Monday, February 8, 2016
Elliott Wave Stock Market Update - February 8
As stated last week "Given how this support level has been tested 4 times, any break could lead to a decisive move down.". The market was not able to hold above the 1872 neckline of the H&S and selling accelerated as expected. The market did manage to make a relative strong bounce but as long as 1872 doesn't get breached, there is a good chance of another sell off to another lower low. There is good support at 1812-1820 but if this level breaks, then we have the 1797 H&S target and ultimately significant support at 1737. Sentiment is obviously bearish but as I said on Friday, the economy is not. So we could see a strong turn around once extreme bearishness is reached.
Anyway, the stock market being bearish is not really big news as anyone on this blog should know the market has been on a downtrend for few weeks. What is news (at least to me) is the outcome of the Republican race for the nomination. After watching last week's debate, I've decided I will vote for Gov Christie or John Kasich if they end up winning the nomination. It's a long shot that either one will be able to beat the Donald or the ultra right-winger but I feel these two candidates are the most competent ones. Donald was surprisingly good at the last debate but it is still Trump! Cruz seems dishonest, on top of his ultra-right views. Carson is not winning and neither is Bush. And Rubio, the one that seemed like was going to get the establishment vote has turned out to be a robot. I don't think I've ever seen a presidential candidate do that bad in a debate. It's almost as if Rubio (despite his large ears) couldn't hear what Christie was saying, he kept repeating himself over and over on Obama and saying the same lines programmed into his brain over and over by his handlers. This is a must watch:
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 = 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.