Elliott Wave Stock Market Update - December 31

The market had a stronger sell off today that ended below the Trend Average by closing at 2058. Still, the expected move from 2093 is a zig zag so far and we should see another bullish wave to a new all time high as long as the Trend Average does not turn bearish. If the market fails to counter rally substantially in the next session or two, then a bigger correction is likely.

Returns on the S&P 500 were 13.75% for the year (not including dividends), which is an above average year. The cumulative returns for the entire bull market since the 2009 low is 212% and fundamentally speaking, the market looks to me like it still has more to go. With that said, market cap to GDP is the second highest in history at 1.27 and I won't be surprised if the market goes all the way to its all time high at 1.55. The one thing that helps this huge market cap rate is the fact that at PE 18, the market is barely above its long term average of PE 16. So if profits can continue to grow as they have in the past few years, there's really not much of an excuse to sell stocks.  Also, relatively speaking, this bull market is average time wise and could go on for a lot longer. 

I was fortunate to beat the SP500 performance overall and had my China longs tracked the SSEC more accurately, I'd be at my retirement goal in the next few months. As it stands, I need to grow my portfolio 35-40% to reach my goal. So I hope I can get a 12% annualized return through 2017 (my original target retirement year) or perhaps have a huge 2015? whatever the case, I am very grateful for where things stand.

Happy New Year and hope 2015 will bring you lots of happiness, health and wealth!

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 - December 30

The market rolled over as expected and so far it is looking like a W4. This is the first "significant" daily drop in almost 2 weeks and chances are upside will resume in the next few sessions. Once we get 5 waves counted, then we can start projecting downside for the correction. But I wouldn't be surprised if we get a bullish January considering the momentum and the fact that this intermediate wave from 1972 has a good chance of being a bullish W3. Specially, since fundamentals look strong for the US economy in 2015.

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 person

Elliott Wave Stock Market Update - December 29

The bullish momentum continued today and we got another all time high. However, the market might be getting ready for a Trend Avg test before another leg up. Oil made a lower low for the year, which suggest there is another bearish wave in the works. So oil prices could be the excuse for a mild correction, hard to tell how much lower oil will go but on the W4 triangle that I've been tracking, it seems like $48-50 is the target for WTI. I will will probably go long on oil again if that level provides support. Also, an ETF I am looking to buy in the future is RSX (Russia). It seems likely that it will test its financial crisis low at $10 (when oil reached $33), so I will be making a long term bet that Russia and oil comes back. That ETF could easily double once oil and the crisis with the Ruble stabilizes. Lastly, to put into perspective what is causing the oil to sell off, here is a link to the US EIA

http://www.eia.gov/forecasts/steo/report/global_oil.cfm

Demand is expected to grow, the problem is supply is growing faster. The extra supply is about 1-2 million barrels out of 90 million barrels per day produced worldwide. OPEC doesn't want to be the only group cutting, so Non-OPEC producers need to come up with a plan to make it viable for everyone to produce without undercutting each other. Once that happens, oil will be going up if demand grows as expected. Mark my words.

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 - December 26

The market has continued to make new highs as expected and it doesn't even look like the W3 is done. Also, the RUT made new all time highs, so all markets are now in synch on this bull run. I ended up stopping out of my oil position (at a profit) on today's oil sell off. It looks like oil has been triangulating and there will be one more leg down that could find a significant bottom. Perhaps that expected bearish leg in oil will be the excuse for a mild correction in equities.

Have a great weekend!

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 - December 24

The market continued to rise to a marginally higher new all time high and it looks like there will be a bigger bullish leg coming up soon. I changed the micro labels because of the way some oscillators are behaving. Normally, whenever oscillators reset with rising or sideways prices, it usually means another price advance. I suspected this wave was going to behave like the previous one (1821-2079) and so far it's looking very similar. So, we might or might not see a correction on this advance and I won't be surprise if the structure matches the previous advance, which would put the market at 2230 (1972+258) and perhaps complete LT INT 3? However, considering this is the 5th of LT INT 3, this could well end up being rising wedge and we would get a lower target.

I meant to post an earnings chart I found recently but I don't know where I placed it. But I found the ones below that basically tell the same story. Currently, the market is trading around 17 PE (assuming $120 total 2014 earnings), this in a year with 2.5% annual GDP growth (perhaps a little more). Next year, the consensus is about 10% growth in earnings with a higher projected growth rate for the economy at 3%. So, if we use the same PE ratio we would get 2244 at the end of 2015. What remains to be seen is Q4 results to get a better picture of what the total earnings for 2014 actually are. Also, the historical PE is 16 so technically speaking the market is not that far ahead. We could see PE contract next year or expand and my guess is it will depend on general investor enthusiasm.

Also, I wanted to point the following out as it is very important. Industrial production is growing faster than GDP, the most in decades. This explains the faster earnings growth vs GDP growth. There are several factors for this and lower oil prices will generally help expansion due to lower costs.

Merry Christmas!


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 - December 23

The market made an official new all time high as expected and chances are there are many more to come. There's now a bullish cross on the daily MACD and this could easily mean 100+ points before the next rollover. So it looks like this rally will last for a few weeks, possibly into the end of January unless a significant bearish event happens between now and then. But considering the economy just had the best quarter in 11 years and all the extra disposable income resulting from low oil prices will be reflected next quarter, bulls have strong fundamentals backing their case. I have a projected earnings chart that I will post tomorrow to get an idea of what levels the market might be pricing in.


Also, oil rallied today so I am raising my stops to break even. I just need prices to break resistance at $58 and there will be a bullish daily MACD cross there as well. 

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 - December 22

The market closed at an all time high and a new highs are being put in after hours trade. I think the little sideways correction today could count as a micro W4, but so far this structure reminds me of the last wave we had from 1821-2079, which kept grinding higher and higher after mild corrections. And considering there are many fund managers behind the SP500 performance for 2014, many might be forced to buy more in fear there will be no pullback. Also, oil fell substantially today and the market barely blinked, so there isn't much bearish hope other than the market being overbought. I ended up buying oil today because of a potential triple bottom reversal (the risk is that it is a descending triangle), so hopefully I can milk a 10%+ run from today. Lastly, I posted this over the weekend but I had to revise one of the charts, so here is the post again.. things are looking very bullish at the moment.


Long Term Market View

I haven't updated this chart in a while but here it is. Now that I think we have a LT INT W4 in place (1821), we can start preparing for the end of the entire move from 1075 in back in 2011. Assuming this final wave is the same as W1, then the ideal target would be 2168. On the longer term, the target I mentioned on Friday (2485) looks very possible with this long term count, which I have not really altered in over 3 years. But that should come after a top for LT III wave and the following LT IV to reset long term oscillators.

Also, I wanted to post the Inverse Head and Shoulder's I've been mentioning in the last few weeks. I assumed most people knew what I was talking about, but since it is a sloping IHS, it might not be all that clear. This pattern is targeting 2277, which sounds ultra bullish but if you add the length of the rally from 1821 to the 1972 low, you see it almost gets the market there. This would overshoot the "ideal" target 5th wave target, but that's what final waves do sometimes.

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.