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.

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

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.

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