRINTED from 7/4/2010


3/13



y

b

c

w

This wave count highlighted last week would certainly be the count that achieves that bigger

right shoulder. This model EASILY takes the S&P back to 1150 because a (B)-Wave here

must retrace 60-80% of the (A) Wave. Unfortunately, because of the structure of the waves

down, the precise wave count is impossible to know with any certainty.

a

a

xc

a

b

b

c

y

( A )?

a

b

( B )

c


4/13



y

b

c

a

For instance, there is still THIS ugly bearish possibility which would send the S&P to the mid-

800s within the next several weeks. This model cannot be discounted until the S&P futurescan take out 1080. A break of 1080 would kill this count*.

a

-5-

1

b c

a

b

2

-1-

-2-

3

-3- -4-

* A 1085 break on the S&P Cash would also kil l all those ideas about an unfolding

Impulsive wave from the 1220 highs. We dismissed those ideas awhile ago, but any

further strength should finish them for good.


5/13



y

b

c

w

Im only presenting this triple zig-zag count model to demonstrate the variety of outcomes

still available to the market because of the way the waves developed from the highs.

a

a

xc

a

b

b

c

y

x

z

( A )

( B )


6/13


S&P 500 Sep e-Minis ~ (240 min.)To quote Crash Davis advice to Nuke LaLoosh in Bull Durham: Dont think meat.

Sometimes its best to just pull back and observe the market for what it is. This is a

downtrend that appears to have triggered a large scale head and shoulder top. The

trading bias has been bearish and must remain so. Im nervous about a sharp

bounce back due to excessive short term negativity, which is why I remain only 20%

of Max short position. Highlighted below are short and medium term resistance levels

for the Sep Mini futures. Breaks of these points should lead to pivots higher.

1044

1130

1075

REPRINTED from 7/4/2010


7/13



The market easily sliced through the 1044 resistance point highlighted lastweekend, which allowed the market to pivot to the next level of resistance.

Highlighted here are the support and resistance points of the S&P futures.1054 becomes first level of support for bulls with 1040 becoming more solid

support. First resistance at 1080 is nearby for the bears, a break of whichshould send the market to 1103 if not 1130.

1080

1130

1103

1040

1054


8/13

Dollar Index (Weekly) ~ Inverted H&SBottom?

Just because Head and Shoulder patterns have been mentioned here more

often lately, its probably worth noting this set up. There is definitely thespirit of massive inverted H&S bottom on the DXY. This outcome would

mean continued deflation brought on by the debt bubble unwind.


LeftShoulder

Head

RightShoulder

~ 92.00


9/13

Dollar Index (Weekly)This is my primary count on the DXY at this point. The c wave down was very difficult to countas an impulse. The individual legs of the of the d wave up were very difficult to count as

impulses as well. Therefore, this is the model that remains. It suggests we should see acorrective move lower, with the high 82 area looking like a decent target. When this completes,

we should see a very powerful move higher.


77.69

a

b89.62

( A )

x

w

y

x

74.33

z of c

b

c

d

a

d

e88.71

82.87??

e

( B )

WIDE SPREADPANIC (C)

82.87 would be a 38.2% of c=e target.

Reprinted from 6/27/10


10/13

Dollar Index (Weekly) The action in the DXY has been somewhat predictable. Into the recent 88.71 peak,there was simply much too much bullish sentiment on the widespread belief that the

Euro was going to collapse any day. There was also the evidence of a completedwave structure. A continued pullback/congestion back to 82.87 (or lower) still seems

doable. The bigger picture, though, remains bullish.


77.69

a

b89.62

( A )

x

w

y

x

74.33

z of c

b

c

d

a

de

88.71

82.87??

e

( B )

1 of ( C )

82.87 would be a 38.2% of c=e target.


11/13

Dollar Index (180 min)

Theres actually a decent smaller scale H&S which was activated on the DollarIndex at 85.00. This pattern targets 81.50. Highlighted here is the wave model

that could certainly take the DXY to 81.50s.


-1-?

de

88.71

a

b

-2-?

-3-?

-4-?

-5-

ce

( B )

LeftShoulder

Head

RightShoulder


12/13

Dollar Index (Daily)

Its interesting to observe how the 23.6% retrace formed the neckline and

the 50% retrace provides the target of the H&S top. The 81.50 zone shouldbe extremely solid support.


Left

Shoulder

Head

Right

Shoulder


13/13

DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any

kind. This report is technical commentary only. The author is NOT

representing himself as a CTA or CFA or Investment/Trading

Advisor of any kind. This merely reflects the authorsinterpretation of technical analysis. The author may or may not

trade in the markets discussed. The author may hold positions

opposite of what may by inferred by this report. The information

contained in this commentary is taken from sources the author

believes to be reliable, but it is not guaranteed by the author as to

the accuracy or completeness thereof and is sent to you for

information purposes only. Commodity trading involves risk and is

not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC)

has said about futures trading: Trading commodity futures and

options is not for everyone. IT IS A VOLATILE, COMPLEX AND

RISKY BUSINESS. Before you invest any money in futures or

options contracts, you should consider your financial experience,

goals and financial resources, and know how much you can afford

to lose above and beyond your initial payment to a broker. You

should understand commodity futures and options contracts and

your obligations in entering into those contracts. You should

understand your exposure to risk and other aspects of trading by

thoroughly reviewing the risk disclosure documents your broker is

required to give you.

Wave Symbology

"I" or "A" = Grand Supercycle

I or A = Supercycle

or = Cycle

-I- or -A- = Primary

(I) or (A) = Intermediate

"1 or "a" = Minor

1 or a = Minute

-1- or -a- = Minuette

(1) or (a) = Sub-minuette

[1] or [a] = Micro

[.1] or [.a] = Sub-Micro

market update 11 july 10

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