Friday, December 31, 2010

Thank you!

In my last post in 2010 I'd like to thank all the readers. Thanks for all the comments, the e-mails and the donations. Thanks. : )

if you have any questions/suggestions etc. you can contact me at: admin|at|wavaholic|dot|com

I wish you a happy new year!!! : D

See you in 2011 ; )

Thursday, December 30, 2010

US Dollar Update ~ 30 December 2010

The Dollar had a huge rally in the first half of the year, followed by a nasty sell off in the second half just to finish the year almost flat, so the inverse correlation between the USD and the stock market has worked out this year pretty well again.

If you have a look at the USD Index (dxy) you can clearly see the triangle which has been forming over the past few years:

Since I'm expecting a correction in the stock market early next year I think we'll get a rally back up to the trendline to possibly complete the (elliott wave) triangle. Supported by the FED printing machine I'm expecting the triangle to break downwards but whichever side it breaks there should be a nice trading opportunity sometime next year.

The €uro, the PIIGS' currency, most think the currency has failed and is doomed. I can't decide which currency is in worse shape though, the Euro or the Dollar...?

Looking at the EUR/USD chart, it appears to be some type of  a wedge/bull flag is forming. So if the USD Index is to go lower then the EUR/USD is likely to go higher:

Even though the DXY was almost flat for the year it was mainly because of the weak Euro. Against most other currencies the Dollar is way lower than a year ago:

In the face of the US and EU printing machines the safe-haven Swissie is hitting all time highs against both currencies. Since there isn't really any support below I've only drawn in the downtrendline - as long as it holds the USD/CHF is likely to go lower.

Also the Australian Dollar is hitting new all time highs. (Just spotted a nice little fractal (the two big red circles) - wish I'd seen it earlier...)

And also the USD/JPY is approaching its all time low.

So let's see which country devalues their currency fastest. I guess it'll be the FED, just because they are most experienced in printing money lol but let's see... : )

S&P 500 ~ Intraday Update 1 ~ 30 December 2010

The very last SPX update this year ; )

Wave (iv) seems to be underway now. After this sideways correction there should be one last wave up to complete Intermediate wave (1) in the 1280-1300 area early January.

1246 and 1233 are key levels - once below it wave (1) should have topped.

Currency update after the close today ; )

Wednesday, December 29, 2010

Q3 & Q4 2010 - Recap

As written in my previous post the SPX rallied about 13 % in 2010. By mid year the market was down 8 % though, so bulls gathered to strike back in the second half of the year.

On the first trading day of July the SPX hit 1010.91 which was the low of the year. Since then bears have been MIA.

After quite a nice July rally markets declined in August and the stock market crash signal appeared: the infamous infallible Hindenburg Omen!

For some reason the SPX refused to decline though, and even worse for the bears on September 1st 'bear slaughter II' started. The second 17 % 'correctionless' rally took the market back to the April highs!

Early November Ben announced QE2 - another $600 billion to buy bonds... great... the world was saved for the next few months... : )

I remember the good old days when a million was still a lot of money... Nowadays we're talking in hundreds of billions of dollars...

Well, with that much money it was pretty difficult for the market not to rise. So, the SPX kept moving higher in December and hit 1260.60 today, a new yearly high.

That was 2010 - 2011 coming next, can't wait for it : )

I have some gold, silver and usd charts ready which I'm going to post tomorrow/Friday. And on Jan 1st/2nd I'm gonna post the SPX outlook for 2011 and the time target for the new all time high... ; )

Q1 & Q2 2010 - Recap

I'd like to look back first before posting the different outlooks on Silver/Gold, the USD and the SPX. ; )

On a year to year basis the SPX rallied about 13 %, nevertheless we saw lots of ups and downs and I think bulls and bears alike were satisfied at some point during the year.

The year started as it usually does - with a top in January. Quite a nasty 10 % sell off into early February followed and bears were already celebrating the continuation of the bear market  (including me... well... : )).

What actually happened though was quite the opposite. A slow and steady rise took the S&P 500 above 1200 in April - a 17 % 'correctionless' rally within less than three months!

