Elliott Wave Leaderboard

Thursday, January 19, 2012

Stock Market Rally Poised to Continue!

But is it Really?

The stock market has broke out of a recent triangle and has since "broken" serious trend line resistance. I use quotes like that around "broken" because I have a suspicion that the price action is just a large bull trap for investors and traders. The wave count you will see on the chart is still the one I have been writing about since this blogs inception. This wave count is a bearish one, and I recommend that all begin to study the Elliott Waves. The greatest teacher, in my opinion, is ElliottWave.com which is Elliott Wave International. This website will give one the ability to FINALLY SEE what Elliott Wave analysis is and how powerful of a tool it can be for their portfolio. Take a read of the article attached with the link and sign up for ALL the FREE resources they have to offer and let their analysis prove how effective it can be!

5 Yr. Dow Jones Industrial Wave Count

  As we can see, the projected, most probable path for the stock market is South. I know there is no kind of analysis that can predict every market move and turning point, but the Elliott Wave Principle gives traders and investors the highest probability move. Per chance the analysis needs to be reassessed, there are always Stop-loss orders trailing closely behind so one does not lose much. 

As I said, the market has broke above the thick trend line to the right of the chart. This is a bullish sign to most, however, it can also be a cloak for the larger move DOWN. Investor optimism seems to be rampant and no market can climb forever especially with DECLINING volume. All of the factors put into perspective shows me that the 3rd wave down is coming, possibly tomorrow.

The reason I say possibly tomorrow is because I use certain ETF's that gauge certain sectors and it looks like a possible bottom is in place for this high volatility ETF. 

FAZ has hit a 423% retracement from a push higher previously. Also, the ETF is hitting trend line resistance to the downside so this is bullish. The down channel FAZ is in is a positive sign in itself because it will break to the upside of the channel (in theory) which will be market bearish. We will see what tomorrow holds for us, and I will update.


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