SHORT TERM: market gains in a volatile session, DOW +215
The market opened higher this morning on overnight buying hitting 1420. But was quickly sold off by the fade the gap up traders, and moved to about unchanged on the day at 1407, just a bit past 10:00. Another rally followed, albeit a choppy one, until 1:30 when the market made new highs for the day at 1428. Then another selloff occurred back down to 1410 by 2:30. But the day wasn’t done. The SPX 1410 pivot held support, and the market rallied into the close making a new high for the day at 1429. At the close the SPX/DOW were +1.60%, and the NDX/NAZ were +1.90%. Bonds gave back most of yesterday’s gains down nearly 1 1/4 points, Crude lost $3.20, Gold dropped $15.20, and the Euro was lower. With the SPX closing at 1428, support again is at 1410 and then 1383, with overhead resistance of 1438 and 1462. Short term momentum was oversold this morning, but is now rising and just past neutral. Tomorrow at 8:00 the FED’s Kohn give a speech in NYC, and the FED’s beige book is released at 2:00. Also, Oct. durable goods and existing homes sales will be released in the morning. Volatility is likely to continue. Best to your evening!
MEDIUM TERM: correction, expecting a SPX 1364 retest
LONG TERM: bullish
the ELLIOTT WAVE lives on 
Hi EB,
Thanks for the comments.
tony
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Hi Tony,Your comment: "This bull market from (October) 2002 has clearly been a five wave advance." Sorry, I disagree. Using strict Elliott guidelines, it is clearly a three…and all subwaves within the structure are three wave patterns. The beginning of the wave was actually at the March 2003 low (where the XMI and some other indices actually bottomed…other indices, like the OEX, bottomed in July 2002 and had two higher lows in October and March 2003…all indices thereby completing an ending diagonal triangle). Anyway, despite the difference in our Elliott wave approach and counts, I enjoy reading your blog. You obviously put a lot of time and effort into it!EB
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Hi Peter,
Checked out that interview with Prechter.
With all due respect, he is a very accomplished EW technician.
I disagree with his opening statement about 1973 being a bear market rally.
1973 was the end of Cycle wave 3 on my charts, and 1974-1982 wave Cycle wave 4.
Secondly, bear market rallies unfold in three waves and don\’t make new highs in the broad market.
This bull market from 2002 has clearly been a five wave advance.
Thirdly, the bear market of 2002 satisfied a Super cycle low when the NAZ dropped 80%.
Lastly, Elliott never mentioned anything about purchasing power in gold or any other commodity to justify a wave count.
Purchasing power of everything has been diminishing for the past 50 years. But the market has outperformed inflation.
Unfortunately, this is the same scenario that he has offered since 1995. Meanwhile the DOW has tripled.
tony
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tony,
if market did put a bottom yesterday at 1406, then would you still considered this wave as major wave 4 completion and this as start of major wave 5? thanks
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Hi Joe … Still possible, but I prefer the NAZ count which aligns with the other indices.
Hi Peter … will check it out.
cheers!
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Hi Matt,
Short term the market did bottom yesterday.
A major wave 4 low has not been satisfied yet though.
tony
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Hi Tony,Is it correct that the Nasdaq 100 (NDX) is still in diagonal wave pattern and not in Major 4? Thanks,Joe
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Hi Tony,
Do you agree with Rob Prechter"s count up to the top around 2001 ?
Mr. Prechter, interviewed on Bloomberg today, shows a chart of his belief that the entire rally from around 2003 is a B wave… notable is that the Cycle? V started in 1970\’s…finished around 2001
You can pause the video below to see his chart better early in interview…later talk gets diluted in discussion that \’commodity purchasing power of Dow\’ peaked in 1999
Once at http://www.bloomberg.com
paste in this address for video
javascript:bringupPlayer(\’vid=vtRampCRE.NI\’)
best regards,
Peter F.
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hi Tony,
is it possible that we could have bottomed aroud 1406 yesterday on s&p. would that be considered a complete major wave 4? thnx
Matt
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