I posted a EUR/USD, DXY, Gold and Silver update a few hours ago: http://www.wavaholic.com/2011/05/eurusd-dxy-gold-silver-update-1-may.html
Review of April
April unfolded almost as expected:
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| "It looks like we need one more rally to complete wave 1. After that a wave 2 should follow down into the 1300 area. " |
Wave 1 peaked at 1339 early April and wave 2 unfolded in a simple zigzag and ended at 1295 mid month. Since then we've seen a huge rally and the SPX finished the month at 1364 (up about 3 %).
Outlook on May
I generally expect more of the same as in late April and wouldn't be surprised to see a 14xx at the end of May.
Last year the SPX topped in mid January, corrected into early February, formed an inverse H&S and then rallied for two and a half months till April.
This year the SPX topped in mid February, corrected into mid March, formed an inverse H&S and has rallied since then. If this rally also lasts two and half months we should see some sort of a top (wave (3)?) in June.
Last year the SPX topped when QE1 ended (April 2010). QE2 ends in June 2011 so I think you can see the similarities here.
As posted a few times already my target for wave 3 is around 1430ish which should be followed by a sideways wave 4 and a fifth wave up to around 1470ish to complete wave (3).
Short term I'm not sure whether this is still a part of wave [i] of 3 or already [iii] of 3. Whichever count is underway though the 1330 area should hold. If we get a convincing break of this level then I'm probably wrong.
To sum up, as long as 1330ish holds I expect to see new rally highs in May most likely even a rally to above 1400.
I wish you a very successful month! ; )
