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Monday, November 24, 2014 2:34:30 PM
For those who follow Elliott Wave analysis:
* November 24, 2014
Look for stocks to be significantly higher in 2015
This market continues to do the unexpected, stretching higher and higher despite overbought conditions, and further weakening signs into each higher high. The market continues to push the resistance of multiple indicators. Yet each time it strikes the next resistance region, it falls back, but does not break down ... yet.
Do you realize that the market has not even had a larger-degree .236 retracement since breaking out over 1906 on the Emini S&P 500 futures ESZ4, +0.24% ?
Until this market breaks even the most minimal of upper support, it is beginning to indicate that seasonality concerns may push this market to the 2150 region by the end of the year. However, as we discussed last week, such a move would likely set us up for a 300-point pullback into early 2015, which still will set us up for another 500-plus-point rally into the end of 2015 and potentially into 2016. Ultimately, this bull market still has further highs to be seen, and longer to run before a true bear-market scenario takes hold. It is not likely that this bear market will be seen until at least 2016.
For now, the bigger question with which we are attempting to grapple is whether we are in a pattern setup which kicks off a 300-plus-point correction early in 2015, or if we can set up to continue this rally off the October lows into the end of the first quarter of 2015 before the 300-plus-point pullback takes hold.
This past week, we have witnessed some truly amazing market "lubrication" provided by the ECB and China. How did the market respond? Well, it responded in typical fashion. It burst immediately higher on the emotional reaction to the news, only to reverse such a move later that day.
From an Elliott Wave perspective, the market is only moving up in waves of 3, which is not typical of impulsive structures. It is more indicative of an ending diagonal. Such diagonals are often terminal, and result in a strong reversal. From this perspective, we often see ending diagonals spike beyond the top of its trend channel, which occurred in this reaction to the recent news on Friday, only to be immediately reversed. So, from an initial-reaction standpoint, there are indications that a top could have been struck on Friday.
Moreover, for those who believe in cycles, we are now within a Bradley Model turn timeframe. For those who do not believe in such perspectives, please review what the market did on, or close to Feb. 5, April 1, July 17, Oct. 7 and Oct. 16 so far this year. Each has been a Bradley Model turn timeframe and represented a turning point in the market of at least 50 points. Furthermore, each has represented the conclusion of an Elliott Wave degree of some sort which called for a move of at least 50 points each time. The end of this past week represents the next Bradley Model turn date.
So, while the market has now stretched further than my initial target top for a wave 1 off the October low we expected in the 1814ES region, I would still prefer to see a strong pullback over the next few weeks to set up a rally into the end of the first quarter of 2015, taking us over 2300 in the S&P 500. We need to see the 2025ES level broken as support to even begin this process, with follow through below 1990ES to confirm that wave 2 setup.
However, if the market simply pulls back and meanders in a corrective fashion over the 1990ES region over the next several weeks, I believe seasonality will push us up toward the 2150 region, which will likely represent the top of the alternative wave (v) of 3, as seen on the weekly chart. This would likely set up a 300-point decline into early 2015, and have us at least revisit the 1814ES region at which we recently bottomed. However, once that correction completes in early 2015, I will be looking for another 500-plus-point rally taking us into at least the fall of 2015.
One way or another, the market will be higher over the next few months, to be followed by a 300-plus-point correction, which will then likely be followed by another 500-plus-point rally. Therefore, there are no indications that this bull market will not be seeing much higher levels in 2015, no matter which way the market wants to resolve the current region within which we are now struggling.
http://www.marketwatch.com/story/look-for-stocks-to-be-significantly-higher-in-2015-2014-11-24?link=MW_TD
George.
Click on "In reply to", for Authors past commentaries.
* November 24, 2014
Look for stocks to be significantly higher in 2015
This market continues to do the unexpected, stretching higher and higher despite overbought conditions, and further weakening signs into each higher high. The market continues to push the resistance of multiple indicators. Yet each time it strikes the next resistance region, it falls back, but does not break down ... yet.
Do you realize that the market has not even had a larger-degree .236 retracement since breaking out over 1906 on the Emini S&P 500 futures ESZ4, +0.24% ?
Until this market breaks even the most minimal of upper support, it is beginning to indicate that seasonality concerns may push this market to the 2150 region by the end of the year. However, as we discussed last week, such a move would likely set us up for a 300-point pullback into early 2015, which still will set us up for another 500-plus-point rally into the end of 2015 and potentially into 2016. Ultimately, this bull market still has further highs to be seen, and longer to run before a true bear-market scenario takes hold. It is not likely that this bear market will be seen until at least 2016.
For now, the bigger question with which we are attempting to grapple is whether we are in a pattern setup which kicks off a 300-plus-point correction early in 2015, or if we can set up to continue this rally off the October lows into the end of the first quarter of 2015 before the 300-plus-point pullback takes hold.
This past week, we have witnessed some truly amazing market "lubrication" provided by the ECB and China. How did the market respond? Well, it responded in typical fashion. It burst immediately higher on the emotional reaction to the news, only to reverse such a move later that day.
From an Elliott Wave perspective, the market is only moving up in waves of 3, which is not typical of impulsive structures. It is more indicative of an ending diagonal. Such diagonals are often terminal, and result in a strong reversal. From this perspective, we often see ending diagonals spike beyond the top of its trend channel, which occurred in this reaction to the recent news on Friday, only to be immediately reversed. So, from an initial-reaction standpoint, there are indications that a top could have been struck on Friday.
Moreover, for those who believe in cycles, we are now within a Bradley Model turn timeframe. For those who do not believe in such perspectives, please review what the market did on, or close to Feb. 5, April 1, July 17, Oct. 7 and Oct. 16 so far this year. Each has been a Bradley Model turn timeframe and represented a turning point in the market of at least 50 points. Furthermore, each has represented the conclusion of an Elliott Wave degree of some sort which called for a move of at least 50 points each time. The end of this past week represents the next Bradley Model turn date.
So, while the market has now stretched further than my initial target top for a wave 1 off the October low we expected in the 1814ES region, I would still prefer to see a strong pullback over the next few weeks to set up a rally into the end of the first quarter of 2015, taking us over 2300 in the S&P 500. We need to see the 2025ES level broken as support to even begin this process, with follow through below 1990ES to confirm that wave 2 setup.
However, if the market simply pulls back and meanders in a corrective fashion over the 1990ES region over the next several weeks, I believe seasonality will push us up toward the 2150 region, which will likely represent the top of the alternative wave (v) of 3, as seen on the weekly chart. This would likely set up a 300-point decline into early 2015, and have us at least revisit the 1814ES region at which we recently bottomed. However, once that correction completes in early 2015, I will be looking for another 500-plus-point rally taking us into at least the fall of 2015.
One way or another, the market will be higher over the next few months, to be followed by a 300-plus-point correction, which will then likely be followed by another 500-plus-point rally. Therefore, there are no indications that this bull market will not be seeing much higher levels in 2015, no matter which way the market wants to resolve the current region within which we are now struggling.
http://www.marketwatch.com/story/look-for-stocks-to-be-significantly-higher-in-2015-2014-11-24?link=MW_TD
George.
Click on "In reply to", for Authors past commentaries.
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
gtsourdinis
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