Friday, December 19, 2014

Elliott Wave Stock Market Update - December 19




















The market challenged its all time high as I expected in the cash market. But in pre-market, there was a new all time high last night, so there's a good chance we'll see more ATH next week with a Santa Rally. I still don't see any signs of a micro W4 and this could easily turn into what I call a "stand alone W3" given the momentum this rally is carrying. This week's rally is the strongest in 2 years and we could be seeing the start of a W3 at the intermediate level given the Inverted Head and Shoulders in place, so be careful with those shorts (that is if anyone is brave enough to be shorting this).

Also, I wanted to elaborate more on the long term pattern since it looks very likely now that the 2484 target might be reached in 2015. I didn't explain yesterday how I came up with the number but this is all based on the broadening triangle pattern, not on Elliott Wave. Basically, you subtract the low from the upper trendline and then add it to its break out point.
































At 2400-2500, market cap would be near or at all time highs relative to GDP and it would be a great time for a bear market to correct all the gains since 666. But one can never really be sure using Elliott Wave or fundamental opinions, so the best as I've always said is to follow the trend. Also, I should add the next bear market is likely to be a correction and not some catastrophic sell off as orthodox Elliott Wave calls for. Very long term counts (Cycles, super cycles, etc) are inherently flawed and should never be considered, much less traded. Otherwise, one would be stuck calling for a top every other week like Mr. Elliott Wave himself, Robert Prechter. Who has been calling for a top for the last 25 years and most recently in September in his "This is IT!!" newsletter edition.. I'm sure he'll be calling for a "point of recognition" again next week and the week after.. the man takes insanity to a new level.

Robert Prechter: Stock Market High Of Our Lifetime Was Hit Sept. 19th

Have a great weekend!


For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Thursday, December 18, 2014

Elliott Wave Stock Market Update - December 18




















If there was any doubt 1972 was a bottom, today's desperate buying should be a clue. The market has had the best two day rally in almost 2 years and chances are the rally will continue for the remainder of the month with or without a pullback to the Trend Average/2024-2034 level. Technically, I could label the micro waves from the bottom as a completed 5 wave structure but I lean towards seeing the all time high challenged on this wave.

Also, I was looking at charts from the past and I found this one below that I posted more than 2 years ago. Back then, I proposed the similarities between the patterns at that time and the correction that took place in the 1970's. Looking at it now, it seems obvious this pattern is going for its technical target of 2484. Back in 2012, not too many people were favoring a break out (most expected "Bearish P3") and the idea of 2484 sounded insane.. but it doesn't look so crazy now.






















End of 12 year Correction Update and Why this W1 might take out 1475

 

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Wednesday, December 17, 2014

Elliott Wave Stock Market Update - December 17




















The market seems to have found a bottom yesterday and now there is a diamond bottom pattern in place, so timing couldn't be better for a Santa Rally. Obviously, I want to see the Trend Average turn bullish before confirming the end of the correction. But so far it is looking good for the bullish case as it is going as predicted few weeks ago.

"If the market is going to behave "normaly", we should see decent bearish action very soon."

Where it gets trickier is in January, where we should see another correction after a new all time high? So far, all the excuses for the sell off have been meaningless but maybe we'll get something early next year that really scares the markets. Perhaps it will be Russia or Putin to be specific, given the extremely bad economic situation there at the moment. In fact, I wouldn't be surprised if Putin launches an all out invasion of Ukraine at all.

Also, I will attempt to chart the longer term waves this week and see where the market stands. Off the top of my head, I think we're in the final bullish multi-month wave which might coincide with the first actual rise in interest rates or even a mild recession that sets up Jeb Bush to win in 2016 (I think he wins it regardless).

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Tuesday, December 16, 2014

Elliott Wave Stock Market Update - December 16



The market had a volatile day, opening at a lower low, rallying 40 points and then having all those gains reversed and closing at a lower low. The closing wave should be the end of the zig zag or a W3, so we'll find out in the next session or two if the bottom is in or this is going to sub-200 DMA. I continue to lean towards a rally due to seasonality and the lack of reasons for a strong sell off, but obviously anything can happen. Oil seems to have found a bottom of a yet undetermined degree,  but if the initial counter rally is a W1 then we're looking at a mid 60's target. Which would be the excuse for a stock market rally.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Monday, December 15, 2014

Elliott Wave Stock Market Update - December 15




















The market rebounded early morning as expected but all gains were reversed and the 100 DMA/support at 1977-85 was tested in what seems like the end of the structure from 2055. Ideally, there should be another bottom before the end of the correction but the market could start rallying from here. The market has reached the oversold point where it has usually turned around in the last 2 years, so that's a signal to start preparing for a turn around. Also, despite oil continuing to sell off, prices have reached a multi-year support trend that will likely produce a big counter rally. Not that oil was the reason for the sell off anyway. Some people seem to have completely forgotten the market rallied almost 15% non-stop too all time highs in a few weeks while oil plummeted 25%. Now that oil is 50% off this year's high, I see crazy low forecasts for oil which if anything, it's a sign a bottom is near.





















I ended up selling my hedge in the 1990's and I almost bought oil. But since I am already long, I figure my long positions will benefit from an oil turn around so I am just holding equities. I am back to 100% long until other critical levels get breached, specifically 1977-85 and the 200 DMA at 1946. Also, one ETF I am keeping my eye on is RSX (Russia), once oil and the rubble stabilizes, you might see those shares easily double.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Friday, December 12, 2014

Elliott Wave Stock Market Update - December 12




















The market put in another bearish micro 5 wave count today to test the 50 DMA as I had been expecting when the daily MACD rolled over.  Today's wave could be another A of a zig zag or W1 of a W3, so the picture of the correction is not entirely clear just yet. The excuse for today's sell off was oil, but like I said yesterday, my guess is that a bottom is coming up very soon (which I might trade). The drastic drop in prices at the pump just translates into more discretionary spending so this whole thing is basically an excuse to sell. There is a study that was done by Barclays where they compare the additional discretionary spending vs the capital spending that would have resulted from oil co's companies. And the projection is an increase in GDP due to low oil prices. I am personally saving around $70 per month on gas (which is probably in line with the average driver in the US), so I am enjoying this price war between OPEC and Shale Oil.

http://www.hellenicshippingnews.com/low-oil-prices-may-boost-global-growth-outlook-barclays/

Anyway, I decided to sell half of my hedge at the end of the day but I was a few minutes too late. So I am holding to the entire hedge position over the weekend along with my longs. My guess is that we are seeing a double zig zag that will end next week, or just in time for a big Santa Rally. Last but not least, the now formed Inverted Head and Shoulders pattern on the daily targets 2267 so we could see a very bullish period if the pattern follows through.. never underestimate xmas/new years euphoria.

Have a great weekend!

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

Thursday, December 11, 2014

Elliott Wave Stock Market Update - December 11




















The market put in a decent rally early morning to almost test the TA again before heading back down. So far we have an ABC move completed, which could also be part a nested bearish 1-2 count. So unless we see strong selling soon, we will likely see the start of a new rally or a zig zag and then the start of a rally. With Oil now trading in the high 50's, odds are a bottom is getting close (for Oil) and sellers will need to find another excuse to sell. Also, we have to keep in mind that all that money consumers have been saving on gas, will likely end up being spent shopping and in turn provide a profit boost to major companies going into 2015. So chances are high we will get a strong end of the month and a strong January.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.