Elliott Wave Stock Market Update - January 9

The market corrected today as expected and the 5 count is still viable as long as 2029.61 holds. However, the correction ended closing below the Trend Average and there's a potential H&S that targets 1880. So we could see a decisive move next week that will solidify the direction of the short term trend. The fundamental picture should favor the bulls next week given the start of the earnings season and the possible end of the sell off in oil but we'll just have to wait and see.

I went long today in oil now that the lower low I expected materialized and I see a potential bottoming pattern. My stop is today's low, so hopefully it's a bounce wave I am trading and not a bearish micro W2. As you all know, I believe these low prices will bring down supply since many oil companies should not be in business at this price. But one thing I have not mentioned is the likely rise in demand due to low prices. So market equilibrium might just be reached sooner than most people are anticipating. I am literally trading what I learned in my econ 101 class and the oil market could not be a better example of how the "invisible hand" of the market corrects markets in the long run.

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 = Bearish
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 - January 8

The market rallied as I expected and the IHS target was almost reached with today's high. Most importantly, the Trend Average was recaptured and this opens the possibility of a new challenge to the all time high at 2093. We still need to see more closes above the TA for the short term trend to turn bullish but usually whenever the TA is crossed with a W3, the trend usually favors the W3's direction. And like I said yesterday, earnings will come into focus while the sell off in oil is in its last stages. So we might just see another bull run in the next few weeks.

I was planning to short to hedge if the market hesitated around the TA but I guess I'll just have to wait until the bulls truly exhaust themselves. I know many are hoping for a bigger correction to start and I am sure there will be one, but not until there is a solid reason to sell (Oil and Greece are just excuses to take profit imo). For now, all sell offs have just been corrections from overbought conditions.

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.

Elliott Wave Stock Market Update - January 7

The market counter rallied substantially today as expected and we could get an idea of how the rest of the month will shape up in the next few sessions. I am expecting the market to test the 50 DMA at 2041 but I also seen an IHS and a potential 5 wave micro count that can reach 2060-70. If the market fails to recapture the TA convincingly, then lower lows are likely. But if we get a strong W3 that closes comfortably above 2053, then there's a good chance we will be looking a new all time highs before the month is over. The market is very focused on oil at the moment and it seems to me like there could still be one more smaller bearish wave down if the bottom so far proves to be a micro W4. But if the bottom is in, then we should see a strong counter rally in oil which will be used as an excuse to take on all time highs in stocks. Also, next week people will be focused on earnings and they should come ahead of estimates.

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 = 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 - January 6

The market continued to sell off today to make a lower low at 1992, coming close to the previous significant low of 1972. Which makes the bullish count still viable but getting close to being invalidated if we see another strong bearish wave. The market is already very oversold and there are enough micro waves to call the structure complete. So a bullish wave should come very soon that will give us a better idea of what the market wants to do in the next few weeks.

The excuse for the sell off continues to be oil but like I said yesterday, chances are a temporary or even long term bottom will be found soon. OPEC (Saudi Arabia in particular) continues to play chicken with non-OPEC producers and at some point someone will start cutting production. And make no mistake that this is a supply driven sell off and NOT demand driven, once they have supply cuts figured out oil will shoot back up. I read that just 1 million b/p/d in the market moves oil prices $20, so oil at $70-80 might be back before we know it.

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 = 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 - January 5

The market sold off today and the count has now changed to reflect new possibilities. The wave from 1972-2093 was a very strong wave without any substantial corrections, which favor this sell off wave being a W2. But if we label 2093 as an intermediate top, then this bearish wave could be an A or a bearish W1. The key level to watch while the TA is negative is 1972, if that level is breached then the market will go into a much bigger correction. Also, the bullish MACD crossover from couple of weeks ago was reversed and bulls need to regain the 50 DMA and the TA to recover its bullish stance.

Fundamentally speaking, the sell off was caused because of the slide in oil which traded today in the range I was targeting for the triangle breakdown of $48-50. So oil looks like it is in its final wave before a bottom and once a floor is found, bulls might use stable or rising oil to charge again. And don't forget, all this extra cash generated by savings in gas will be translating into earnings. A headline that was missed today was the sales from automakers, which had a very strong December and the best year since 2006. Any business that benefits from discretionary spending will be reporting a strong Q4 starting next week. Lastly, China (who probably benefits the most from low oil prices) rallied 3.6% last night so bulls might just be setting up a bear trap again. I am holding my long positions (which fortunately are China related) and will consider hedging at a test of the TA just in case or maybe long oil if I see a finished 5 wave count from the triangle.

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 = 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 - January 2

Welcome 2015! I can't believe it's been  now almost 6 years since the 666 low in March 2009. A lot has happened since then, but at the same time it seems like all these years just flew by. Economically speaking, things do look a lot better now than in 2009 but obviously we still need to see the complete outcome of all the QEs. Since I am a natural optimist, I hope things will be even better 6 years from now in 2021.

Anyway, the market retreated to a lower low today in what looks like an over extended micro W4. I still prefer to label it a W4 because of the way oscillators have behaved. For example, the 30 min MACD shows a classic W4 reset (the longest reset I've even seen). So if there is a 5th wave coming, it must come on Monday or else there is something else in the works. There's a small IHS targeting 2065 more or less and if the bounce wave from 2046-56 is a micro W1 then 5 waves project to resistance at 2072. Last but not least, the market closed for the second time under the Trend Average and it must re-capture it early next week or else it will turn bearish. Which would force me to change the labels to a bearish option.. I hope not since I want to short to hedge at higher prices, but I guess we'll find out soon.

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


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.
  

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.