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Monday, August 03, 2015 11:47:12 AM
For those who follow Elliott Wave analysis:
The SPX may finally be ready to make its move
* August 3, 2015
The market has finally come to a head. We are now at the point where the market will ultimately have to make a decision, and the next move in the upcoming week will be the determining factor.
As I have been saying for weeks now, I do not have a strong edge as to which direction the market is going to take for its next bigger move, and I am looking for a strong clue. Early next week will likely provide that clue, and should provide us with a directional bias for at least the next few weeks, if not few months.
As I have also been noting for weeks, those that want to make directional "bets" on the market should be utilizing individual stocks, as they will likely outperform the market. This past week reinforced just how correct that expectation has been. To this end, our StockWaves analysts once again performed exceptionally.
On the long side of the market, their SunPower SPWR, -0.67% Booz Allen Hamilton BAH, -2.25% and Western Digital earnings analysis outperformed the overall market. Moreover, their Qorvo and Taser International TASR, -5.73% analysis provided some very impressive short side opportunities this past week.
For this week, I am going to lay out the patterns I am watching in the S&P500, and will allow the market to clue us in early next week as to which one is the most likely in play.
First, we have moved up into our next turn date, as you can see on our 60-minute chart linked at the end of this column. Ideally, this would present a market high to me, as long as we remain below the high made on Friday. A decline from this region would either be a wave ii in the green count, which sets up a rally to the 2150-2175SPX region, or a big wave iii down in red taking us to the 2000 region by the middle of August.
The manner in which the decline takes shape will provide us with the difference between the two patterns. Should that decline develop impulsively, then I will be looking for the wave iii toward the 2000 region, with the entire decline ending at the end of August in the 1980SPX region. We need to break 2064SPX to begin that confirmation process. However, a corrective decline would have me looking for a long-side trade toward the higher target region between 2150-2175. But please note that an immediate breakout over Friday's high, with strong follow through over 2125SPX early next week would make me view us has heading directly toward 2175 without much of a pullback.
Should the market set us up in bullish count to 2150-2175, then that will likely complete this larger-degree 3rd wave off the 2009 lows, and will likely be immediately followed by the larger-degree 4th wave taking us back to the 1800 region. Alternatively, it would take a break out over the 2220 region to make me rethink this potential, as such a break out would be telling us we are heading to 2500. But again, while that was my ideal expectation coming into 2015, the market has developed in such a way as to make me view that as a lower-probability potential at this time, and it would need to break out over 2220 to make a move to 2500 a much higher probability.
Should the market drop next week in impulsive fashion to confirm the bearish case, then we will likely be dropping quite strongly back down toward the 2043SPX region in red wave 3 of iii, and as long as we remain below 2072SPX on any bounces thereafter (ideally below 2064), then we are likely heading down to the 1980SPX region to complete the larger degree a-wave of wave 4 by the end of August. From there, I would be looking for a month long corrective rally in the b-wave of wave 4, which would then set up the c-wave down to the low to mid 1800 region to complete wave 4 in the fall.
So, as I have been saying for weeks now, I need the market to finally make a decision between one of these patterns on the table, so that I can set up a trade for the next larger 200-plus-point move in the S&P500. The upcoming week "should" see the market finally chose a direction.
http://www.marketwatch.com/story/the-spx-may-finally-be-ready-to-make-its-move-2015-08-03?link=MW_TD
- George.
Click on "In reply to", for Authors past commentaries.
The SPX may finally be ready to make its move
* August 3, 2015
The market has finally come to a head. We are now at the point where the market will ultimately have to make a decision, and the next move in the upcoming week will be the determining factor.
As I have been saying for weeks now, I do not have a strong edge as to which direction the market is going to take for its next bigger move, and I am looking for a strong clue. Early next week will likely provide that clue, and should provide us with a directional bias for at least the next few weeks, if not few months.
As I have also been noting for weeks, those that want to make directional "bets" on the market should be utilizing individual stocks, as they will likely outperform the market. This past week reinforced just how correct that expectation has been. To this end, our StockWaves analysts once again performed exceptionally.
On the long side of the market, their SunPower SPWR, -0.67% Booz Allen Hamilton BAH, -2.25% and Western Digital earnings analysis outperformed the overall market. Moreover, their Qorvo and Taser International TASR, -5.73% analysis provided some very impressive short side opportunities this past week.
For this week, I am going to lay out the patterns I am watching in the S&P500, and will allow the market to clue us in early next week as to which one is the most likely in play.
First, we have moved up into our next turn date, as you can see on our 60-minute chart linked at the end of this column. Ideally, this would present a market high to me, as long as we remain below the high made on Friday. A decline from this region would either be a wave ii in the green count, which sets up a rally to the 2150-2175SPX region, or a big wave iii down in red taking us to the 2000 region by the middle of August.
The manner in which the decline takes shape will provide us with the difference between the two patterns. Should that decline develop impulsively, then I will be looking for the wave iii toward the 2000 region, with the entire decline ending at the end of August in the 1980SPX region. We need to break 2064SPX to begin that confirmation process. However, a corrective decline would have me looking for a long-side trade toward the higher target region between 2150-2175. But please note that an immediate breakout over Friday's high, with strong follow through over 2125SPX early next week would make me view us has heading directly toward 2175 without much of a pullback.
Should the market set us up in bullish count to 2150-2175, then that will likely complete this larger-degree 3rd wave off the 2009 lows, and will likely be immediately followed by the larger-degree 4th wave taking us back to the 1800 region. Alternatively, it would take a break out over the 2220 region to make me rethink this potential, as such a break out would be telling us we are heading to 2500. But again, while that was my ideal expectation coming into 2015, the market has developed in such a way as to make me view that as a lower-probability potential at this time, and it would need to break out over 2220 to make a move to 2500 a much higher probability.
Should the market drop next week in impulsive fashion to confirm the bearish case, then we will likely be dropping quite strongly back down toward the 2043SPX region in red wave 3 of iii, and as long as we remain below 2072SPX on any bounces thereafter (ideally below 2064), then we are likely heading down to the 1980SPX region to complete the larger degree a-wave of wave 4 by the end of August. From there, I would be looking for a month long corrective rally in the b-wave of wave 4, which would then set up the c-wave down to the low to mid 1800 region to complete wave 4 in the fall.
So, as I have been saying for weeks now, I need the market to finally make a decision between one of these patterns on the table, so that I can set up a trade for the next larger 200-plus-point move in the S&P500. The upcoming week "should" see the market finally chose a direction.
http://www.marketwatch.com/story/the-spx-may-finally-be-ready-to-make-its-move-2015-08-03?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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