Elliott Wave Training

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Sunday, August 31, 2014

Elliott Wave Analysis of the SPX (update)

This is a update of the last post.

The trend from 1904 appears to be be in a final 5th wave, short term above 1999 targets higher, if a small gap up (some European markets argue for strength on Monday) then it can suggest  its in wave iii of [v], so we should see a decent move of around 10 points or so.



There are other markets like OEX, NYSE DOWCOMP & TRANSPORTS that have still yet to make a minor new high, so next week i think we see the final finishing touches to the upside.

 The bulls have had a good run but now is not the time to be complacent, the potential for a strong reversal is very real. I forewarned readers about a reversal prior at the July highs see here: http://wavepatterntraders.blogspot.com/2014/07/elliott-wave-analysis-of-xlf-spx.html

I am expecting a much larger decline once the move from 1904 is finished. Using the SPY, we can see that we have a 5 wave move from the FEB 2014 lows, the volume on this last move has been considerably lower, that's the hallmark of a terminal 5th wave.








Sunday, August 24, 2014

Elliott Wave Analysis of the SPX (update)

This is a follow up to the last post on the SPX http://wavepatterntraders.blogspot.com/2014/05/market-report-are-you-ready.html

Back then i was looking at a possible ending diagonal to end wave [5], although i wont bore readers with what happened next, suffice to say its morphed into a ugly impulse wave. Not exactly as i would have liked, but this market has been relentless and destroyed the bears.

Back then i was looking for a number of things to happen, we never even came close to confirming the ending diagonal as it morphed into a 5 wave looking impulse wave. Obviously it stands to reason that we  had to adjust our bias and follow the market higher again. Its now once again that i suspect the bulls need to be very careful as we could again be close to completing a large 5 wave advance from the Oct 2011 lows.

Before




After


The short term chart suggests that above 1963SPX targets more upside, its a few gyrations short of a completed 5 wave move for wave 5 of [5], so it likely sees the 2000 - 2020SPX area before it would appear completed.


Its then that i think the bulls need to be very careful about the dangers of a strong decline. A decline that could see the 1700-1650SPX area tested. A near 3 year up trend has likely converted most traders into thinking the market can "never go down" they said the same at the 2007 and 2011 peaks.

The market has a nasty habit of changing its mood at unexpected times.

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Saturday, August 23, 2014

Elliott Wave Analysis of Gold (GLD)

The move from 129.51 so far appears to be in 3 waves, (1345 on XAU/USD), as long as the move remain in 3 waves there is still a strong chance we see a move to target 130 again.

We have been using the same script on Gold for a few months and the range we are seeing still fits well for a large triangle which we suspect is a 4th wave.

 Before




At this stage i don't think wave E of the triangle is completed, if the short term decline from 129.51 remains as a 3 wave decline then there is still scope for a move back to 130.

The bulls need a strong break above 125 to suggest a move higher, short term a grind lower towards 121 is still possible but the bullish case rests on remaining above 119.43.


So it you are looking to get long Gold, then it maybe an idea to wait for a move above 125 first.

Overall i am still bearish and looking lower, but short term i am not convinced this is in wave [5] and targeting 110 or lower.

Although if we were to see 110 it will be a great buying opportunity, but i will worry about that later.