Elliott Wave Stock Market Update - October 7

The market rallied as expected in a W5 to a higher high to challenge the 50 DMA at 1996. At this point, there are enough waves to call the entire structure from the 1871 low complete. But as long as 1971.99 holds, we might see the W5 sub-divide and reach the 2020 resistance level. If I breakdown W5 and assume the high today at 1999 was a W1 of W5, then we are looking at 2040 as a target which is right under the next level of resistance at 2053.

I assume how China trades tonight might influence the US market tomorrow. The Chinese market has been closed for a week and currently the market here has China priced at 3,400 (last time it traded it closed at 3,050). So if there is a huge rally there tonight, we will see momentum carry over. However, if there is a 5th bearish wave left to the China count as I posted yesterday, then negativity would help bears here in the US. I am waiting for 2020 or 2053 to be challenged to buy back my short position with the expectation of a larger correction. The higher the market goes, the lesser probability 1820 will ended up being tested.

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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.