Friday, July 31, 2015

Elliott Wave Stock Market Update - July 31




















The 5 count on the charts seems to have been completed today at 2014 resistance and now we should see a retrace of the entire structure, so the correction is free to correct as much as it wants as long as 2064 does not get breached. If this completed 5 count is a W1, then we can expect the IHS target to be met at the end of the entire impulse. Also, I found a long term chart I had posted in December 2014 and this move might be the end of the LT W3.  Note prices have been falling out of the long term channel and combined with the weakness in industrials, we might just finally see the end of the bull run that started back in 2012.





















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.

Thursday, July 30, 2015

Elliott Wave Stock Market Update - July 30




















The market seems to be putting in a 5th wave to the counter-rally wave and today's close brings back the short term trend to the bullish side. I assume there will be a correction once this bullish wave is over and a higher low (higher than 2063) will set the market up for a bullish W3 to new highs on the SP500. There is continuous selling pressure pressure on Industrials but the NASDAQ seems to be headed to another high, so I guess they are balancing out each other.

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, July 29, 2015

Elliott Wave Stock Market Update - July 29




















Bulls have made a come back and now the market is back above its 50 DMA and the Trend Average. So far it appears like the recent correction was a zig zag, so if we see a 5 count develop on this rally then the market will be on the path to the Inverse Head and Shoulders I first mentioned on July 17th
Obviously, we need to see follow through buying in the next few sessions. The one weak spot in the broader market continues to be the DJIA, which has rallied in the last couple of days but remains vulnerable to a death cross.

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 = Bullish trend being challenged
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, July 28, 2015

Elliott Wave Stock Market Update - July 28





















The market did not put in a lower low and instead we saw the expected counter rally, which ended up closing the day a few points away from the Trend Average. However, pressure remains on the uptrend and the Trend Average must be re-captured soon in order to repair the recent bearish damage. Failure to trade north of 2,100 will result in recent lows being tested again. Looking at other indexes, most of the major markets are ok. But the DJIA is flashing a warning signal as failure to rally hard from here will turn its long term signal bearish, which we have not seen in more than 3 years.

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 = Bullish trend being challenged
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, July 27, 2015

Elliott Wave Stock Market Update - July 27




















The 2072 support level was broken early today and we might see the 2055 area tested on one more bearish wave. If we get a bearish 5 count then we could be looking at an A or a bearish W1, which would imply accelerated selling in the weeks ahead. I am still expecting bulls to come back but now pressure is mounting on the most recent uptrend and a new rally has to take place soon or else the market is at risk of rolling over.

The catalysts for the continued selling today was China and commodities. And I am assuming there will be ongoing turbulence for a while, so we'll see how equities will handle this in the next couple of weeks.

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 = Bullish trend being challenged
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, July 24, 2015

Elliott Wave Stock Market Update - July 24





































The market went into a much stronger correction today and closed at support, which eliminates the count I was following for the last couple of days. Instead, we are seeing what could be the potential Inverse Head and Shoulders I posted about last Friday

"At this point, we could see a correction to test the TA or even the 2072-84 area and see an Inverse Head and Shoulders form or a new all time high before any reversals.  The IHS would target 2,186"

If the IHS scenario is correct, the market has to start rallying early next week and the 2,044 low can not be breached. The Trend Average turns bearish with today's close and it must be re-captured next week before it goes back under the 50 DMA. It is a mixed market at this point, with tech correcting from all time highs while the DJIA trades under its 200 DMA. I lean towards bulls re-charging given the world economy but we could see the market go back into a correction again. We'll find out soon.

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 = Bearish
Medium Term Trend = Bullish trend being challenged
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, July 23, 2015

Elliott Wave Stock Market Update - July 23




















I wasn't expecting the low from yesterday to be breached but it gave way earlier in the morning. Still, I'm still assuming there's one more strong bullish wave left to new highs before a bigger correction. The current count would be eliminated if the market goes below the W1 peak of 2,083.74. The close was right on the 50 DMA and below the TA. If there's a 5th left, we should see a rally as soon as tomorrow.

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.

Wednesday, July 22, 2015

Elliott Wave Stock Market Update - July 22




















The market tested its Trend Average early morning and had a good chance to test its 50 DMA but didn't get very close despite the overall bearish sentiment on APPL earnings (which actually exceeded estimates!). Considering how weak this corrective wave has been, I've changed the labels to reflect a potential 5th wave to new all time highs in the next few sessions. As longs as the TA holds, the path of least resistance is up.

