Elliott Wave Stock Market Update - March 25

The market fell to a lower low on Monday at 2191 and has rallied substantially since then. This doesn't mean that we are seeing "the bottom" but rather a relief rally from an extreme oversold condition and the ending of a bearish 5 wave count. Hard to see how far the counter-rally could go but the next level of resistance is at 2855 so there is plenty of room to go. Ideally, we would see an ABC test 2855 or the 50 DMA in the next week or so and then see another strong sell-off towards sub-2000 levels. Given how the numbers from how the number from coronavirus is rising, we might see the next intense sell-off wave when cases are in the hundreds of thousands or even over a million. I said last week that we were going to surpass China in coronavirus cases this week and unfortunately it might happen by the end of the week. But that's not even what would cause a complete market collapse, it is the ongoing realization that our government is not capable of handling this crisis. We now have Trump declaring that he wants the country to go back to normal by April and that the media is making this a big deal to "hurt his re-election chances". All these contradicting messages and the absence of a coherent strategy will ensure we will have the most cases in the world by far and an economy that could go into not just a recession but a depression. The strategy of doing business as normal and ignore the hundreds of thousands if not millions of people dying can only work in Trump's brain.

Stay healthy and safe!

Short Term Trend = Bearish
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

Elliott Wave Stock Market Update - March 21

Two weeks ago I mentioned that it was just a matter of time when all the states would be infected with the virus and unfortunately the entire mainland is now infected. The drop in prices already reflects the virus itself, what the market is not able to predict is the government response which is nothing short of a complete disaster. Today, we are just behind China and Italy in infections and looking at the numbers we will have more cases than China by the end of next week and until the government declares a nationwide lockdown, the problem is not going to go away. I am in California and we have a governor that takes this very seriously so if we get lucky, we might be able to keep to flatten the curve of infections. But what stops people coming from other less strict states from infecting us back? the whole thing is so stupid and I can't believe we are stuck with an imbecile making national decisions at this time of crisis. Which brings me to the market and why it seems likely that the sell-off will continue to extreme levels. Right now, things are so bad that it is impossible to predict when this will end so prices are probably headed towards an extreme drop like we had during the financial crisis if not worse. No monetary policy is going to stop the fall as the country will not be able to function normally until a national lockdown is in place which under the current government looks unlikely. So while we might see some counter-rallies here and there, I see prices headed towards sub-2000 fairly soon and possibly headed towards 1500 depending if the number of infected are going to be in the hundreds of thousands or in the millions. Right now, I think we will be well over 100K by the end of the month.

Stay healthy and safe!

Short Term Trend = Bearish
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

Elliott Wave Stock Market Update - March 16

The market has plunged again. Despite having one of the strongest rallies ever on Friday, prices had an almost -12% decline. One of the biggest in history. So, looking at the count it seems like the top made on Friday was a W4 and there is still more downside to come on a W5. Support as I said last week is 2346 which is not looking like it will hold.  Below that is 2134 and if that doesn't stop the selling then there isn't much to hold the market until 1867. The Feds are now basically almost out of bullets as it dropped rates to near zero and are implementing QE like efforts but the problem we now have is not monetary. It's an admission that we are going into a recession and we have no idea when it will stop or how bad it will get as the worst numbers have not even come out yet. Trump has gone from saying the virus under "tremendous control" to "maybe the virus will last until August". Had Trump actually listened to experts in early February and taken the whole thing seriously as any normal person would, we wouldn't see the crisis we are seeing right now. So while the virus is a black swan event, it could have been handled completely different. The sad thing now is that blue states are moving ahead on their own with the most strict measures and the Federal government seem to be following the blue states lead with the red states being left behind. What this means is that red states are now the most unprepared for this because they have been trusting Trump all along with his "expert" assessment of pandemics and viruses. Trump is basically done despite giving himself a "10 out of 10" on his handling of the virus.

Stay safe and healthy!

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 13

The market staged a strong counter-rally today after the market bottomed in the 2300+ area (taking into account pre-market prices), posting one of the strongest rallies since 2008. However, the week closed -8.43% and in a bear market territory. Assuming the sell-off this week is a completed C wave, we should see a continued bounce towards a test of the Trend Average before another bearish leg to lowers lows. However, if the market makes continues to sell-off early next week then we are looking possibly at a W3 which much lower prices to come in the near future. Considering the really bad news will probably come later next week or in a couple of weeks, a continued rally would make sense before another plunge. The nation is finally officially on alert now that Trump announced a national emergency (about 2 weeks too late) and the panic is just barely getting started. So the fundamental picture favors substantially lower lows. Whether they will come in the next few weeks or a few months down the line remains to be seen. At this point it's obviously impossible to predict the ultimate bottom but I think if the number of infections end up being in the hundreds of thousands we could be looking at a similar drop percentage-wise as the one we had during the financial crisis from all-time highs. The equivalent to 666 in today's numbers is 1450 more or less. So perhaps, this is a chance to multiply your capital after patiently waiting for years as I am sure once everything clears up we will see prices go back to all-time highs.

Stay safe and healthy!

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 12

The market plunged today almost 10% in what was basically panic selling. Trump's attempt at calming people and the markets didn't go too well, specially when he banned travel to and from Europe but not UK or other parts of the world?! His ineptitude is shining bright and only the blind can not see. I mentioned yesterday that 2600 was key monthly support and now that the level has been breached we are looking at 2346 as the next stop. If that support doesn't hold then prices might go down to as low as 1850. Assuming what we are seeing now is a W3, a 5 wave down structure would target 2000. I assume there will be a strong bounce from the bottom but it's not a given. We might just see a sideways move before another bearish leg since the REALLY bad news are barely just now making headlines. The lack of testing I mentioned yesterday will be exposed in a matter of weeks and only then will we know what we are truly dealing with. I started transferring funds to my trading account but won't make purchases yet unless I see something ridiculous like 1500. This sell-off has gotten ahead of itself but a true bottom will probably take some time.

