Friday, October 24, 2014

Elliott Wave Stock Market Update - October 24




















The market refused to pullback today and instead it went for a test of the 50 DMA and it is now very close to its 1970-1977 resistance level, which is within range of the second Inverse and Shoulders target posted early in the rally. If the market intends to rally for the rest of the year, we might see the market put in a neckline around these levels and pullback to 1925 and then mount a huge rally to 2120 more or less on yet another IHS. I am sure some people will find it hard to believe it, but the technical background supports it. The requisite for this potential rally is the recapture of the Medium Term Trend. If the market fails to hold the 1925 support level and most importantly the 200 DMA on the coming pullback, then we will probably get what will most likely be a C wave to test the 1821 low.  Looking at the fundamental picture and some of the media headlines, the issues that were a problem a few day or weeks ago (when the correction started) like Ebola, Russia, oil, and Europe seem to have been sidelined. But the bottom line remains, Europe is near zero growth which might prompt them to do their own version of QE. The US and China continue to grow substantially, adding between only these two countries $1.5-1.7 trillion worth of GDP this year alone. So the background picture favor the bulls in the intermediate term. The only factor that I see favoring bears is the market might need more time to consolidate gains from the last 2 years.

I am going to short to hedge at resistance if the market gets there or add longs at the 1925 level/Test of the TA, which ever comes first.

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 = Bearish
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, October 23, 2014

Elliott Wave Stock Market Update - October 23




















The 1925 level was not breached and as I expected the market continued to rally towards the 50 DMA, making a high at 1961 before reversing some of its gains. Technically speaking, we can call the entire structure complete at this point since there are 5 waves in place. But this last leg could extend to 2015 if it subdivides into 5 waves or a bit lower if it goes into an Ending Diagonal pattern. Also, since it is short term overbought at this point, a pullback to test the Trend Average to consolidate gains and then go towards new all time highs looks very possible.

I missed the chance again the chance to add longs (should have done it yesterday) since the market gapped up. But I'll add longs if we get that TA test or go short to hedge if we get more upside, specially a micro 5 count/ending diagonal. The financial media seems to have forgotten all the scary issues from last week after a 140 point rally. But once they start justifying the current rally with whatever reason they come up with next, it will be time to be cautious on longs. It's obvious by now the media is always once step behind.

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 = Bearish
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, October 22, 2014

Elliott Wave Stock Market Update - October 22




















The market took a break today on what seem like a W4, so I'm assuming there will be a Zig Zag or a Triangle before another bullish wave to a higher high. It would be good if the market corrected all the way to 1912 (so I can add longs), but 1925 would have to break first which is questionable at this point. Some people are worried about oil again as it has set new lows, but I think it will ultimately test $77 as I've been projecting for over a month before oil was on the radar. And again imo, lower oil prices just means more money for people to spend. Lastly, the Trend Average has now turned bullish and the daily MACD has made a bullish crossover so new highs are a probability in the coming weeks if the TA and the 200 DMA holds.

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 = Bearish
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, October 21, 2014

Elliott Wave Stock Market Update - October 21




















The market has comfortably reached the first Inverse Head and Shoulder's target of 1924 and it looks like it is going for the second target of 1978. And now that 1926 was taken out and the market trades substantially above the 200 DMA and the Trend Average, we can now see that 1821 was an important bottom. And despite the 100+ points rally from the bottom, the daily MACD has not ever made a bullish cross so this could easily be the start of a bullish wave that will go to substantially higher highs. With that said, this bounce to this level could still be a B at the intermediate level and then see a C wave that will test the 1821 low. But as it is, there is an ABC pattern to 1821 from the top.

Now that the environment has turned bullish, I am starting to see new reasons on the media of why the market is rallying. But the real reason imo that nobody talks about is the market had been correcting for almost a month already and bears had been running out of time to make their case. And as I've stated many times in the past few years and during each one of the corrections, as long as the economy is growing, there will be profits and that will keep the market going up. It's interesting to see how people are gripped by what I think is irrational fear every single time there is a correction. Then again, if we didn't have scared people running around, there wouldn't be a market.

I missed my chance to add more longs this morning as the market was way above my target buy range by the time I woke up. But I have the longs from yesterday and I am now looking at the 50 DMA/resistance to go hedge longs.

