Sunday, May 24, 2020

Elliott Wave Stock Market Update - May 24

The market had a strong week by clearing resistance and positioning itself towards a challenge of the 200 DMA at 2999. Also, there is an IHS that points to a challenge of all-time highs if prices are able to break out. This current scenario would have been inconceivable just a few weeks ago given all facts of the economy and the virus but the market is behaving like there is nothing to worry about. I personally thought prices would be much lower now since we have close 100,000 deaths due to the virus, 20,000+ infections every single day, and record unemployment. But the market is either very smart or very delusional. This virus problem is not going away anytime soon and looking at what some states are doing, we are going to have a larger second wave which will double the sick and the dead, unfortunately. One doesn't have to be a scientist to see the current disjointed approach to the problem doesn't work, especially when you start politicizing a national health emergency. So I don't see a V shape recovery the market seemingly is trying to price in and I am just going to continue to save cash until I see real pessimism (or realism in this case) take hold. There is going to be a wave of major bankruptcies coming soon.

I hope everyone is having a safe holiday weekend!

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

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