Elliott Wave Stock Market Update - January 30

The market had a volatile day today and ended up closing substantially down from yesterday. I assume the 1988 level will be challenged again (perhaps in pre-market?) and if that level doesn't hold, a test of the 200 DMA at 1975 is imminent. However, the waves remain choppy and unless we see a clean impulse to the downside, the market will stage a strong counter rally and break out of the Descending Broadening Triangle in place.

On the bullish side, oil's rally today is the best in almost 3 years (too bad my stops kicked in 2 days ago!) and another close over $46 on Monday will turn its Trend Average bullish, something that has not happened since June 2014 when it was $105. If the rally starts in oil, I expect its 50 DMA to be tested and that technically will bring support to energy components in the stock market. Sellers could hang on to the negative sentiment due to volatility and the lower than projected GDP numbers for the 4th Quarter to continue the sell off. But let's not forget that under current monetary policy, slow growth just means low interest rates for a longer time which is a plus for assets.  So while the trend is bearish and sellers have the momentum, bears have to really prove their case by closing the market under 1975 as the long term trend remains bullish (which btw will be 3 years old next week).

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 = 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 whipsaw

Elliott Wave Stock Market Update - January 29

The market put in another lower low as expected and it stopped right at the 1988 support I mentioned yesterday before rallying substantially. In an "ideal" bearish scenario, the market should have bounced into a W4 wave before resuming selling towards the 200 DMA. But that's not what happened as the bounce went into what should have been a W1 within a bearish nested structure, eliminating the bearish count and putting the bearish impulse into question. Still, the market has not tested the Trend Average yet and is far below the 50 DMA. So while the trend is bearish, the waves are giving us a mixed picture. Sellers need to breach the 1988 level in order to gain momentum, failure to do so will likely result in bulls gaining back control.

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 whipsaw

Elliott Wave Stock Market Update - January 28

Sellers took firm control today and they managed to turn the Trend Average convincingly to the bearish side, so I am assuming the current wave is part of the nested bearish count I mentioned on the post yesterday. I thought earnings from Apple would translate into euphoria as in the past, but not this time. So the next stop will be the double bottom support at 1998 and then the 200 DMA 1972. The long term trend continues to be bullish, so this might turn out to be just another correction. But if the market breaks below 1965-70, we could be looking at the start of a bigger correction. And considering the current bullish trend has been in place since February 2012, perhaps it is time to reset some of the long term oscillators. Trade below the 200 DMA is good for bears and for people with cash,  so while I didn't get a chance to short to hedge as I had been hoping on a stronger rally, at least I can buy some stocks on sale. My oil position got stopped out, so I am thinking buying energy indirectly with an ETF from Russia's RSX or even Brazil's EWZ when the dust settles. The good thing about these ETF's is the high yield and the fact that I am buying businesses, which makes me feel much better as an investor. The one thing I don't like about buying oil directly though an instrument like USO is that there is no yield, it's pure speculation so it's not something one can hold on for too long. And in oil's case, it's really a matter of time before it shoots back up to $70-80. We just don't know how long it will take.

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 whipsaw

Elliott Wave Stock Market Update - January 27

The micro count I was following failed with today's sell off earlier in the day. Still, the move from the most recent high of 2064 is an ABC move due to the overlapping waves. So this move could end up being a W2 correction given the impulse and then the zig zag. The market closed right below the Trend Average and clearly lost is 50 DMA. So if there is a bullish W3 coming, we should see bullish action as soon as tomorrow. Should the market fail to rally and go back down to today's low, then the count could turn into a nested bearish 1-2 but at this point I doubt it.

The cause for the sell off was mainly the unexpected fall in the durables report and disappointing earnings earnings by CAT and in line reports at MSFT. However, Apple just announced and they exceeded the most optimistic expectations, so tomorrow we should see signs if the bulls are really going to rally to new highs. I am still holding to my oil, so maybe they'll start rallying too.

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 = 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 whipsaw

Elliott Wave Stock Market Update - January 26

The market tested the 2038 level I mentioned last week and we could see a 5th wave starting tomorrow to break the most recent high of 2064. It's impossible to tell if the market will follow though on its Cup and Handle pattern but so far it's looking like it wants to. The outcome in Greece was the one event that sellers could take advantage of, but now that the news have been absorbed, there is nothing much sellers can sell into at the moment. And considering Apple is reporting earnings tomorrow  (Apple should deliver strong results) along with other leading companies this week, bulls have the news advantage and that could ignite a strong rally to new all time highs.

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 whipsaw

Elliott Wave Stock Market Update - January 23

The market started a correction as expected and technically should at least test the 50 DMA before the next bullish leg. So far it looks like an ABC move for a W4 and we should find out early next week. The ideal count for a C&H pattern would be a W2 for the handle, but we'll see if this micro count works. There are elections this weekend in Greece and this is perhaps the excuse to move the market on Monday. Some people worry about the implications of Greece leaving the EU, some say it won't be that big of a deal. Technically speaking, the Greek economy is relatively small at $260 billion. To put that into perspective, the US and China added about $1 trillion dollar each to their economies last year or 8 Greek economies in just 12 months. So if anything, it is more about the integrity of the EU as a union.

I am holding my oil position, so I hope the market will respect the 44.20 bottom and rally to its 50 DMA. Whatever the case, I'm sure the supply side is making adjustments with prices this low.

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 whipsaw

Elliott Wave Stock Market Update - January 22

The market rallied today as expected after the European Central Bank announced QE, which in itself was not really a surprise. The price action confirms the double bottom at 1988 and officially turns the Trend Average to the bullish side. In addition, there is  now cross over on the daily MACD, a close over the 50 DMA and a potential Cup and Handle pattern forming that targets 2,140. I expect a pullback to test the Trend Average or the 2038 support level to consolidate gains in the next session or two. But I wouldn't be surprised if the run continues given all the non-stop rallies in the last 3 years after significant bottoms.

I ended up buying oil again given the clear stop level at last week's low. Perhaps it will finally start a counter rally to its 50 DMA.

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 whipsaw