S&P 500 ~ Elliott Wave Count ~ 9 May 2011

I think nobody would have complained if the market had opened only between 11.45 and 12.15 yesterday... ; )

As already posted last week the downtrend line was broken on Friday and then successfully retested the very same day:

If we get a convincing break of the 1354-57 area the odds are very high that we'll see a new high in my opinion. Above 1357 the next levels are 1370, the low 138x's and then 1400.


As you can see in the ES chart below we also got a break and retest of the downtrend line:

As long as the uptrend line, which is now in the low 134x's, holds we should go higher. A break of 1352-55 should lead to a rally to 1373.

EUR/USD ~ Update ~ 9 May 2011

(Read my last EUR/USD update here)

After the break of the 1.43 area earlier this year I expected the EUR/USD to rally to 1.50-51.

Last week the EUR/USD almost hit this target and has sold off since then back to the break out area of 1.43ish which I think is now strong support (1.41-43ish):

Despite the big correction of almost seven cents I don't think that this is a new medium/long term downtrend. As aforementioned 1.41-43 should be strong support and unless we get a convincing break of this area I still think we could see one more rally to 1.50-51.

Should we get a break of the support though then we may go down to 1.35ish or even 1.30 but I'll post a new update if it happens.

S&P 500 ~ Intraday Update 1 ~ 6 May 2011

The ES hasn't breached 1355 yet (SPX 1357) so the bears are still in control.

We've got quite a big sell off in the past two hours which can either be seen as a backtest of the broken downtrendline or the beginning of wave (c) down.

As said earlier today's rally could only be a (b) wave i. e. a (c) wave to 1330 or even a bit lower would follow next week. Another possibility is that today's rally is a first wave of wave [iii] up and the most recent sell off a second wave.

If we rally above today's high I think wave [ii] is over and wave [iii] underway. This scenario is confirmed if we break SPX 1370.

Should the SPX get back into the downtrend channel we broke out earlier today then I think wave (c) is more likely.

ES ~ Pre-Market Warm-Up ~ 6 May 2011

Today is the 1-year anniversary of the flash crash:




Pre-Market it looks like this year we'll see more of a flash rally than a crash:

The downtrendline was breached after the release of the employment numbers and a few minutes ago we hit the 50 % retracement of the most recent downmove. As written yesterday this rally could only be a (b) wave i.e. another sell off 1330ish should follow next week.
Should we rally above ES 1355 though then I think wave [ii] is over and wave [iii] is underway.

EUR/USD, Gold, Silver ~ Update ~ 5 May 2011

The EUR/USD declined almost three cents today and is now just above the support at 1.45:

If you have a look at the last four months you can see that we always got the same pattern over and over again: rally to a new high - retest of the old high - rally to a  new high - retest of the old high - ... -

And as long as this continues, i. e. the support at 1.45 holds, I expect the rally to continue. The next target should be around 1.51.


Gold (along with silver and oil) declined quite a lot this week. So far the uptrend is still intact though. The uptrendline is around 1400:

Silver declined 15$ or 30 % this week alone! So, I was right about a correction at the 50$ level but totally wrong last weekend when I thought we could see another rally to new all time highs before we'd get a real correction.

We may get a bounce around these levels (blue line). Most likely it'll be only short-lived and another sell-off may follow down to around 30ish by June/July (A-B-C correction).