Elliott Wave Stock Market Update - October 31

"every single time the market has been this oversold in the last two years, we've seen rallies to new all time highs. Will this time be different?"

I posted this on October 2nd and it looks like the pattern is repeating itself. Technically, the market made an all time high in pre-market and closed within a point of the all time high in the cash market. But on the DJIA and the Nasdaq, they both closed at new highs for the year (ATH in the DJIA). So it looks like the market will continue making new highs for the remainder of the year, with or without a pullback. If the market can correct to 1912-1925, we would have a big Inverse Head and Shoulder's set up with a target of 2220 and would fit in well with a Christmas and January rally. However, if the market punches through resistance again (2019), this wave could go parabolic to 2220 without a significant correction. The medium term signal has turned bullish, so now it is all clear for bulls. I am enjoying the longs I bought in the upper 1800's, but my hedge at 1973 is starting to worry me as I wasn't able to stop out at 1999 as the market gapped up towards the 2019 resistance this morning. Hopefully, I'll be able to get out of it without much damage by position trading or better yet on a correction towards the Trend Average.

The excuse for the rally today was the Bank of Japan's unexpected QE announcement, which helped push the Nikkei to a 52 week high. But the rally there was already in the works, so it's not really a surprise.  Also, China's SSEC is also at a 52 week high and challenging a multi-year resistance level. So we have the first, second and third largest economies in the world at 52 week highs. Which tells us, we might be seeing the start of another significant bullish run that will last for a while. The economies of Europe and commodity dependent countries (notably Russia) are not faring as well, but I don't think they will be able to stop the momentum being built up by faster growing economies. 

Have a great weekend and Happy Halloween!

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


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.

Elliott Wave Stock Market Update - October 30

The market was able to reverse all the losses from yesterday and challenge the 1999 resistance level, eliminating the bearish 1-2 set up and putting into question the V wave label. If the index overcomes 1999, there's a good chance the all time high will be challenged. Goes to show just how much the market was worried about the end QE. I am sure some excuse will come up soon for a correction or even a sell off, but in the end it will be just excuses to screw bears and panic sellers as this market has shown again and again for the last 2 years. Bears are probably between sore and numb at this point.. here's a chart to remind us of all the "panic attacks" this year.

But as I always say, it is about the economy! strong economy=strong profits=bulls win. Until the economy shows real deterioration or sharp increases in interest rates, the market will be pricing in profit growth.

I am holding on to my hedge but I might stop out if 1999 and try it again at 2019. I am sure the market is due for a pullback, but no point in fighting euphoria at this point.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged

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 29

The market started to pullback today after finding a top at 1991. It is still too early to tell what sort of corrective waves are coming, but if the wave from 1991>1969 is a bearish W1 of an A, then the target is about 1945 or around the TA. However, if this is a simple ABC, then we're looking at 1960 as the end of a short term correction. I think it'd be better for the bullish case to make a stronger pullback to 1925, as sustainable rallies usually come after a good dose of fear. And now that QE is officially over and there is no sign of further QEs, maybe those traders who believe this market will crash because of the end of QE will start selling tomorrow? technically speaking, they should have started selling as soon as the news came out but maybe they're confused. I am glad the whole QE thing has been put to rest, as we will now find out if this policy was truly effective. If things are as stable as they seem, Bernanke will go down in history as an economic genius who saved the US from a depression. And he should get credit for it, given all the criticism he received during his tenure. I personally thank him or my cheap mortgage rates, we might not see rates this low again in decades.

Anyway, I will be lowering my stops to break even if the market goes below the 50 DMA and hopefully closing position at a profit on the TA test or at 1925.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged

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 28

The market has continued to rally as expected and has now reached and surpassed the Inverse Head and Shoulders target of 1978, first posted almost 2 weeks ago when the market was at 1880's. At that time the IHS target seemed like long stretch given all the fear about Ebola, QE, Oil, Europe, etc. And this rally is a reminder of why objective technical analysis is a better predictor of market behavior.

Now that the structure seems complete, I favor a top in the next few sessions and then a drop to test the Trend Average or better yet the 1925 level. However, if 1986 is broken then the next stop will likely be 1999 and in turn raise the target bottom to about 1950 (Assuming the market is about to put in a big IHS to much higher highs). But if this rally has been a B wave, then we should see the 1821 low tested. I went short to hedge my longs as planned and will be covering on the pullback to the TA or sell my longs if people get overly bullish past 2000.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged

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 27

The market didn't do much today other than reset short term overbought oscillators to neutral. There is also a short term triangle pattern in place which should result in higher prices and possibly challenge the 1970-78 area. So my plan is still the same, if the market gets there then I will be shorting to hedge, or wait for a pullback to the Trend Average/1925 to add longs. November is coming up and the market might start to position itself for the usual December rally.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
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 24

The market refused to pullback today and instead it went for a test of the 50 DMA and it is now very close to its 1970-1977 resistance level, which is within range of the second Inverse and Shoulders target posted early in the rally. If the market intends to rally for the rest of the year, we might see the market put in a neckline around these levels and pullback to 1925 and then mount a huge rally to 2120 more or less on yet another IHS. I am sure some people will find it hard to believe it, but the technical background supports it. The requisite for this potential rally is the recapture of the Medium Term Trend. If the market fails to hold the 1925 support level and most importantly the 200 DMA on the coming pullback, then we will probably get what will most likely be a C wave to test the 1821 low.  Looking at the fundamental picture and some of the media headlines, the issues that were a problem a few day or weeks ago (when the correction started) like Ebola, Russia, oil, and Europe seem to have been sidelined. But the bottom line remains, Europe is near zero growth which might prompt them to do their own version of QE. The US and China continue to grow substantially, adding between only these two countries $1.5-1.7 trillion worth of GDP this year alone. So the background picture favor the bulls in the intermediate term. The only factor that I see favoring bears is the market might need more time to consolidate gains from the last 2 years.

I am going to short to hedge at resistance if the market gets there or add longs at the 1925 level/Test of the TA, which ever comes first.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
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 23

The 1925 level was not breached and as I expected the market continued to rally towards the 50 DMA, making a high at 1961 before reversing some of its gains. Technically speaking, we can call the entire structure complete at this point since there are 5 waves in place. But this last leg could extend to 2015 if it subdivides into 5 waves or a bit lower if it goes into an Ending Diagonal pattern. Also, since it is short term overbought at this point, a pullback to test the Trend Average to consolidate gains and then go towards new all time highs looks very possible.

I missed the chance again the chance to add longs (should have done it yesterday) since the market gapped up. But I'll add longs if we get that TA test or go short to hedge if we get more upside, specially a micro 5 count/ending diagonal. The financial media seems to have forgotten all the scary issues from last week after a 140 point rally. But once they start justifying the current rally with whatever reason they come up with next, it will be time to be cautious on longs. It's obvious by now the media is always once step behind.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com


Short Term Trend = Bullish
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.