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