Wednesday, December 31, 2014

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

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.

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