Elliott Wave Stock Market Update - January 9

The market corrected today as expected and the 5 count is still viable as long as 2029.61 holds. However, the correction ended closing below the Trend Average and there's a potential H&S that targets 1880. So we could see a decisive move next week that will solidify the direction of the short term trend. The fundamental picture should favor the bulls next week given the start of the earnings season and the possible end of the sell off in oil but we'll just have to wait and see.

I went long today in oil now that the lower low I expected materialized and I see a potential bottoming pattern. My stop is today's low, so hopefully it's a bounce wave I am trading and not a bearish micro W2. As you all know, I believe these low prices will bring down supply since many oil companies should not be in business at this price. But one thing I have not mentioned is the likely rise in demand due to low prices. So market equilibrium might just be reached sooner than most people are anticipating. I am literally trading what I learned in my econ 101 class and the oil market could not be a better example of how the "invisible hand" of the market corrects markets in the long run.

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 = 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.