But in May the bears stroke back:

It was May 6th 2.45 pm when the Dow Jones fell almost 1000 points and all that within just a few minutes (only to recover most of the losses by eod...). It was the biggest one-day point decline on an intraday basis in history (known as the 'Flash Crash'):

After this event the SPX bounced around, with a downward bias though, so, by the end of Q2 the SPX was approaching the SPX 1000 level and it looked like this time the bears were right and the bear market had continued.

They were wrong again though...

Tuesday, December 28, 2010

S&P 500 ~ Intraday Update 2 ~ 28 December 2010

We saw this pattern before...

Above 1260 we should see 1270 imo.

S&P 500 ~ Intraday Update 1 ~ 28 December 2010

The SPX hit another new yearly high today at 1260:

Zoomed out (chart posted on Dec 16th):

At 1260 wave (iii) equals wave (i) so this could be the top wave (iii) (as shown in the chart above). Once wave (iv) is completed there is only one more wave up to come to complete Intermediate wave (1) early January.

I still like the price target of 1290 (wave 1 = 5) and the time target of January 5th (wave 1 = 5) for wave 5, so let's see if the market can achieve it ; )

Chart posted on Dec 1st (Time and Price target for wave 5)

Important support areas are shown in the first chart. Below 1246 the rally may have topped and below 1233 I think wave (1) is completed and wave (ii) to the mid 1100's is underway.

Friday, December 24, 2010

Merry Christmas!!!

to everyone!

Enjoy the time with your loved ones and your family : )

There'll be some updates next week, I think I'll post some gold, silver, spx and usd charts, but until then relax and enjoy Christmas! ; )

Wednesday, December 22, 2010

S&P 500 ~ Intraday Update 1 ~ 22 December 2010

The SPX has reached the inverse H&S target (see Monday update) at 1260.

As long as the market doesn't decline below 1240 and more importantly 1233 the uptrend is intact and we could still rally to 1280-1300 by early 2011:

And zoomed out (chart from Dec 16th)

Monday, December 20, 2010

S&P 500 ~ Update 20 December 2010

I don't have much time this week unfortunately... so just a very short update today:

The situation today is very similar to early December imo.

If so the SPX should continue to rally into Xmas (up to 1260+ or so). Below 1240 the uptrend is in danger, and below 1233 the rally likely topped today.

Friday, December 17, 2010

S&P 500 ~ Elliott Wave Count 17 December 2010

The SPX gained 1 handle today but still couldn't breach the 1247 resistance.

Once above it we should rally to 1260+ pretty fast:

And a bit zoomed out (chart from yesterday):

Below 1233, on the other hand, it looks pretty bad for the bulls and below 1220 even worse.

So let's see if we get a Xmas rally next week ; )

Thursday, December 16, 2010

S&P 500 ~ Elliott Wave Count 16 December 2010

The SPX broke out of the declining wedge today, rallied and then closed just a few handles below the yearly highs.

The move from 1233 appears to be a five wave rally (i.e. bullish) thus I think if today's lows hold we'll see new highs very soon:

I changed the count a little bit because the correction from 1247 to 1233 was too small to be a wave [ii]. Imo it counts better as an extended wave [v] (i.e. today's low was wave (ii) of [v]) but the target area (1280-1300) remains the same once 1247 is cleared.

Wednesday, December 15, 2010

S&P 500 ~ Elliott Wave Count 15 December 2010

Well, we got a small pullback today, so 1247 could still be the top. This pullback looks a little bit wedgy and corrective though so wave [ii] unfolding (to 1220-1230) is as likely as wave (2) (to 1100-1150) imo:

The important levels set in yesterday's post still apply.

Tuesday, December 14, 2010

S&P 500 ~ Elliott Wave Count 14 December 2010

So far, the SPX has failed to rally through my first target area between 1245-50.

There are now two possibilities:

- Wave (1) has topped today and wave (2) is unfolding now. I'll prefer this count if we get a convincing break below 1220ish:

- Above 1247, the September fractal is still underway and the market is on its way to 1300. If so, 1247 was probably only the top of wave [i] of 5, so waves [iii] and [v] are yet to come. I admit that wave [i] is quite long, if you have a look at the previous first subwaves of waves 1 and 3 though, you'll see that wave [i] was always longer than wave [iii] and [v]:

After wave (1) has topped (either today or early next year) a second wave should be unfolding and retrace 50-62 % of wave (1) early 2011.

