Things got interesting last night as the market went down as much as 15 points. But the market bounced back after Europe opened and then started a rally at the open in the cash market. Technically speaking, the wave in the cash market is the 5th wave I was calling for yesterday. However, if we account after hours, the pattern did top yesterday and a W2 correction took place before the market opened today. So we could one of those "stand alone W3" patterns where the W2 is absent. Elliott Wave theory doesn't account for any of this, so this is just my own labeling. If the wave from 1980 to 2050 is a W1 of a 5 count, then we're looking at a target of 2150.
Oil rallied as I expected today in what should be a C or a W3 wave and that allow me to set my stops to break even on USO. A continued rally or at least stabilization in prices will lend support to a stock market rally. Also, bulls could seize the jobs report tomorrow as an excuse to break out. A bad number will translate into a weak dollar, which will favor earnings. A good jobs number will push oil higher, so technically it's a win/win situation for equity bulls. With that said, the 2064 level needs to be cleared to solidify the bullish case.
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Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged
Long Term Trend = Bullish
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