Thursday, August 27, 2015

Elliott Wave Stock Market Update - August 27

The market rallied easily past resistance today and confirmed the the double bottom. However, the long term trend turns bearish today and this is the first time it has done so since 2011. Most visitors to the blog have only known the system I use as a "bullish" system but from now until that long term trend turns bullish again, every rally will be viewed as a counter-trend rally. And it's not that I am personally bearish or bullish, the trend system is there to provide us with situational awareness. Not knowing what the major trends are doing is like going sailing without first checking the weather and wave conditions. With that in mind, the first leg of the counter-rally seems to be nearly complete and I'll assume it's part of a B wave that might go all the way back up to challenge the 50 DMA. Now that China seems to be stabilizing and oil has confirmed a bottom, the focus will be on the Feds and their meeting won't come for another 2 weeks. So, stability might elevate the market for a while before another downturn.

And speaking of oil. There's a very good chance the counter-rally will go back up to test its downtrending 50 DMA currently at $49 (WTIC). I actually issued a recommendation just yesterday on oil on the EWA site and it rallied 10% today.

"Oil has finally shown a potential reversal pattern after declining without much of a break for almost 3 months. Aggressive traders can open long positions with $37.75 as the stop loss. Odds favor a strong counter-rally given how oversold Oil is at the moment."

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit

Short Term Trend = Bearish
Medium Term Trend = Bearish
Long Term Trend = Bearish

* 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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