Elliott Wave Stock Market Update - May 10

Couple of weeks ago I stated "If the current bearish wave turns out to be a C wave and it equals Ax1.618 in length, we will see a test of the the 50 DMA around 2040". Once tested, the bottom left a bullish pattern. "The close sets up a potential small Inverse and Head & Shoulders that targets 2080 more or less". And today the market rallied to 2084 in what potentially could turn into a bullish 5 wave count. While the count could be a zig zag and another "sell off" could come, I am leaning bullish because of the long term and medium term trend. Still, I am not getting greedy so I sold half my longs for a decent profit and raising my stops on the rest to the Trend Average level. If the current wave can make it to 2100, we could see a set up that will challenge the all time highs.

And speaking of ATH, it's been a year since the market made it to 2134. The bearish way to look at this is that the market is still in a topping process. The alternative, which sounds more reasonable to me is that these last 12 months has been a sideways/time correction and there is now enough of a base for a LT W5 to complete. So perhaps we will have a very bullish summer if bulls can finally gain traction.

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

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.