The collision of global markets and social mood

Tuesday, June 3, 2014

An Exact Fib Test And A Dose Of Reality

Combining wave structure (Elliott wave) with Fibonacci is the best way I know of to provide nearly exact price projections and stops. They're not always correct. Nothing is. But accurate price projections can help you consistently reap profits, and tight stops help protect those profits.

Been highlighting the 1925.67-1925.88 Fib confluence zone for days now.

Yesterday closed at 1925.88.

Seems fitting then that futures are down this morning. After all, the day closed with negative A/Ds -- more decliners than advancers. It also seems Europe may be providing a dose of reality before Draghi's big ECB decision on Thursday. Europe is persistently sliding towards deflation.

Draghi has a whopping .25% interest rate to play with. It is speculated he'll unveil negative interest rates, in effect charging for deposits, in effect forcing people to "use" their money in the markets.

They'll use it alright -- they'll stuff it in their mattresses. And Europe will continue its descent into outright deflation. Japan II.

It appears the S&P needs to get below 1915.98 as a first warning to bulls. The far more important level is the 1900.53 breakout. Retesting that spot could be too much to take for a market running on fumes. 1850-1860 could then become the next target.

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