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.

Wednesday, November 24, 2010

S&P 500 ~ Intraday Update 1 ~ 24 November 2010

Big rally today!

It looks like wave (c) of [b] is underway:

Possible target 1204ish ((c) = (a))

Tuesday, November 23, 2010

S&P 500 ~ Elliott Wave Count 23 November 2010

The SPX declined much more than I expected yesterday. It sold off almost 1.5 % and is near the monthly lows again:

1173 hasn't been breached yet, so, it's still very possible that wave [b] to 1210ish is underway. Should the 1173 level break though then I think we're going to 1160ish or even much lower towards 1130 (H&S target, see chart at the bottom). There's even a fractal which supports lower prices for tomorrow as long as 1183.5 isn't surpassed:

So as you can see, it could go either way tomorrow in my opinion. As long as 1173 holds 1210 is still possible but below it 1160 or even 1130 is likely.

S&P 500 ~ Intraday Update 1 ~ 23 November 2010

SPX down 1.5 % - not what I've expected...

If we don't get a bounce soon we may go lower towards 1160ish into late November (or even much lower to 1130ish; there is a pretty nasty H&S in the hourly chart...)

S&P 500 ~ Pre-Market Warm-Up 23 November 2010

Well, it seems as North Korea doesn't like my count... the ES sold off overnight and is now near yesterday's lows.

So it looks like wave (b) wasn't completed yesterday and is unfolding in a flat. I'll post some charts later after the open.

Monday, November 22, 2010

S&P 500 ~ Elliott Wave Count 22 November 2010

As expected the market turned when it hit the channel line and rallied into the close. I think wave (b) finished at 1185 and wave (c) to 1212ish ((a) = (c)) is underway now:

Should we get a convincing break above ~1215 it's likely that wave 4 already bottomed at 1173 and wave 5 to 1245-50 (5 = 0.62*1 = 0.38*3, iH&S target) or even to 1290 (1 = 5) is underway.

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

The SPX is down about 1 % at the moment and has reached the upper channel line again:

If the market finds support here, then I think this is wave (b) and wave (c) to 1210-20 should start soon.

Sunday, November 21, 2010

S&P 500 ~ Elliott Wave Weekend Update ~ 21 November 2010

Last Friday unfolded as expected: an early drop to complete wave iv and then a wave v rally into the close:

Tomorrow is Monday again and as we know most Mondays are up. However, the last two were actually down and I think, even though the ES just opened higher 6 handles, it could happen again. In my opinion, wave (a) is or is almost finished and a (b) wave should follow. Wave (b) may test the declining channel again before a wave (c) starts to complete wave [b] later this week.

Medium term nothing has changed, I think wave 4 is still underway and may be completed in a week or two or so:

Friday, November 19, 2010

S&P 500 ~ Elliott Wave Count 18 November 2010

The SPX gapped up back into the channel. It didn't stay long in the channel though. By 10.30 am the upper channel line was breached and the market rallied to 1200 which also was the high for the day.

In my opinion wave [a] of 4 (of a flat/triangle) bottomed at 1173 and a [b] wave is now underway. Waves i, ii and iii of (a) likely finished yesterday and wave iv may have a little more to go today, possibly retesting the upper channel line. After this a rally to ~1207 should occur and complete wave (a) of [b]:

Wednesday, November 17, 2010

S&P 500 ~ Elliott Wave Count 17 November 2010

Quite a boring trading day today...

The SPX moved along the lower channel line all day long:

This is my short term wave count if we rally tomorrow and get back into the channel but both possibilities I mentioned today can still happen: either a rally back into the channel and a short squeeze or a failure and a sell off down to 1163/64.

Medium term still no change in my wave count:

S&P 500 ~ Intraday Update 2 ~ 17 November 2010

The SPX still is right below the lower channel line:

If we somehow manage to get back into the channel I think we'll get a short squeeze and close yesterday's gap. Should we fail though then a move lower to 1163/64 is likely.

S&P 500 ~ Intraday Update 1 ~ 17 November 2010

The SPX is at the lower channel line right now. Bears are in trouble again if we can regain the channel imo:

Tuesday, November 16, 2010

S&P 500 ~ Elliott Wave Count 16 November 2010

The SPX broke the 1196ish level and lost almost 20 handles today. We're are outside the channel now:

Until yesterday the action since 1226 looked corrective. After today's big sell off though, we could count it motive, as a series of 1-2's and today as a third wave. As long as 1156ish holds this isn't my preferred count but I'll keep it in mind if prices keep going down the next few days.

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, even though we got a big down day today the rally from 1040 got retraced by less than 30 % so far, which is quite a common retrace for a fourth wave:

Below 1156ish another count is likely underway (a big flat since April 2010 probably).

S&P 500 ~ Intraday Update 1 ~ 16 November 2010

The SPX reached my second target area in the low 1180's around the 23% retracement:

Let's see if we get a bounce here, if not this would look really bad for the bulls imo.

Monday, November 15, 2010

S&P 500 ~ Elliott Wave Count 15 November 2010

The SPX tried to break out of the channel - failed though and sold off into the close to finish the day near the Friday lows.

The channel is still intact, so the short term trend remains down:

Medium term, there is no change in my count:

Sunday, November 14, 2010

S&P 500 ~ Elliott Wave Count 14 November 2010

Short term, my count hasn't changed since my last update:

I think the low on Friday was either wave [a] of 4 or already all of wave 4. I expect the 1196 area to hold, if it doesn't the next support area is in the low 1180's.