Monday, December 13, 2010

S&P 500 ~ Intraday Update 1 ~ 13 December 2010

The SPX is rallying again today and has reached my first objective area (1245-50). In this area we've got some nice fibonacci relationships between the subwaves of this first wave up (wave (1)):

Wave 1 = 0.62*wave 3 = 1.62*wave 5.

Additionally it's the target of the big inverse H&S:

If the market just continues to move higher though then my second target (1280-1300) comes into play:

- Wave 5 equals Wave 1 at 1292
- 1280ish is the September fractal target
- At 1300 wave (1) of [C] equals wave (1) of [A] (666-956)
(- Time target early Jan (Jan 5th))

Sunday, December 12, 2010

S&P 500 ~ Elliott Wave Count 12 December 2010

On Friday the SPX moved higher and closed at a new yearly high at 1240!

The neckline of the inverse H&S is breached so I expect to see 1250ish:

Should the SPX decline below 1220 the uptrend is finished imo.

Thursday, December 9, 2010

S&P 500 ~ Elliott Wave Count 9 December 2010

The market gapped up today and hit 1235 for the second time this week. It failed to breach it though, so both scenarios are still possible.

Since the tape looks very bullish though I'm tending to the more bullish count (the "September count"):

There's even a nice little inverse H&S forming. If we break 1235 the iH&S target is 1250, right in my first target area.

Yes, I know I've posted this chart every day this week... : ) but there was also an inverse H&S in September... (LS red [4], H&RS pink (iv))

Wednesday, December 8, 2010

S&P 500 ~ Elliott Wave Count 8 December 2010

Both scenarios I explained yesterday are still possible:

The first one is that wave [ii] is underway. A break below today's low should confirm it:

Possible targets are the 1213 area (38 % retracement and (a) = (c)) and 1205ish (50 % and (a) = 0.62*(c))

The second one is the "September count". As I said yesterday if 1235 gets breached I think the market will just move higher into year-end:

In case we get above 1235 the first objective area at 1245-50 should be reached fairly easily.

If you compare the count above with the one below you can clearly see the similarities. Both had a very short first wave and a long third wave. The fifth wave back in September equaled wave (iii). So if this happens again, wave [v] may rally to 1280 ([v]=[iii]) which is near my second objective area at 1290.

To sum up, above 1235 we should see 1245-50 soon and below 1220 wave [ii] is underway to 1205/1213.

Tuesday, December 7, 2010

S&P 500 ~ Elliott Wave Count 7 December 2010

The SPX gapped up to a new yearly high at 1235 today, sold off in the afternoon though and closed unchanged.

Wave 5 has already rallied 60 handles and came near my first target area (1245-50) today. If there is still a second wave to unfold it should happen now imo, so a retracement down to 1200-1210 this week followed by another rally towards 1300 later this month:

Another possibility is that the market continues to copy September. I've posted this similarity a few times already and it's still looking very good:

So, should we rally past today's high of 1235 I think we're on the September trip and just moving higher into year-end.

Monday, December 6, 2010

S&P 500 ~ Elliott Wave Count 6 December 2010

Since not much happened today in the markets I'd like to post the following chart:

I just love this chart! The weekly MA 76 & 200 work so well! The orange line is just a guess how red wave (2) (see long term chart below) could unfold. I think we'll get a retest of the MA 76/200 early-mid next year and then a bounce higher.

Short-term I'm still looking for a wave [i] high followed by wave [ii]:

The SPX is approaching the yearly highs and imo this is a good place for the high of wave [i]. So, I'm expecting a second wave to unfold soon. A possible objective is the 1200ish area. The market should find support there and then move higher.

Thursday, December 2, 2010

S&P 500 ~ Elliott Wave Outlook on December 2010

Review of November:

The break below 1200 mid month confirmed that a bigger correction was underway. I then defined the target for wave 4 to 1155 to 1185 by the end of November. On November 29th the SPX hit 1174 which seems to be the low of wave 4.

For the month, the SPX declined a whopping 3 handles!

