Elliott Wave Stock Market Update - October 20

The market was able to break above the 1898 resistance and closed just below the 200 DMA. The short term oscillators are overbought, so we could get a pullback to support before another bullish attempt on the 200 DMA. The market closed over the Trend Average, but since it is down sloping, I think it will take couple of bullish closes to turn the trend bullish. For now, the market looks stable but the real test will come at the pullback. The level I am paying attention to is 1877, if that holds then I think the market could get very bullish. I went partially long today on China shares and might add SP500 on a pullback using 1877 as the stop.

We will be making trade recommendations this weekend on the EWA site. 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 trend being challenged

* 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.

Elliott Wave Stock Market Update - October 17

The bulls were able to regain some territory again today and so far it looks like the market wants to go for the IHS posted yesterday. However, another formed today (which is a bit easier to trade) that targets 1978.  Given how oversold the market has been, I wouldn't be surprised to see this high target met. The resistance levels are clear if the market breaks out, there are 1912, 1935, 1970. So I will hopefully buy on a break of 1898 and trade the IHS keeping in mind the resistance levels and the 200 DMA/TA. Now, the market can still be in a W4 wave and prices could go up to 1925 and still keep the bearish 5 count valid but that is not looking likely so far. Yellen hasn't given any hints of what the Feds intend to do yet, but I suppose if they delay tapering then it will be used as an excuse to continue the rally. In the overall scheme of things, earnings is what will support the market and that's technically what people should be focusing on.  And so far reported earnings are looking good.

Have a great weekend!

We will be making trade recommendations this weekend on the EWA site. 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 trend being challenged

* 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.

Elliott Wave Stock Market Update - October 16

We had a much less volatile market today and there is even an IHS targeting 1924. However, we could still see one last leg down to test the 1814 area, so the market is not out of the woods yet. If the market breaks out tomorrow in a bullish W3 then that could signal a bottom for the entire correction, but it's best to be cautious given the manic depressive mood of the markets. I am on the sidelines but might consider trading that IHS if it materializes.

Also, per my post yesterday:

So the second there is even a suspicion of anything that might affect profits, you will have smart people in charge of economic policy make sure those profits keep coming in. A good economy for a government is not a luxury, it's a matter of self preservation. 

There are now "surprise" rumors about a continued QE program given the potential deflationary pressures on the US economy. So all eyes will be on Yellen on Friday to see if there are any signals that confirms the rumor. And again, contrary to some of the headlines of a "Hand out from the Feds" to the markets, this is an issue of making sure the economy keeps growing so those profits keep coming in so they can be taxed! What I posted about yesterday was not meant to be critical of the government, it was meant to point out why the way government works favors people who invest in business assets. To be very specific about what I am talking about, of $1 in profits generated by a public corporation, 35 cents goes to the Fed government in taxes, which leaves 65 cents. Out of that 65 cents, it gets taxed again when it gets distributed to shareholders at 20% more or less plus in my case (California resident) another 13% in state taxes. So, from $1 of profits generated, close to 60% goes to government! So technically speaking, the government should be interested in the company doing well more than anyone else. In the working world, I can only think of one profession that takes more than 50% for the privilege of doing business. And this of course doesn't include all the other taxes a company generates in income taxes from its employees and all the other etc taxes. So you see, while the government might screw up here and there, it is always watching out for itself as it is a money hungry beast by design. All those bailouts in 2009 were not meant to "Help Wall Street" as the public likes to complain about, those bailouts were meant to keep Cash Cows alive so they can keep producing. And the byproduct is the employment for workers and a general sense that the economy is doing ok. So next time we get another financial crisis and you see the government singling out companies to bail out, the best thing one can do is follow the government money as that might just make you very rich.

We will be making trade recommendations this weekend on the EWA site. 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 trend being challenged

* 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.

Elliott Wave Stock Market Update - October 15

The market really sold off today and has made its intention clear. A few days ago I posted the possibility of an expanded flat pattern or a bearish W3 in the works, but given the market's oversold condition and the fact that the 200 DMA had not been tested, much less broken in 2 years, made me lean towards the expanded flat option. But now that it is clear it was a W3, I can look for other possible bottom targets. As of now, if the market puts in a final 5th wave that equals W1, then we're looking at 1818. There is a very important support level at 1814 that must hold, but if the W3 extends then the next key support at 1738. I was stopped out early morning at a loss and I will just sit it out until I see something worth trading. For the record, I still think the sell off is not a sign of anything serious but part of a consolidation period (LT INT W4). The question is, will the bigger correction be a triangle, zig zag or a flat?

