Elliott Wave Stock Market Update - October 23

The 1925 level was not breached and as I expected the market continued to rally towards the 50 DMA, making a high at 1961 before reversing some of its gains. Technically speaking, we can call the entire structure complete at this point since there are 5 waves in place. But this last leg could extend to 2015 if it subdivides into 5 waves or a bit lower if it goes into an Ending Diagonal pattern. Also, since it is short term overbought at this point, a pullback to test the Trend Average to consolidate gains and then go towards new all time highs looks very possible.

I missed the chance again the chance to add longs (should have done it yesterday) since the market gapped up. But I'll add longs if we get that TA test or go short to hedge if we get more upside, specially a micro 5 count/ending diagonal. The financial media seems to have forgotten all the scary issues from last week after a 140 point rally. But once they start justifying the current rally with whatever reason they come up with next, it will be time to be cautious on longs. It's obvious by now the media is always once step behind.

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

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.