Ping Pong Markets

Greece is not going to default until it runs out of cash so traders took the opportunity to play Ping Pong waiting for the FOMC meeting scheduled today and tomorrow:

- img37.imagefra.me/i59k/aarc/12xv_6e0_ubk...

For the bears, the target will be the July 2010 low if it starts going down from here and the August 2010 if Spx is able to form a bigger bear flag with the daily 200ma as the Major Resistance.

For the bulls, a 1-2-3-4-5 rally should be able to reach 1355 as a Nominal Target if the bear flag fails (measured from the August 22, 2011 higher low - as discussed in previous Instablogs with the 5th wave down truncated at Aug 22 low).

For the to short-term to medium-term bulls; there are some compelling reasons to go long:

SnP: img37.imagefra.me/i59k/aarc/12xv_51d_ubk...

DAX: img38.imagefra.me/i59k/aarc/12xv_1c1_ubk...

Spx and DAX monthly 200ma Supports are obviously at work this year. Will they be able to provide only a corrective upside bounce or result in a new multi-year rally remains to be seen.

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For now, it is better to play 'Cautious' since the best short-term entries were already done and gone.

Best entries for SnP500 longs were illustrated on 'Bottom Fishing' and 'Speculative Intraday Wavecounts' Instablogs and my Comment of Sept 12 using a Double Divergence Buy Setup to enter DAX on the daily chart.

For the bears, it is obviously the upper channel resistance as the best entry for going short and presumably the daily 200ma for the SnP500.

DAX will still have to setup a bearish pattern presumably in the next several months that may last 5 to 15 months depending on how complex the expected b-wave unfolds. DAX is still a good buy short-term on minor pullback on the daily chart.