Euro Stoxx 50 Index
· There are two possible scenarios in my view:
1) The Index is in a corrective wave 4 which should set the ground for a final wave 5 move higher (see 1st chart). In this scenario:
o Wave 4 should find support between 3,486-3,615. 3,486 is the 38.2% Fibonacci Retracement of wave 3 and at 3,615 corrective wave A of wave 4 = corrective wave C of 4
o If the Index does find support between 3,486-3,615 then a final wave higher should be in play.
o Based on the height of wave 1 I would expect wave 5 to target 3,975 at minimum
2) The Index has already completed a 5 wave move higher and is in a longer and deeper corrective pattern (see 2nd chart). In this scenario:
o The close yesterday below the 55dma (3,644) was negative and while below it a move lower towards the 200dma at 3,290 could well be on the cards
Strategy: Long 2 units from 3,640, target 3,975 with a stop loss on a daily close below 3610 or at 3,570 (below this week's low)
Daily chart 1
Daily chart 2
S&P 500 Index
· The Index failed to break out earlier this week and is now trading lower and testing the short term rising trend line connecting the lows from March 11th low at 2,039
· A move below 2,072 would negate the path of higher highs and higher lows established on the chart since Early March and would turn the structure from bullish to bearish
· Also, on a weekly scale, a daily close today below 2,084 would implement a weekly bearish reversal and will increase the odds for a move lower
· All in one, while above 2,072 the odds for a move higher is still high but a move below this level and a daily close today below 2084 (which would also be a weekly close)
Strategy: Long 2,112, target 2,180 with a stop at 2,070.
Daily chart
Russell 2000 Index
· The Index broke down yesterday from a bearish wedge pattern – the breakdown level is 1,250 and the pattern targets 1,185
· The Index also broke below the 55dma which stands at 1,244
· The above mentioned makes the 1,244-1,250 a good resistance level and while this level could still be tested while below it a move lower towards 1,185 should be on the cards
Strategy: Short from 1,242, target 1,185 with a stop on a close above 1,260
Daily chart
US 10 Year Yield
· On the daily chart, the yield broke out from a consolidation pattern which targets 2.1650%
· On the weekly chart will need to see a move above 2.2850% which would signal a breakout and argue for higher yield levels ahead
Daily chart
Weekly chart
IEF US - iShares 7-10 Year Treasury Bond ETF
· The ETF broke lower from a bearish wedge pattern – the breakdown level is 108.50-108.60 and the pattern argues for a move to 106.20-106.30
· This structure fits the bullish structure on the 10 year US yield
Daily chart
2015 Tech Ideas
