Elliott Wave Stock Market Update - September 16

The market closed right above resistance and the pattern now favors strong upside. Obviously, this will all depend on the Fed's decision on rates and a market friendly announcement will give bulls the excuse to rally. But even if there was a rally, we have to keep in mind that this would be just part of a test of the 50 DMA and technically speaking there's not much to be excited about. The market is not out of the woods until 2039+ is re-captured in the short term. The ideal wave scenario would be a test of the 50DMA or 2039 and then a move to a lower low to end the LT W4 wave towards the end of the year or early next.

If the Feds raise rates tomorrow, it will be the first time in 9 years! How this will eventually affect housing, financial assets, and consumption will be interesting after such long time. Personally, I think a recession is probably coming a year or two after the first rate hike given the current length of the economic cycle (the official number is 11 to 33 months). Which in itself is not bad as this is how healthy economies grow. Plus, it allows people to buy houses and other assets cheaper.

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Short Term Trend = Bullish
Medium Term Trend = Bearish

Long Term Trend = Bearish

* 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.