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, July 21, 2015

Elliott Wave Stock Market Update - July 21




















The market started to correct itself and I am assuming we will see the 50 DMA tested. But given the potential IHS, we could see the market get all the way down to 2072-2084 support to form the right inverse shoulder. If support is found at the 50 DMA, there's the possibility of another leg to new all time highs before another substantial correction. The intermediate term trend has turned bullish, so all signals are clear for a rally. What remains to be seen is how the correction evolves in the next couple of sessions.

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


Short Term Trend = Bullish
Medium Term m 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, July 20, 2015

Elliott Wave Stock Market Update - July 20




















The market broke 2,129 resistance and made a higher high but fell short by just couple of points of making a new all time high. Looking at the structure, we could see the start of a correction to the 50 DMA or the TA as soon as tomorrow. Also, there's a reversal pattern on the NASDAQ (which closed at another all time high today) which has been leading the rally. But again as I posted a few days ago, if W1=W5 then we get 2,142 and that would imply a short covering rally, so this might not be over just yet.

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 trend being challenged
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, July 17, 2015

Elliott Wave Stock Market Update - July 17




































I posted the following almost 3 weeks ago which basically summarizes the current rally:

" Looking at some oscillators, this market has already been in a correction for 6 weeks and it is at a point where it could start a substantial rally. So while trends are bearish and further downside can be expected , it's good to keep in mind we could see a substantial bullish turn because technical oscillators have been reset."

The market ended up bottoming at that time and today the market reached the first price target which was 2129. At this point, we could see a correction to test the TA or even the 2072-84 area and see an Inverse Head and Shoulders form or a new all time high before any reversals.  The IHS would target 2,186 but in a way it doesn't really matter as chances are the market is headed there anyway in my opinion. The market almost rolled over on this last correction but it still wants to keep going and while we can continue to expect corrections, I don't see a bear market until we get the next recession. Perhaps if Hillary gets elected we'll get one, given her populist anti-corporate rhetoric. Obama has not exactly been the most pro-business President but he doesn't seem anywhere nearly as bad as a Hillary. I wish there was a pro-business candidate who doesn't come across as a right wing nut or a clown. Then again, you don't win elections appealing to intelligence.

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 = Bearish trend being challenged
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, July 16, 2015

Elliott Wave Stock Market Update - July 16



















The market has continued to rally and so far it looks like the 5th wave of the structure that started on July 6th. Technically speaking, the wave is free to go into correction as we have 5 waves on the charts. But if we take W5=W1 then 2,142 or basically a new all time high. I guess it will depend on a combination of bullish momentum and short covering in the next session or two. Also, I'm assuming the NASDAQ will make another all time high tomorrow given Google's numbers, so it's probably safe to say there is more upside remaining to this rally in the short term.

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 trend being challenged
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, July 15, 2015

Elliott Wave Stock Market Update - July 15




















The market has continued its rally as expected and I get the feeling the 2,130 resistance level is going to be challenged in the next few sessions. It will depend on whether the W4 is complete or go into a zig zag. But if W5=W1 and today was the low for W4, then we get a new all time high before a correction to test the rising Trend Average. Also, earnings announcements have been strong, especially banks. So we could see a broad based rally to substantially higher highs in the next few weeks.

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 trend being challenged
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, July 14, 2015

Elliott Wave Stock Market Update - July 14




















The market has followed through on its rally as expected and now trades above its 50 DMA, which if sustained will turn all trends bullish again. There is also a bullish crossover on the daily MACD and that favors new all time highs in the coming weeks. And while we need to see new highs to confirm the correction that started in May is over, there's a higher chance of a rally now that all the issues that were creating uncertainty in the past few weeks appear to have been resolved.

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 trend being challenged
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, July 13, 2015

Elliott Wave Stock Market Update - July 13




















The market was right in pricing in a favorable outcome over the weekend on Greece's bail out request and we got a substantial rally as expected. The Trend Average has turned bullish and the next important level to overcome is the 50 DMA at 2,100, which was tested today. Looking at the waves, I am labeling the current rally a W3 so it has plenty of room to go before any significant pullbacks. Trade under 2083 invalidates the 5 count but I doubt that level will be breached until the count completes. A possible target for the entire structure is 2,129 or a slight higher all time high based on the waves printed so far.

