Elliott Wave Stock Market Update - April 30

The market sold off and closed significantly below the Trend Average, turning the signal bearish in one shot. It's hard to say the uptrend is over until 2072 gets breached so if this bearish structure stops here then there's a chance for the rally to continue. However, if 2072 doesn't hold then the market is probably done going up and we should expect lower lows to come, which would line up perfectly with the "Sell in May" scenario. A weak dollar and the ongoing rally in oil should help minimize the sell offs in stocks or even be used as an excuse to rally. I am still holding to oil and not planning to sell just yet, specially now that many traders are now covering shorts. Which to me is interesting, since I would have covered shorts couple of weeks ago when oil had an obvious bullish break out. I guess some traders are not technical at all.

http://www.bdlive.co.za/markets/2015/04/13/oil-surges-above-59-as-traders-cover-short-positions

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.

Elliott Wave Stock Market Update - April 29

I mentioned yesterday a good GDP report would help the stocks rally, instead GDP came unexpectedly below estimates and the market closed right on the Trend Average at 2106. If the Fed wasn't in the picture, the market would be discounting the risk of an earnings slowdown. But since these are exceptional times, everyone is going to guess what the Fed will do with raising interest rates. So, one could argue a slowdown in an economy is actually good for equities. It's crazy, but that's the world we live in now.

Also, oil is pushing $60 and that should help the energy sector of the market. I am keeping my oil shares until I see sign of a top, for now it wants to go over $60 and probably test its 200 DMA. Lastly, I am keeping an eye on Natural Gas which might start a counter rally as well after a brutal sell off for the last year.

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 = 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.

Elliott Wave Stock Market Update - April 28

The market went under the Trend Average briefly early morning before rallying back to end the day positive. I suspect there will be a new bullish wave coming to new all time highs in the next session or two as long as the TA holds up. Earnings are favorable overall, so the market needs to price in continued momentum towards the end of the year. The GDP report tomorrow will help the bullish case if the report meets or exceeds expectations.

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 = 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.

Elliott Wave Stock Market Update - April 27

The market made another all time high today as expected but the wave fell couple of points short of the ascending triangle target. The wave count is not exactly the best looking but it is still technically viable, so my assumption is we are seeing a mild correction before new all time highs. Also, the bullish momentum in tech should help overall sentiment. Perhaps, we will see a high in May and then finally see a proper correction (as in 10%).

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 = 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.

Elliott Wave Stock Market Update - April 24

The market made a marginally higher high today and it looks like new highs will be coming early next week as well. There's an ascending triangle that targets 2128, so perhaps we'll get a solid break out early next week.  The NASDAQ also made a substantially higher closing high, thanks in part to Amazon which rallied 14% after their announcement yesterday. So sentiment going into the weekend is bullish and will continue to be bullish next week.

Now, speaking of Amazon. This is one of the very few companies I would be comfortable holding long term if it ever goes down. Despite the fact that they don't seem to announce profits much, they are technically very profitable but keep investing money in growing revenue. And on that benchmark, Amazon is a behemoth at $90 billion per year. Apple which is almost 4x as expensive going by market cap, grosses $200 billion. Eventually we will see profit margins at AMZN approach those of major tech companies and its stock could easily double or triple from today's close. So if there's ever another big crash, this one will be on my shopping list.

Lastly, I wanted to share the following graph which I found interesting. This is from an article on forward PE (not to be mistaken for trailing PE) and historical returns. Going by this, history is definitely not on the bearish side.

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 = 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.

Elliott Wave Stock Market Update - April 23

The SP500 finally broke resistance and was able to reach a new all time high. Also, the NASDAQ closed at an all time high, 15 years after the dot com bubble. Now that bulls are back in control, I expect new all time highs before another substantial correction. Hard to say if the market can build up enough momentum to reach 2,200 but the IHS target of 2,148 looks attainable. Also, oil seems to be resuming its rally and this provides support to the broader market. This is a market that doesn't really want to go down and despite opinions of this being a "bubble", the fact is that forward PE for the market is not unusually expensive at 17. I am sure there will be bigger corrections to come but until there are true signs of an economic slowdown, higher highs are almost a given.

I closed my VXX position at a loss and I'll buy back again if the IHS target is reached. I also added oil yesterday in after hours and I am expecting $60+ in the near future, in fact oil might even reach its 200 DMA trending down around $70.

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 = 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.

Elliott Wave Stock Market Update - April 22

The market remains in a tight trading range. While the bias and the pattern is bullish, I need to see the 2011 level cleared to be confident of a sustained rally. Today is the fifth time this resistance level is tested in couples of weeks, so hopefully the market will make up its mind by the end of the week. I am continuing to hold VXX which basically looses money by the minute but if we get a bullish resolution, I can get rid of it and buy it back at the IHS target. The good thing is that my longs continue to do very well with all the mania in the Chinese market, I'm at 90% of my goal so I am getting very close. There is an immense opportunity now that it is going up and eventually when it crashes down.  The last time I saw this type of mania was in bitcoin couple of years ago, powered incidentally by the Chinese market.

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 = 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.

Elliott Wave Stock Market Update - April 21

The market gapped up earlier in the morning today and came close to the 2011 level I mentioned yesterday before going back below 2100 and closing barely above the Trend Average. A triangle pattern looks to be in play and there should be a break out as soon as this week. There's also a good potential for an Inverse Head and Shoulders that targets 2148 and we'll see if there's enough left in the tank for bulls to start a rally as soon as tomorrow. As it is, I rather be on the defensive given the lower highs and the breach of the lows last week  so I'm holding on to my VXX until there's a decisive bullish move.