Outlook on December:

It looks like all is set up for a big end of year rally. Yesterday the market rallied more than 2% and today again more than 1 % and is approaching the yearly highs. Wave 5 of (1) should be underway now:

Price targets for this wave are the 1250ish level (iH&S target and wave 5 = 0.62*wave 1) and the 1290 area (wave 5 = wave 1) and the time target is early January 2011 (wave 5 = wave 1):

Long term nothing has changed:

Still expecting a big rally to new all time highs next year/2012.

In my opinion there is just one possible alternative count worth to be noted:

At the moment everything looks bullish though, so I'm not expecting this to happen. But we learned in September that markets don't have to go down if there is a H&S, a Hindenburg Omen and seasonality....  So just be aware of that. ; )

I wish you a happy Christmas season!

S&P 500 ~ Intraday Update 1 ~ 2 December 2010

The SPX is up another percent today and it really looks like September imo:

Back then, we got a 55 point handle rally within three days (Sept 1st-3rd (Wed-Fri)). 
So far, the market has rallied 40 handles and there are 1.5 days left to do the last 15 points. Let's see if we make it : )

I'm going to post my outlook for December today after the close. ; )

Wednesday, December 1, 2010

S&P 500 ~ Intraday Update 1 ~ 1 December 2010

The SPX is up more than 2 % today and above 1200. If we get a close around these levels (preferably above ES 1206) then wave 5 to 1250/90 should be underway.

The bottoming processes of waves 2 and 4 look very similar imo:

Back in late August 1040ish was tested three times and then on September 1st we got a huge 30 handle rally, which was the start of wave 3 up.
Late November the 1175 area was tested three times as well and today, on December 1st, we've got a 25 handle rally so far which might be the start of wave 5.

S&P 500 ~ Pre-Market Warm-Up 1 December 2010

The last few days were quite roller coastish - nevertheless and the SPX has been trading in a small range between 1173 and 1200 for the last two weeks.

As mentioned already a few times I'm waiting for a break out of this channel: a break below 1173 and the end of year rally is in danger and we may see 1130ish until Xmas - a break above 1200 though may very well be the start of the eoy-rally to 1250/1290:

Break out???

Monday, November 29, 2010

S&P 500 ~ Elliott Wave Count 29 November 2010

This morning the markets were sharply lower. The monthly lows held though and the indices rebounded and closed lower only a few handles.

Today's sell off may have been just a retest of the upper channel line:

It's very possible that today's low will be labeled as the wave 4 low:
Wave 2 took about 14 days to unfold. - Today is the fourteenth days since the top. So a nice time relationship between the two corrective waves within this motive wave.

I wrote about two weeks ago how wave 4 should unfold:

"A fourth wave usually retraces 23 to 38 % of wave three and into the territory of subwave four of three. This results in a target range for wave 4 of 1156 to 1196. Wave 2 took about three weeks to unfold, so if we expect a similar duration for wave 4 this puts us to the end of November. Lastly, waves two and four usually alternate. Since wave 2 was a simple zigzag wave 4 should unfold in a flat or a triangle (or a combination thereof)."

So far, this looks pretty good, let's see if the PIIGS and North Korea allows the market to go higher... : )

If today was indeed the low of wave 4 we can try to define some possible price and time objectives for wave 5:

Wave 1 measures 120 points and lasted ~27 days. Wave 3 was about 1.62*wave 1 in price and 2*wave 1 in time. Wave 5 equals usually wave 1. So, this gives us a price target near 1300 and a time target early 2011 for wave 5 (and wave (1)):

As mentioned before I'd like to see a convincing break of SPX 1200 before turning bullish.

Friday, November 26, 2010

S&P 500 ~ Pre-Market Warm-Up 26 November 2010

Futures are down again and the triangle doesn't look that nice anymore. In the ES though there is a very nice triangle forming and if we get a break above 1200 the long expected rally to 1250ish may be underway:

The situation in the SPX has changed a bit. I don't think we're in a [b] of a triangle anymore, I think that either wave 4 bottomed at 1173 and wave 5 is already underway or we'll get a wave [c] down to the mid 1150's or even down to 1130 over the next few days (btw the ES count works for the SPX but it just doesn't look right imo):

To sum up, I'm bullish above 1200ish and bearish below 1173.