Wednesday, October 6, 2010

Elliott Wave Update - October 6th

It seems like the market is positioning itself to another high. This rally has stretched the boundaries of an EW count that makes sense, so I will put what I think looks right once I get a better idea of what is going on. There is no point in drawing up different counts (that would be as good as flipping a coin) if unsure. But going back to the real reason of what we are going up, as long as there is the perception that the US has embarked on a deliberate strategy to devalue the currency and in the process create inflation, the rally will continue. What really matters this week (more than the job numbers) is what Trichet, the EU Central Bank President has to say about the Euro's appreciation. If he signals the EU is not worried, the market will continue to climb at the same rate as the Euro. Obviously, we will get a retrace at some point but right now the issue of monetary policy trumps economic recovery, jobs, etc. And I am sure in the end we'll find an EW that makes sense but at this moment the count is really in the hands of Benanke and co.

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