There is a pretty nice channel in the ES:

A breach of this channel should confirm that either wave [b] or already wave 5 is underway.

Have a nice week! ; )

Friday, November 12, 2010

S&P 500 ~ Intraday Update 1 ~ 12 November 2010

Target reached, let's see if the market finds support here:

If the SPX breaks lower the next target is the 1180-1185 area.

S&P 500 ~ Elliott Wave Count 11 November 2010

The market retested the Wednesday lows and then rallied for the rest of the day to finish the day just a few handles lower. Overnight the ES has sold off again and hit 1193 (= SPX ~1196) about 90 minutes ago which I mentioned as a possible objective for this fourth wave:

As I've already said a few times, wave 4 should unfold in a triangle or a flat. If we get a convincing break above 1230 wave 5 to 1300 should be underway!

Wednesday, November 10, 2010

S&P 500 ~ Elliott Wave Count 10 November 2010

The expected correction continued today and has reached 1204 so far:

Since AH the ES is down huge I think the wave 4 scenario is much more likely now, so the market should stay in a range of ~1190 and ~1230 for the next one to two weeks. Since wave 2 was a zigzag, wave 4 should unfold in a flat or a triangle (rule of alternation).

Tuesday, November 9, 2010

S&P 500 ~ Elliott Wave Count 9 November 2010

The move from 1040 to 1227 is almost a perfect 1.62 extension of wave 1, so I'm tending to label the high at 1227 as wave 3. Over the next couple of weeks a sideways wave 4 should unfold, a possible objective is the previous resistance at 1196ish:

The other count I mentioned in my last update is still possible, but as I said the counts are very similar and both lead to a end of year rally to 1250 or even to 1300.

Sunday, November 7, 2010

S&P 500 ~ Elliott Wave Count 7 November 2010

The SPX made a new uptrend high this week above 1220 and closed near the highs of the week at 1226:

As you can read in my outlook on November there are two slightly different bullish counts I'm tracking right now:
Either the SPX is already in wave 5 and should continue its rally into December to about 1300 or we're at the very end of wave 3 and are about to enter a sideways wave 4 consolidation which should last a few weeks. After this wave 4 though the SPX should rally to 1300 as in the first count.

You can see that the only difference is that in the first count the rally towards 1300 should start in November while in the second one the rally is postponed until December.

Thursday, November 4, 2010

S&P 500 ~ Elliott Wave Outlook on November 2010

Review of October:

When I wrote my outlook on October I was quite undecided on which way the market was going from there. Just a few days later though I preferred the bullish count when the market approached 1180ish. But that basically was it for October. The rest of the month the market just went sideways awaiting the elections and the FED.

Outlook on November:

November started like July and September - with a big rally. Today the SPX made a new yearly high!, who would have thought that just a few months ago?

Yesterday I labeled 1178 as the wave 4 low and expected wave 5 to unfold. The first objective (1220) for wave 5 has already been reached today. However I don't think this was all of wave 5, I think this wave will reach at least 1250, may be even 1300 by the end of this year:

As long as 1200ish holds I'll keep this count as my preferred one.

My top alternative count at the moment is that wave 3 is still underway. Reason for this count is that there never really was a big correction since the 1040 low. So the sideways action in late October was possibly only wave [iv] of 3 and not wave 4. If that's the case wave 3 should top between 1220 and 1230 followed by a fourth wave down into the 1180 area again by the end of this month. After that wave 5 should start in December and reach 1250-1300 by the end of 2010.

To sum up, as long as 1200ish holds I'm expecting a rally to 1250-1300 by the end of this year, else I'm expecting a short trip to 1180ish before the rally to 1250-1300 - so not much of a difference between the two counts actually.

Long term my count hasn't changed. I'm expecting a new all time high in 2011/12:

As I said before, the problems which caused the financial crisis haven't been solved but as long as it keeps going up don't fight the trend ; )

S&P 500 ~ Intraday Update 1 ~ 4 November 2010

The SPX is up huge today back above 1200 near the April highs at 1220. : )

I'm going to post my monthly update after the close today.

Meanwhile something very funny I found on the Slope:

Go to

Then to Get Directions from Japan to China and read step 43. LOL!

(or try USA to China and read Step 29 : D)

Wednesday, November 3, 2010

S&P 500 ~ Elliott Wave Count 3 November 2010

Elections are over. FED day is over.

So, will the stock market finally pick a direction again?

I think the alternative short term count I posted on Monday is underway. As long as the wave [e] wave low at 1178 holds, this count remains valid:

Wave 5 should be underway now. Possible objectives for this wave are 1220 (April high), 1250 (inverse H&S target) or even much higher around 1300.

S&P 500 ~ Pre-FED Update 3 November 2010

FED in 5 minutes.

Get ready for the roller coaster ride : )

Monday, November 1, 2010

S&P 500 ~ Elliott Wave Count 1 November 2010

1183 - 1186 - 1186 - 1182 - 1184 - 1183 - 1184 (daily closes)


In my opinion, wave 4 is still underway. The two different wave 4 counts I posted in my last update are still valid, I see now though another slightly different possibility in case the SPX exceeds 1200 already tomorrow:

As you can see medium/long term these three counts are similar, only short term there are some differences.

Elections tomorrow and FED on Wednesday, let's see which way the market is going after these events took place.

P.S. I'm going to post my outlook for November later this week. I think there is no point in posting it just before the elections and QE2 trying to predict the outcome of these events.