The bigger question is whether this is the beginning of a multi-week rally. As I said last week, as long as the 2039 was respected, the market had enough of a correction to start rallying now. And now that there are favorable news over Greece, a stabilized China and likely deal with Iran, bulls might just make a big run from here. I think this administration has not been exactly the best as far as foreign policy (not that the previous one was any better), but the deal with Iran makes a lot of sense. By allowing Iran to regain power lost to sanctions, it can serve as a counter-weight to the Jihadists in the region. The ideal scenario would be to unleash all those Iranian Shia militias on ISIS and let them sort it out. That way the US can finally step back for good. Just think what all that money spent on chasing imaginary weapons and "liberating" that area of the world (Arab regions in particular) could have done if it was spent right here on tax cuts, infrastructure, etc. I hope whoever gets elected next year will be better than the ones on the news lately.

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 trend being challenged
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, July 10, 2015

Elliott Wave Stock Market Update - July 10




















The market avoided testing recent lows after strong gains in Europe and China overnight. Looking at waves, there are couple of different scenarios that might unfold and my guess is that it will depend on EU's decision over Greece. The close today was comfortably above the Trend Average and markets in Europe seem to be pricing a positive decision, so we might see a very bullish Monday if recent issues get resolved. After 2 months in a correction, bulls are like bored children in a house waiting for someone to let them out to play. Obviously, if there's a negative result from the EU, we will see support challenged and most likely broken. Unfortunately, waves can not predict actual events, so we'll just have to enjoy the summer weekend and hope for the best for our portfolios on Monday.

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 = Bearish trend being challenged
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.


Thursday, July 9, 2015

Elliott Wave Stock Market Update - July 9




















The market rallied again towards the Trend Average today but it reversed right after testing it. We might see a 4th challenge to support in the 2040's tomorrow looking at the short term chart and whether this area breaks will depend on the news driving the markets. I suppose if China stabilizes (there's a bottoming pattern in place) and Greece's economic reform plans is well received by the EU,  the correction that started in May might come to an end. However, if these issues in the background are not resolved, I think selling will accelerate.

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

* 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, July 8, 2015

Elliott Wave Stock Market Update - July 8




















This is the third  attempt at breaking support this week and with a little help from Greece (and now China), we might just see that Head and Shoulders complete. But so far every low has been a slightly higher low in an oversold market and we might get a decisive move by the end of the week. Perhaps once the uncertainty over Greece and the stock market in China is done, we'll finally see the end of the correction. At least with Greece, we'll know by Sunday. China on the other hand is another story as it might continue to go lower due to panic selling.

There has been a lot of media attention on China's market lately, specially now since it looks out of control. But the low yesterday was actually right on its 200 DMA and barely above its W1 label of 3,404, so there might be an equally out of control rally if these levels holds. But I wanted to write about the bigger picture of the Chinese market since I've been fully invested in it for years. It might seem irrational to invest in a slowing communist economy and specially now since it seems obvious to almost every writer that it is a "bubble". But I think it remains undervalued and underestimated, even by their own citizens.

First, I wanted to make clear that I am invested in Chinese stocks because of their value so I am a "buy and hold"  investor and not a trader. Secondly, I view stocks as ownership of a business and not as a way to speculate like I do with oil or volatility. Lastly, I believe there is an undeniable correlation between the size of an economy and the size of its stock market.

To make my point,  I'll go back all the way back to when China created its stock market back in 1990 when the SSEC started trading at 100. At that point, China's economy was 1,877 trillion RMB (302 billion in USD). In the last 25 years, China grew fast at a rate of about 10% a year and as of last month its economy stood at about 67,000 trillion RMB or 10.8 trillion USD which translates into a multiple 35.7X the size of its 1990 economy of 1,877 trillion. If we use that same GDP multiple to what the SSEC started trading at in 1990, we get 3,570 and that compares to the now "crashed" market which closed at 3,506 yesterday. So on average, the stock market in China has grown about 1:1 to its GDP growth rate as of today. The issue however is company profits don't grow at GDP growth rates, larger companies are able to grow profits faster than GDP because of economies of scale and the fact that Chinese companies have benefited disproportionately from globalization. But this trading premium is not being reflected yet on its markets, which makes them undervalued. Obviously, what that extra premium is, is the million dollar question. To get a better sense of what the possibilities are, I broke down the numbers for the US economy and its markets. During the same period, the US grew its economy from 5,979 trillion USD in 1990 to 17,701 trillion USD today or a multiple of 2.96X. The S&P 500 closed 1990 at about 325 and today it closed at 2046 or multiple of 6.29X or basically more than double its GDP growth of 2.96X. If the S&P 500 reflected a 1:1 ratio like China, it would trade at 962 today. So that premium from economies of scale and globalization is obviously present in the US, whether the market is overvalued in the US is another question but if China were to trade at the same premium, the SSEC would be trading at 7,586. Which would parallel the Domestic Market Cap to GDP ratio of the US at 130%.

