Stock Market Update - May 9

The market came close to the 50 DMA before bouncing back and if the scenario I posted yesterday is correct then we should see another wave down to complete the zig zag or a bullish leg to 1880-85 that gets reversed again to test the 1859 level. The alternative is the low today was a W2 and we will see the beginning of a bullish W3 that will break 1885-90 for good on Monday or Tuesday. The market closed under the TA again but since the downside has been so limited the TA is still rising so there is no change in that signal yet.

I sold the longs I bought yesterday again toward the close of the day and but I am staying hedged unless I see the market trade above the Trend Average. These sideway moves are hard to nail so the best thing is to "buy insurance" through hedging. I think the market is approaching a significant turning point soon, as in a bearish turning point so whatever profits I make from the long side will be used to build a short position. The daily MACD is about to turn negative and any more failed attempts at taking out the all time high will give way to selling so I am getting ready.

Last but not least, I am announcing a new site which I am a partner of. This site has multiple analysts collaborating to come up with a consensus on where the market is going next. So it takes into account my trend analysis, Elliott Wave counts of larger degrees and Algorithms which are not published anywhere. The site is http://www.ewaveanalytics.com and I welcome any feedback or questions you might have on it.

Have a great weekend and Happy Mother's Day to all the trading moms!

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. 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.

  

Stock Market Update - May 8

The market rallied as I had expected but the reversal at resistance raises some doubts. So I am posting the 2 hour chart to "zoom out" and look at how I am counting this at the intermediate time frame. Basically, There is a proportionate 5 wave impulse from the 1814 low after an ABC correction. We got another ABC at a lower degree and today we were supposed to see a W1. However, today's wave failed to meet my minimum standard as far as wave structure goes in relation to a W1. So I am inclined to think we saw another zig zag for an X wave with another ABC move coming. And since the high today was very close to the 1891 high from a few days ago, another proportionate ABC move should put the market in the 1850-59 area. I will be looking out for a 50 DMA bounce if the bearish wave from today continues early morning, with that being the A wave.  If the marker bounces towards 1880 with no further downside then that should be the B, with today's low as the A.

I sold the longs I had from yesterday at the 1885 resistance so that turned out well. And after seeing the market turn back and close slightly under the TA, I bought back a small long position and VXX to hedge it. I will go all long again when key support gets tested again or sell the long position I bought today at 1880 more or less.

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. 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.

Strong Rally Might Be Coming

The market went for the 1859 support early morning and it rallied from there as I had expected per my post yesterday. The waves have been difficult to label lately due to all the overlapping waves, however I think we now have a clear ABC on the micro count that favors an impulse rally to 1900. Just as I had speculated on a perfect ABC to 1812 few weeks ago and where the market started its current rally, I see the same exact pattern from the 1891 high at a lower degree. The A leg is exactly the same as the C leg and the bounce looks impulsive, forming a micro Inverse Head and Shoulders than targets 1892. But obviously, this count needs confirmation in the next session or two with either a gap up or a strong bullish reversal without breaching today's low. Lastly, the market recaptured the TA so let's see if we finally see some bullish follow through.

I added longs near the lows so I am now 100% long again. I would have gotten a better price if I had been awake when 1859 was tested but I was busy dreaming of Lana Del Rey.. literally.


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. 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.

Closer Under Trend Average

The market failed to gather strength to rally as I had been expecting and instead it ended testing yesterday's low. It remains to be seen if the market will test the 50 DMA at 1864 or even the 1859 support level, however the market remains in a bullish set up as long as 1850.61 holds as a low despite the close under the Trend Average today. I am expecting a stronger bounce tomorrow but if that fails then it will be time to get defensive, specially at a bearish turn of the Short Term Trend.

I ended position trading my longs and I sold my hedge at the end of the day. Hopefully, we'll get a better picture by the end of the current wave.

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. 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.

Stock Market Update - May 5

The market decided to test the 1870 level as I imagined on Friday's post and the market didn't even blink eye before rallying back to where it started. So per my statement;

"retrace back to at least 1870 and form a base to attempt another rally to take out the all time high once in for all"

I think there will be another challenge to the all time high again tomorrow unless something really bearish happens overnight. The patten as I've said before is bullish and trends continue to support higher prices. I am however keeping an eye on a possible rising wedge as you can see on the chart so any reversal at the top trend could set the market up for a sell off. A breakout of the trend would imply this is a nested bullish 1-2 set up.

My original plan was to sell my hedge at a low today but I was sleeping when the market was the low level and too high by the time I woke up. So I am keeping the hedge just in case as it's not that big of a position and I am looking to sell my longs from last week at the trend or at the end of a 5 count if that's what the market is planning to do. Last but not least, the ISM report is strong so I suspect whatever summer correction we get might be just to the 200 DMA.


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. 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.

Stock Market Update - May 2

The market made an attempt at the all time high but it was reversed despite seemingly solid employment numbers. The waves are choppy but it doesn't mean they're bearish since key levels have been holding and one could make an argument of a sideways/time correction after the rally from 1850. So my guess is Monday we should see a move out of the recent range and start rallying or retrace back to at least 1870 and form a base to attempt another rally to take out the all time high once in for all.  We still have the Russian issue in the background but as I said last week, Putin will take its time to make his moves so this will drag things out. Other than that, it is May so unless this year turns out different to others we might see highs but the summer correction will start in the next few weeks and so will the Int LT W4 that was supposed to start back in November at 1790. The bullish signal on the Long Term Trend has been in place since February 2012 so the market could use a break and hopefully we'll be able to anticipate the the trend change. I'd love to pick up some stocks cheap on a strong correction.

I am holding to my longs but added VXX as hedge just in case.. Have a great weekend!

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. 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.

New Highs Coming?

The market managed to make another high for this wave today but settled back below resistance. It seems like it is waiting for a good excuse to make a stronger move and my guess is tomorrow's job report will do the trick. I suspect we are in a situation where bad numbers will be considered good and strong numbers will also be considered good considering the market barely reacted to yesterday's flat growth announcement for the first quarter. The pattern is obviously bullish and is looking for a break out. The bears failed to make their case couple of weeks ago and now it's the bulls turn to make theirs.

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. 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.