Market Update: Still Bullish Despite All These Bears
The Nov 18th update stated:
I would like to see the S&P's make a new high early next week, hopefully Monday, followed by a retest of Friday's low (support at 1392 SPX), then rally nicely to a new high at roughly the 1415/1420 area. We'll be adjusting the target in the forum as soon as we see where we find support, but whatever THAT high is, it will be the first time the Elliot pattern from the summer lows might seriously be at risk.
As promised, I raised the 1360 level, but we still haven't seen a signal to go short this market. We sure did get a new high first thing Monday, followed by a pullback and then another high. Even though this week's action generally followed my plan, and we expected every move the market made, it still looked pretty random and sloppy.
In fact, this week fooled traders with overwhelming bullish or bearish tendencies, and basically everyone without an understanding of true, unbiased Elliott wave analysis. The first chart posted at the opening bell on Monday stopped any of our members that even thought of going short, clearly showing a triangle forming well before many other traders would see it. Once we had the triangle in our sight, all we needed to do was wait for the rest of the triangle to play out and be rewarded by the expected "thrust" from it.
Sure enough, we thrusted out of the triangle on Wednesday morning, at which point the chart above was posted showing the expected larger degree 4th wave. What traders saw as a breakout on Wednesday was nothing but an ending of a triangle break. After closing up to the B wave on Wednesday, it was no surprise to me that Friday's morning gap down was going to be part of a 4th wave correction. But what the average trader saw as the start of a larger decline, we knew to be only the completion of the first abc pattern of a larger corrective 4th wave. Just when the bears really started selling, our charts were screaming to buy!!
So, was the market trying to top into Leonardo's Fibonacci date? It's hard to say, but now were no longer watching for it - if this is the cycle to turn this market we'll know by next week's action. If not, I don't want a bearish bias keeping us from further long trades. The long side has treated us well and I plan on being there until my work tells me not to. This weekend's charts posted on the forum will have the same idea as above, but the corrective pattern has been revised a little.
For next week, I have 2 ideas for the continuation of the current 4th before continuing on again to new highs. The ISEE closed at 114 on Friday, proving that bears continue to short this market. If, by chance, the market has its own plan, we have a line in the sand close by and stand ready to go short if we cross. But, give me SPX 1392/1395, and I'm long for a possible 1420 target!
I insist on saying that this market will not turn until every bearish trader's last dollar has been shorted. After all, look at the daily chart of the SPX. It's clearly still in a nice uptrend as of Friday. What's, also nice to see is that the invisible 1360 during the summer is now the deciding place for the future of this rally.
We might be able to put in some type of high in the next week or so just before getting ready for the November Jobs report, followed by another Fed meeting. After that, Santa Claus and his famous rally might be stopping by for a visit.
Make sure to read Joe's Metals update as I can see that silver has voided a well seen triangle which Joe had warned about being possible.
Soybeans and Corn closed out the week with another high. I think we might now have a complete move and a good trade might be around the corner. My trend charts are about to signal a top in those markets.
The featured stock will be Google. After pointing out that the Fibonacci support that needed to hold at $375, it has vaulted to over $5oo. We are now waiting for it to reach my target nearby as well as signaling a turn in the market.
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