We will be making trade recommendations this weekend on the EWA site. For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish trend being challenged
Medium Term Trend = Bearish
Long Term Trend = Bullish trend being challenged

* 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, October 20, 2014

Elliott Wave Stock Market Update - October 20




















The market was able to break above the 1898 resistance and closed just below the 200 DMA. The short term oscillators are overbought, so we could get a pullback to support before another bullish attempt on the 200 DMA. The market closed over the Trend Average, but since it is down sloping, I think it will take couple of bullish closes to turn the trend bullish. For now, the market looks stable but the real test will come at the pullback. The level I am paying attention to is 1877, if that holds then I think the market could get very bullish. I went partially long today on China shares and might add SP500 on a pullback using 1877 as the stop.

We will be making trade recommendations this weekend on the EWA site. For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bearish trend being challenged
Medium Term Trend = Bearish
Long Term Trend = Bullish trend being challenged

* 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, October 17, 2014

Elliott Wave Stock Market Update - October 17




















The bulls were able to regain some territory again today and so far it looks like the market wants to go for the IHS posted yesterday. However, another formed today (which is a bit easier to trade) that targets 1978.  Given how oversold the market has been, I wouldn't be surprised to see this high target met. The resistance levels are clear if the market breaks out, there are 1912, 1935, 1970. So I will hopefully buy on a break of 1898 and trade the IHS keeping in mind the resistance levels and the 200 DMA/TA. Now, the market can still be in a W4 wave and prices could go up to 1925 and still keep the bearish 5 count valid but that is not looking likely so far. Yellen hasn't given any hints of what the Feds intend to do yet, but I suppose if they delay tapering then it will be used as an excuse to continue the rally. In the overall scheme of things, earnings is what will support the market and that's technically what people should be focusing on.  And so far reported earnings are looking good.

Have a great weekend!

We will be making trade recommendations this weekend on the EWA site. 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 = Bearish
Long Term Trend = Bullish trend being challenged

* 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, October 16, 2014

Elliott Wave Stock Market Update - October 16




















We had a much less volatile market today and there is even an IHS targeting 1924. However, we could still see one last leg down to test the 1814 area, so the market is not out of the woods yet. If the market breaks out tomorrow in a bullish W3 then that could signal a bottom for the entire correction, but it's best to be cautious given the manic depressive mood of the markets. I am on the sidelines but might consider trading that IHS if it materializes.

Also, per my post yesterday:

So the second there is even a suspicion of anything that might affect profits, you will have smart people in charge of economic policy make sure those profits keep coming in. A good economy for a government is not a luxury, it's a matter of self preservation. 

There are now "surprise" rumors about a continued QE program given the potential deflationary pressures on the US economy. So all eyes will be on Yellen on Friday to see if there are any signals that confirms the rumor. And again, contrary to some of the headlines of a "Hand out from the Feds" to the markets, this is an issue of making sure the economy keeps growing so those profits keep coming in so they can be taxed! What I posted about yesterday was not meant to be critical of the government, it was meant to point out why the way government works favors people who invest in business assets. To be very specific about what I am talking about, of $1 in profits generated by a public corporation, 35 cents goes to the Fed government in taxes, which leaves 65 cents. Out of that 65 cents, it gets taxed again when it gets distributed to shareholders at 20% more or less plus in my case (California resident) another 13% in state taxes. So, from $1 of profits generated, close to 60% goes to government! So technically speaking, the government should be interested in the company doing well more than anyone else. In the working world, I can only think of one profession that takes more than 50% for the privilege of doing business. And this of course doesn't include all the other taxes a company generates in income taxes from its employees and all the other etc taxes. So you see, while the government might screw up here and there, it is always watching out for itself as it is a money hungry beast by design. All those bailouts in 2009 were not meant to "Help Wall Street" as the public likes to complain about, those bailouts were meant to keep Cash Cows alive so they can keep producing. And the byproduct is the employment for workers and a general sense that the economy is doing ok. So next time we get another financial crisis and you see the government singling out companies to bail out, the best thing one can do is follow the government money as that might just make you very rich.

We will be making trade recommendations this weekend on the EWA site. 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 = Bearish
Long Term Trend = Bullish trend being challenged

* 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.