Friday, April 24, 2015

Elliott Wave Stock Market Update - April 24




















The market made a marginally higher high today and it looks like new highs will be coming early next week as well. There's an ascending triangle that targets 2128, so perhaps we'll get a solid break out early next week.  The NASDAQ also made a substantially higher closing high, thanks in part to Amazon which rallied 14% after their announcement yesterday. So sentiment going into the weekend is bullish and will continue to be bullish next week.

Now, speaking of Amazon. This is one of the very few companies I would be comfortable holding long term if it ever goes down. Despite the fact that they don't seem to announce profits much, they are technically very profitable but keep investing money in growing revenue. And on that benchmark, Amazon is a behemoth at $90 billion per year. Apple which is almost 4x as expensive going by market cap, grosses $200 billion. Eventually we will see profit margins at AMZN approach those of major tech companies and its stock could easily double or triple from today's close. So if there's ever another big crash, this one will be on my shopping list.

Lastly, I wanted to share the following graph which I found interesting. This is from an article on forward PE (not to be mistaken for trailing PE) and historical returns. Going by this, history is definitely not on the bearish side.




















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.

Thursday, April 23, 2015

Elliott Wave Stock Market Update - April 23




















The SP500 finally broke resistance and was able to reach a new all time high. Also, the NASDAQ closed at an all time high, 15 years after the dot com bubble. Now that bulls are back in control, I expect new all time highs before another substantial correction. Hard to say if the market can build up enough momentum to reach 2,200 but the IHS target of 2,148 looks attainable. Also, oil seems to be resuming its rally and this provides support to the broader market. This is a market that doesn't really want to go down and despite opinions of this being a "bubble", the fact is that forward PE for the market is not unusually expensive at 17. I am sure there will be bigger corrections to come but until there are true signs of an economic slowdown, higher highs are almost a given.

I closed my VXX position at a loss and I'll buy back again if the IHS target is reached. I also added oil yesterday in after hours and I am expecting $60+ in the near future, in fact oil might even reach its 200 DMA trending down around $70.

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.

Wednesday, April 22, 2015

Elliott Wave Stock Market Update - April 22




















The market remains in a tight trading range. While the bias and the pattern is bullish, I need to see the 2011 level cleared to be confident of a sustained rally. Today is the fifth time this resistance level is tested in couples of weeks, so hopefully the market will make up its mind by the end of the week. I am continuing to hold VXX which basically looses money by the minute but if we get a bullish resolution, I can get rid of it and buy it back at the IHS target. The good thing is that my longs continue to do very well with all the mania in the Chinese market, I'm at 90% of my goal so I am getting very close. There is an immense opportunity now that it is going up and eventually when it crashes down.  The last time I saw this type of mania was in bitcoin couple of years ago, powered incidentally by the Chinese market.

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.

Tuesday, April 21, 2015

Elliott Wave Stock Market Update - April 21

















The market gapped up earlier in the morning today and came close to the 2011 level I mentioned yesterday before going back below 2100 and closing barely above the Trend Average. A triangle pattern looks to be in play and there should be a break out as soon as this week. There's also a good potential for an Inverse Head and Shoulders that targets 2148 and we'll see if there's enough left in the tank for bulls to start a rally as soon as tomorrow. As it is, I rather be on the defensive given the lower highs and the breach of the lows last week  so I'm holding on to my VXX until there's a decisive bullish move.


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.

Monday, April 20, 2015

Elliott Wave Stock Market Update - April 20




















The market bounced today as expected but until 2011.91 gets taken out, today's wave remains a counter-rally. I haven't tried labeling the intermediate waves to avoid confusion as the market continues to be in what seems like a triangle. But we should see a decisive move either way sooner than later. I am maintaining my position unless there are clear signs the market wants to break out of range.

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.

Friday, April 17, 2015

Elliott Wave Stock Market Update - April 17




















I wasn't expecting the market to sell off and break 2083 as it did today. But then again, the waves were looking suspicious because of lack of bullish momentum. Given this seemingly range-bound market, I suspect there's some sort of triangle at the intermediate level taking place which will end up breaking very soon. And considering the long term trend has been bullish for over 3 years and the bearish MACD cross on the monthly time frame, perhaps this is finally the time for the market to take a break and make a 10% correction if not a bit more. Strength in oil and general economic conditions (which IMO are fairly ok) will make any sell off in the stock market a consolidation phase before another sustained rally to new highs. So maybe "Sell in May" came couples of weeks sooner?

One of the causes for the sell off today was the curbing of margin trading in China, which in recent weeks has been going up like no tomorrow or 13% in 2 weeks to be exact. Just last month ago I was at 70% of my retirement goal, yesterday's close put me at 87% of my goal. The rise has been so fast, it has exceeded my own best expectations or any possible wave count (I'm actually in disbelief how fast this has happened). So maybe there will be a sell off there to consolidate before going much higher, which will coincide with a world wide correction period that includes Europe as well.




















I ended up closing my oil position for a profit and bought back my VXX from last week. I expect a bounce early next week in stocks but I think it's time to start betting for another change of trend.

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 trend being challenged
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 whipsaw

Thursday, April 16, 2015

Elliott Wave Stock Market Update - April 16




















The market didn't do much today other than reset some of its short term overbought oscillators. I broke down the recent bullish waves and they are 5 count waves, so my assumption is the market is consolidating before launching a stronger bullish wave as soon as tomorrow. The correction could continue but the downside limit is 2083.24, price action under support would indicate more selling ahead. But as I speculated a few days ago, the break out in oil is lending support to the market so continued strength in oil will help stocks reach new highs. And apparently, it's no longer speculation but one of current themes:

http://www.cnbc.com/id/102592048

Obviously, higher oil prices is not better for our economy but Wall Street needs an excuse. Maybe we might just have another "Sell in May" event this year after there are no more excuses left to rally. Hopefully, I will be picking up the VXX I sold last week (which is down almost 10% from when I sold it already).

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

Have a good weekend! 


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 whipsaw