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 = 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.

Elliott Wave Stock Market Update - April 20

The market bounced today as expected but until 2011.91 gets taken out, today's wave remains a counter-rally. I haven't tried labeling the intermediate waves to avoid confusion as the market continues to be in what seems like a triangle. But we should see a decisive move either way sooner than later. I am maintaining my position unless there are clear signs the market wants to break out of range.

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 = 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.

Elliott Wave Stock Market Update - April 17

I wasn't expecting the market to sell off and break 2083 as it did today. But then again, the waves were looking suspicious because of lack of bullish momentum. Given this seemingly range-bound market, I suspect there's some sort of triangle at the intermediate level taking place which will end up breaking very soon. And considering the long term trend has been bullish for over 3 years and the bearish MACD cross on the monthly time frame, perhaps this is finally the time for the market to take a break and make a 10% correction if not a bit more. Strength in oil and general economic conditions (which IMO are fairly ok) will make any sell off in the stock market a consolidation phase before another sustained rally to new highs. So maybe "Sell in May" came couples of weeks sooner?

One of the causes for the sell off today was the curbing of margin trading in China, which in recent weeks has been going up like no tomorrow or 13% in 2 weeks to be exact. Just last month ago I was at 70% of my retirement goal, yesterday's close put me at 87% of my goal. The rise has been so fast, it has exceeded my own best expectations or any possible wave count (I'm actually in disbelief how fast this has happened). So maybe there will be a sell off there to consolidate before going much higher, which will coincide with a world wide correction period that includes Europe as well.

I ended up closing my oil position for a profit and bought back my VXX from last week. I expect a bounce early next week in stocks but I think it's time to start betting for another change of trend.

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 = Bullish trend being challenged
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 - April 16

The market didn't do much today other than reset some of its short term overbought oscillators. I broke down the recent bullish waves and they are 5 count waves, so my assumption is the market is consolidating before launching a stronger bullish wave as soon as tomorrow. The correction could continue but the downside limit is 2083.24, price action under support would indicate more selling ahead. But as I speculated a few days ago, the break out in oil is lending support to the market so continued strength in oil will help stocks reach new highs. And apparently, it's no longer speculation but one of current themes:

http://www.cnbc.com/id/102592048

Obviously, higher oil prices is not better for our economy but Wall Street needs an excuse. Maybe we might just have another "Sell in May" event this year after there are no more excuses left to rally. Hopefully, I will be picking up the VXX I sold last week (which is down almost 10% from when I sold it already).

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a good weekend! 


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 whipsaw

Elliott Wave Stock Market Update - April 15

The market gapped up and rallied as expected but it was not as strong of a movement as I had hoped. So, I am keeping the count on the chart but unless we see stronger follow through buying tomorrow, it will likely be something else. Oil was able to clear resistance at $54 and it seems to be in the middle of a break out, so if that continues tomorrow, equities could continue to use it as an excuse for more upside. The RUT made an all time high today and we should see the broader market follow, the question is which wave count will take it there.

I ended up buying oil at the break of resistance, so I missed considerable upside by selling couple of days ago. But it's ok considering I've made good money trading it already. Next time I will be more conservative in my position trades, I tend to be overly aggressive in taking profits.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a good weekend! 


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 whipsaw

Elliott Wave Stock Market Update - April 14

The market made a lower low this morning before bouncing the rest of the day to close the day slightly positive. The wave count remains the same and if right, we should see a rally as soon as tomorrow. Considering oil has a decent chance of breaking out and the earnings reports, the market might have a good excuse for a strong rally. Alternatively, if the market goes for the 2074 support level, then we might see another correction but I don't think that's likely at this point.

I am kicking myself for selling all my oil yesterday as it rallied today. I just hope it will come down one more time so I don't miss the upside, if WTI $54 breaks then it should shoot up substantially.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a good weekend! 


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 whipsaw

Elliott Wave Stock Market Update - April 13

The market made a higher high for the current wave structure at 2107 before starting a correction. If the labeling is correct, this pullback is part of a bullish nested 1-2, so we have to see a strong rally in the next session or two to confirm. Also, it's worth noting small caps made a new intra-day all time high and that might be a sign of what's about to come to the broader market.

I ended selling oil for a profit again and I'm hoping to buy it back at a test of support. It looks like oil wants to break out and the key will be support to keep holding pullbacks. I just hope I don't miss the break out by constantly position trading.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a good weekend! 


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 whipsaw

Elliott Wave Stock Market Update - April 10

"But the TA has proven me wrong so many times, I don't question it anymore."

Today is an example of why one has to be mindful of the trend. Upper resistance has broken and now all trends are back to bullish. Most importantly, we have a new bullish cross on the daily MACD so now the bias is clearly bullish and odds are new all time highs are coming very soon. The bear camp almost managed to turn the market this time but almost was not enough as 2039 never broke. I labeled a potential bullish 5 count and the W1 looks strange because of the cash market print. One has to keep in mind the rally started in pre-market that day and the count looks much better using that chart. But for the sake of keeping it simple, we'll just use the cash market chart and label as is. If the count is correct, new all time highs are a given at this point.

I am glad I sold my VXX yesterday as it lost 5% today. I will buy it back much cheaper when this bull run is over and it will probably be in the teens by that time. I am keeping my oil longs and enjoying the mania in China, which hopefully will continue for for a while. I waited for years for the market to break out in China, so it was about time.

For further analysis on the NASDAQ, DJI, RUT, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

Have a good weekend! 


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 whipsaw

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