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 11

Prices fell to a lower low as expected after a rally yesterday and today's low went below the 2728 multi-month support I mentioned on Monday so there is a good chance 2603 will be tested. We might see strong counter-rallies like the one on Tuesday but they will probably be sold into. Putting waves aside, the problem we now have is just barely getting started. The problem is that we are more like Italy than China or South Korea. The reason the corona virus spread so fast in Italy is because they had some cases that were undetected for over a month, this means the virus had more than a month to spread all over the place and now the entire country is in quarantine and a recession there is virtually assured. In the US, we have a similar situation. There are people who have not been tested who carry the virus and are spreading it without knowing. Is not only until we have plenty of test kits available that we will know the true number and then figure out what to do but by then we probably will have cases in the 10's of thousands. The Trump administration needs to take this very seriously before it becomes a national disaster. Trump and his followers have been going around comparing this virus to the flu which has killed 20 thousand in the last year. Sounds like a few dozen dead is negligible at this point? yes if you are a simpleton. What this type of thinking doesn't take into account is A) We have a flu shot, which saves approximately 60 thousand lives per year and there is nothing against this corona virus at this point. B) The fatality rate is 2 to 3 times as deadly as the flu so a simple calculation yields 160-240K additional deaths in a year if the corona virus is left to propagate like the flu. So the government MUST start restricting travel not just from foreign countries and across state lines right now, set up zones and declare a national emergency. The more Trump goes around trying to minimize the problem, the bigger he will make it as his loyal followers seem to believe everything he says and will go around like nothing is happening. This time, Trump can't divert attention, blame Obama or BS his out of this one. We need someone who listens to experts and follows their advice not someone who is just worried about the economy and his own election prospects.

Anyway, now that I've said what has been on my mind, I predict a recession this year. The market might find a bottom at 2600 but there is a high probability we will see lower prices given the backdrop. Major long term support is 2346 if 2600 breaks and then 1860 which would reverse all gains made since Trump took office. In the event of massive panic, we could see severe selling to as low as 1450 which would be a gift!! I am sitting on a pile of cash and maybe I'll get to spend it all during one of these panic attacks.

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 09

Prices fell through support in what is now confirmed as a C or W3 wave. I was hoping we would see the 50 DMA tested first but the market followed the bearish set up I mentioned as a significant possibility on Friday. If the C wave ends up being the same length as the A wave then we should see long term support at 2603 tested before a major rebound. There is also multi-month support at 2728 which the market came close to breaching today. The corona virus has managed to create panic and now the ongoing oil market share wars just adds another layer to the problem. In the end, lower oil prices is good for the consumer but not so good for oil companies. But the corona virus seems like it will be getting a lot worse before it gets better. There are now 34 states with reports vs 20 when I mentioned it on my last update on Friday. Given the current government response (which creates confusion among the loyal GOP followers), this virus will likely continue to spread as it is past the point of containment. Compare how China and South Korea have handled it vs Iran and to a certain extent Italy. China and S Korea were very aggressive with testing, quarantine and public information once they knew they had a problem. Iran and Italy were more unprepared and now the virus is running rampant while China is almost free from it and S Korea is reporting a possible peak. Actually, Italy just announced today a national quarantine which is the last resort method of stopping it. I hate to be a pessimist but we might go through what Iran and Italy are going through right now due to mixed messages by Trump, lack of testing, etc. It will be a rough few weeks/months for us and a technical bear market should come in this timeframe. The million-dollar question is whether this will cause a recession. Personally, I think a recession is imminent as well and that is why the Trump administration is panicking and will be launching stimulus right away to prevent it. If only they were as concerned on how to stop the spread of the virus..

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 06

The market had a very volatile week as expected and we could see more of it next week. I still think there is a good chance the market will make a higher high and possibly challenge the 50 DMA before resuming another bearish leg but the lower high made a few days ago opens the door to aggressive selling if support at 2822-2855 breaks this coming week and will confirm a C or bearish W3. We are seeing now virus cases in 20 states and before you know it, it will be in all of mainland US given the fact that travel is not being restricted. Also, Trump trying to make it look like the situation is not serious is not helping. If you have this virus all over the country then there will be more than an excuse for a bear market. I know Trump thinks about his own interests first more than anything else and I am sure he doesn't want people panicking but how he handles this situation will come back in November. This time, he can't ignore science or blame Hilary or Obama for it.

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 04

The market has been very volatile in the last couple of sessions and it shouldn't come as a surprise given the extreme sell-off last week. The surprise comeback by Biden was the excuse today for the rally but it is just an excuse as the underlying reason the market started to panic remains in place. If anything, the virus is now popping up everywhere and will only continue as people I am sure people are now infected and don't even know it. So perhaps we will see prices rise to gap resistance at 3250 before selling off again. It should be an interesting next few weeks.

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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

Elliott Wave Stock Market Update - March 02

The market staged the massive counter-rally I mentioned on Friday and we could see more upside up to gap resistance around 3250. I think the damage is already done and rallies will be sold into at the right levels given the the likelihood of a major increase of confirmed corona cases in the US in the next week or two. What will be interesting to see is if there is a national emergency declared by FEMA. I am sure Trump will be displeased with those that say the corona virus is NOT a hoax and will test common sense (again) in this country.

Short Term Trend = Bearish
Medium Term Trend = Bullish trend being challenged

Long Term Trend = Bullish trend being challenged

* 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