News of Ebola and the "economic slowdown" is the excuse for the correction, but chances are Ebola will be contained (despite inept handling so far) and the world will likely be just fine. Lower oil prices just translates into an economic stimulus everywhere in the world.  And should any country see any real possibility of a slowdown, we will just get more QE or stimulus packages. Something the great majority of people fail to realize is that the number 1 beneficiary of corporate profits is not the shareholder, the CEO, or the company. It is the government. Which double dips with corporate taxes and then dividend taxes and capital gains. In addition to income taxes, payroll taxes, property taxes, sales taxes, etc taxes. So the second there is even a suspicion of anything that might affect profits, you will have smart people in charge of economic policy make sure those profits keep coming in. A good economy for a government is not a luxury, it's a matter of self preservation.

We will be making trade recommendations this weekend on the EWA site. 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 trend being challenged

* 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.

Elliott Wave Stock Market Update - October 14

The market attempted to rally earlier in the morning only to give up most of its gains by the end of the day. There are couple of ways to look at the waves, but it seems like the bearish structure is trying to find a bottom given all the overlapping waves. It will be interesting to see what the market does once it reaches the Trend Average, which has now fallen to 1929. If the market can turn the TA around, there's a very good chance the 50 DMA will be the next trendline to be tested.  Also, I am posting the monthly chart, which I don't think I have updated since last year. If that long term count is correct, we should see a shallow correction (relative to the huge rally since late 2012) and then finish the W3 of W3, so technically there's still a long way to go. Lastly, there's a lot of talk about Oil lately and I wrote about this a weeks ago on the EWA site on the levels where it should bottom if mid 80's support broke. At this point, $77 looks like it will be the floor so that might be a trading opportunity once Oil gets close to it and perhaps coincide with an stock rally.

We will be making trade recommendations this weekend on the EWA site. 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. 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.

Elliott Wave Stock Market Update - October 13

The 200 DMA was not able to hold the selling today and an important layer of support in the 1880's was broken as well. From the wave perspective, it looks like the market is trying to find the bottom of an expanded flat (A=1904, B=2019, C = 1974?) or it is selling on some sort of W3. Looking at technical indicators, the market is extremely oversold and is due for a strong bounce or even the start of a new bullish rally. I remember last year around November, when I thought the LT Int W3 had finished, the market was going to test the 200 DMA at the very least to confirm a LT Int W4. But that test never came and perhaps this is the LT Int W4 correction that was supposed to come last year. Which implies this bearish structure will find a bottom and then we will see LT Int W5 to new all time highs. The fundamental picture supports a correction and not a sell off in my opinion and I think the market will be reminded of that now that earnings are going to be reported. The current excuse for the sell off is the possible slowing of worldwide growth, given Germany's exports contracted substantially in last month, which in itself is not a surprise given Russia is one of their main trading partners. However, China just surprised to the upside yesterday on both exports and imports but that went mostly unnoticed. So given the fact the US is growing at or slightly above projections,  China continuing 7%+ growth, I think the whole thing is just an excuse and the markets will stabilize and rally again. I think once Marc Faber or any one of those always bearish "experts" appear on CNBC to scare the public, we will be able to confirm the bottom..lol

I went long early morning after seeing a 30+ point reversal (which I thought was a micro W1) from pre-market lows, but ended up getting stopped at 1880 for a -1% loss. However, I went long again at the close with a stop at the next key support level, so hopefully the market Gods will be kind to me in the next few sessions. Obviously, this is a counter trend trade so I'm looking to sell rallies until key levels are recaptured.


We will be making trade recommendations this weekend on the EWA site. For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a great weekend!

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. 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.

Elliott Wave Stock Market Update - October 10

The market failed to find support at 1925 and instead ended up testing the 200 DMA at the end of the day as I had speculated yesterday. However, since the low came at the close, there is a good chance  the low put in ES few weeks ago as the actual bottom for this sell off (1995 cash equivalent more or less). So early next week, I am looking at the 1880-1900 range as the potential bottom and a rallying point for a strong counter rally or sustained multi-week rally. I was really tempted to go long at the close, but I'll take my chances and wait until Monday before committing.  I find the risk/reward at this level is very favorable, specially given where the stop level is.

We will be making trade recommendations this weekend on the EWA site. For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a great weekend!

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. 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.