Wednesday, October 13, 2010

Elliott Wave Update - October 13th

So the market over shot the Rising Wedge (or Ending Diagonal) and I am not so sure the market will break to the downside. If we don't have a big sell off to a level under 1160 tomorrow, we'll probably see a sideways move to consolidate to move on to the next target which is the gap at 1200. Given the fact that the trend is bullish short and intermediate term and we have elections coming plus the QE announcement, we'll probably rally couple of more weeks only to see a vicious sell off (after all the retail people buy into the rally). I was able to better my short position by 8 points by not staying overnight short to 1114, I probably re-shorted too early today but it's ok. At least the picture seems to be more clear now. Any move below 1160 and I will use that level as a stop limit.

It's been an interesting one and a half months for sure and in a way I am glad I got stuck in a short position because I've learned from one mistake I will never repeat again. That is to trade with the moving average always in mind.

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