So, despite all the drama and volatility in China, things will eventually settle down and the bull market will continue again as its economy continues to grow. This is the same exact reason I've been saying the US market will continue to go up as long as there is GDP growth and why traditional Elliott Wave Theory provides wrong assumptions in very long time frames. It's common sense to me, as the numbers show.

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

* 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, July 7, 2015

Elliott Wave Stock Market Update - July 7




















A lower low appeared today in the cash market to complete the count posted. However, it is technically a re-test of the lows from Sunday and it could be counted as a B wave or a bullish 2 since it made a higher low. I should get a futures market chart and label it but I am lazy today plus the outcome is the same, so we'll just go with the cash chart for now. The current bounce is testing the Trend Average and it has the potential to re-capture it. If the micro count is a 1-2 set up, the target is 2111. But if the sell off is going to continue, the 50 DMA at 2102 might be tested at most before another wave down. All eyes continue to be on Greece and I guess that could provide the catalyst for the end of the correction and a multi-week bullish run. Like I said yesterday,  trends are bearish but the pressure is now on bears to break 2039 as time is running out.

China just opened now almost -8% and it might finally test its 200 DMA, maybe the drama will finally end there. This makes me wonder if anything like what happened in China could happen in the US in that there was no topping process at all, it was just a -33% wave immediately after a 7 year high. The equivalent would be the SP500 falling to 1400 after making a new ATH in just over 2 weeks on no news.

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

* 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, July 6, 2015

Elliott Wave Stock Market Update - July 6




















Hope everyone had a good weekend. I think a lot of people were expecting the market to crash today after the NO vote in Greece to EU bailout terms, but the market was able to deal with it surprisingly well. We can't see the bearish 5th wave in the cash market but the equivalent of 2040's was tested during the initial reaction when futures opened on Sunday, so for all intent and purposes we are looking at a bounce or even the initial stages of a multi-week rally. As I said on my post last week, while the recent low was expected to be tested (which it did today), the market has been in a correction since May and it is at a point where there's enough of a base for the market to start rallying to new all time highs. There has been quite a bit of damage to the major trends and we have to keep in mind the Head and Shoulders pattern targeting 2000 but if 2039 keeps holding, there will be new all time highs before 2000. I was expecting more of a price correction when it started in May but this has turned out so far into a time correction. If there is a time for bears to make lower lows is this week, time is running out.

I added more to my China positions today with some money I had saved up recently. That market has not been this oversold in 5 years, so it's not a bad time to add. And while I think a bottom is near, nothing is for sure given the huge price swings. I just hope it gets to 5,500 on the next leg up.

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

* 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, July 2, 2015

Elliott Wave Stock Market Update - July 2




















The market made a slightly higher high today but there is still no clear indication of whether it is a start of a bullish W3 or a corrective Zig Zag. One could argue for a bullish nested 1-2 or a micro Head and Shoulders forming. Perhaps we will get a better idea after the Greece situation is decided once in for all after the referendum on July 5th. Going by trends alone, pressure is on the bulls to re-gain lost ground, so if the TA is not re-captured on the next attempt we will likely see further downside.

I'm not holding anything except for my long term portfolio. I just hope I am right on a 5th leg coming in China, otherwise I'll have to wait for a few months before another big rally comes. Either way, I'm not sweating it.

Happy 4th of July!

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

* 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, July 1, 2015

Elliott Wave Stock Market Update - July 1




















The market continued its bounce as expected but I'm not certain there is enough momentum to reach the TA just yet. Anything less than a bullish W3 tomorrow will end up with the most recent low or the 200 DMA being tested, which in turn might lead to further selling. Looking at some oscillators, this market has already been in a correction for 6 weeks and it is at a point where it could start a substantial rally. So while trends are bearish and further downside can be expected , it's good to keep in mind we could see a substantial bullish turn because technical oscillators have been reset.

http://www.ewaveanalytics.com


Short Term Trend = Bearish
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.