Tuesday, December 29, 2015

Elliott Wave Stock Market Update - December 29

The market managed to rally above its previous high and close comfortably above the TA. While EW doesn't provide a solid count yet, sustained trade above 2060 will turn all trends bullish in the next few days. Also, there is a bullish cross on the daily MACD, which is usually about 75% correct in predicting higher highs in multi-week frames. I was hoping to start building long positions above 2060 but since there was a gap, I will wait for a test of the most recent low to have a better risk/reward set up.

Also, here is a chart that illustrates the mixed picture of the market this year. Basically, energy dragged down the broader market but low oil prices ended up benefiting consumer oriented industries. In all, it looks balanced but as oil is getting closer to a bottom (it has fallen more than 60% from its peak last year), chances are energy is going to start making a come back while consumers will start enjoying wage growth due to inflation and low unemployment.  So this would call for a bullish 2016 based on net profit growth.  Assuming PE ratios will remain the same next year and we get a 3% GDP growth plus 3% inflation, my guess for the S&P 500 for 2016 is 2,250-2,300. Basically, about the same number I had projected last December for this 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 = Bearish trend being challenged
Long Term Trend = Bullish

No comments:

Post a Comment