Elliott Wave Stock Market Update - April 9

The market simply refuses to go down and it now has a chance of breaking out to the upside given the pattern, which looks like an ascending triangle. Additionally, the close was above resistance and one more positive day and the intermediate trend goes back green as well. So I guess this is one of those rare occasions where the signal is getting whipsawed. If a break out occurs, we're looking at an upside potential of 2148 or more, specially because of a renewed daily MACD cross.

I ended closing my VXX position at a loss despite having this feeling the market wants to go down. But the TA has proven me wrong so many times, I don't question it anymore. So hopefully, we'll get an easy to read 5 wave impulse to the upside to get back what I sold, which should be considerably cheaper then. If I'm wrong on this trade, I'll just go long at the bottom.  I rather be wrong than be a masochistic trader.

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 - April 8

The market has refused to go down and today's close brings the Trend Average back to bullish again. If upper resistance breaks, then a rally to all time highs will be likely. At the same time, the recent lower highs sets up the market for a stronger bearish wave. The intermediate trend remains bearish and a break out will bring it back to the bullish side, essentially a whipsaw of the signal, which hasn't happened in last 3 years. I still hold VXX but getting ready to sell it and book the loss if resistance breaks. I also position traded oil and raised my stop to my buy price last week, which already guarantees me a profit because of the intra-day trade today.

Lastly, markets in Asia and Europe look like they will continue their rally. Specially China and HK which are manic at the moment, so selling in the US (in the event of support breaking) might be limited given overall sentiment. I just need China to rally 30% more to reach my retirement goal and from what I see, it might just get there by the end of this year. This is a huge deal for me as I've dreamed about retirement since I was first exposed to the idea of compounding interest back in my finance class in college. I remember that particular class like it was yesterday, I remember the teacher telling us that if there was one class we really needed to pay attention to that semester, it was that particular session. Fortunately, I really paid attention that day and started to make it a goal to retire as early as possible. I should go back and find him to thank him.

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 - April 7

The market made a slightly higher high today but it was stopped at resistance before selling off towards the end of the day. This coming bearish wave could be the "make or break" wave for the bearish case. In the ideal bearish scenario, the market needs to trade firmly under the TA and the 50 DMA, and most importantly break the recent higher lows and specially 2039. If the coming bearish wave doesn't make any more progress, then we could see the short and intermediate trend reverse to the bullish side as soon as the end of this week or next week.

I am keeping my VXX and oil positions intact and one thing I noticed is the rally in oil keeps helping equities. Considering there could be substantially more upside for oil, if we see a deeper correction in the stock market, the fact that oil is rallying will help minimize the damage in equities. So in this sense, holding these two instruments hedge each other. The trick will be to make money on both of them when closing these positions. For now, I am up substantially in oil and raising my stop to what I see as a W1.

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

* 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 - April 6

The market rallied strongly today after selling off in pre-market after the jobs reports on Friday. Looking at the ES chart, the low over the weekend was higher than its cash equivalent of 2048, so there is still no sign of bulls giving up. With that said, despite the close over the Trend Average and the 50 DMA, the intermediate trend has turned bearish as well so we now have a strong possibility there is a substantial top in place. For these signals to reverse, the market would have to stay consistently above the Trend Average for the rest of the week and I'm not sure the market will be able to. For the first time in a long time, I feel comfortable being short given the lower risk/higher reward situation. Obviously, the market can keep rallying from here to new all time highs but I wouldn't bet on it until bearish signals reverse.

I am holding on to my VXX, which went down quite a bit today. But luckily my oil longs more than made up for any volatility losses as it rallied more than 5%.  If oil can break resistance at these levels (WTI 52.50), we could see an even stronger rally.

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 - April 2

The market managed to put in a positive day as I was expecting but the advance was stopped by the 50 DMA. Also, the potential bullish micro-count overlapped and we have a Head and Shoulders targeting 2012, so charts are looking bearish. A clean break of 2039 will confirm the downtrend next week but a failure to do this will likely result in a strong rally. I suppose the jobs reports tomorrow could be used as an excuse for the next market move. 

I went long oil today since the Iran negotiations seems to have been settled and bought back VXX. Hopefully oil shoots up to $60 and VXX to $30!

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 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 - April 1

The market plunged yesterday after the close, coming very close to the cash close equivalent of the most recent low of 2045. But selling abated overnight and the initial bearish opening in the cash market was reversed somewhat. So, this is one of those instances where the after hours market follows a count in the cash market but by the time the next session opens, we have a different count. Technically speaking, the cash market chart looks like is following a bearish 5 count but we just can't ignore what happened overnight. So I decided to take off the labels to avoid confusion as the bounce today could be the start of a new rally. The bias remains bearish because the TA is negative but again, these fails attempts by bears to break support will lead to a new rally to all time highs. So in my opinion, bears are running out of time.

I ended up selling half my VXX and got stopped out of my other half at break even. It was a profitable trade but nowhere near as profitable had I woke up early morning. I guess next time I'll set the alarm! For now, I am preparing to go long depending on how the waves evolve in pre-market/early morning. Last but not least, oil looks like it is putting in an IHS so a clean break of its neckline at $52.50 opens the way to a rally to $60+ and a test of its 200 DMA (and most likely confirming a significant bottom at $42). Given the previous pessimism on oil, a rally in crude will most likely be helping equities.

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 whipsaw

Elliott Wave Stock Market Update - March 31

The correction for the wave yesterday went deeper than allowed under wave rules for a 5 count and the close was under the Trend Average, so now the bias is back to the bearish side. Bears just need a solid catalyst to sell into and break the 2039.69 level to reverse the uptrend. Perhaps the Iran issue will be used as an excuse? But just like it can be used as a reason to sell, it could also provide an excuse to rally and break upper resistance. The best for now is to follow the TA until the next trend solidifies. Since the close was under the TA, I bought some VXX at EOD to hold until the short term trend reverses. And btw, if you want to see an episode of manic-depressive trading, check out VXX's chart for today. It spiked 10%, went down 15%, up 15% then down 10% in less than an hour! I wonder how many people got screwed on these swings. It looks like manipulated move to take out trade stops as the VIX itself wasn't going up down like that during that hour.

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 whipsaw