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 ; )