Monday, February 9, 2015

SPX, INDU, BKX, NDX: Upside Turn Targets Captured; Market Turns

Friday saw the upside targets from January 30 captured across the board, as SPX broke above 2064, and INDU broke above 17922.  While there are times that Elliott Wave dictates a "watch and wait" approach, there are often multiple occasions during each year in which the market tips its hand just enough for us to see what's coming next.  We can see on the first chart below, which was originally published on January 30, that the market has followed the path exactly as projected (to red C/blue (2)). 

Thus, the preferred count netted more than 120 points of closed profit in only the past 6 trading days.  And, for those who reversed short at the highs, the preferred count has an additional 9 points of open profit as of Friday's close.  Of course, it remains to be seen if the wave will continue to follow this exact path, or if the market will open up new potentials -- but either way, the last two months have been very solid for the preferred near-term wave counts.

The funny thing is, there's currently no material difference between the January 30 projection chart (below) and the market's actual performance, right down to both the turns, and the dates where the turns are shown.  I almost feel like I don't even need to update it with the actual price action (!).  This actually makes me a little nervous, because I figure that, eventually, the market is due to throw a curve-ball into the mix.

(Generally speaking, I don't do time projections; so please don't expect the dates to always line up this well.)

Friday's update suggested that the market still needed a final thrust up in wave (5) of C, but that the rally had a good chance of coming to an end during that same session.  So far, everything has played out as anticipated, and Friday's decline appears to be impulsive, suggesting there is more downside still in store:

No change to INDU's chart since January 30, and, as noted, the 17922+ upside target was captured:

Next is INDU's near-term chart below:  (continued, next page)

On the SPX chart below, keep an eye on the market's reaction to the upper blue trend line, if we get there:

Finally, I wanted to examine a couple other markets, to see how they compared.  BKX may help offer some additional clues heading forward:

NDX seems to have completed an ending diagonal:

In conclusion, everything has gone according to expectation so far.  At this point, I would caution readers to not simply assume that this means everything will continue to go exactly as planned.  There are always numerous options, and the market continually reserves the right to do something unexpected. 

The main thing making me slightly cautious (as a bear) here is that the final rally wave into Friday's high isn't entirely clean, so I have at least some modest concerns that the current decline could be wave c of an expanded flat.  Nevertheless, given how well the market has followed the projections, it's probably up to the market to "prove" that it's something other than what it seems -- so we'll worry more about the bull options only if SPX can sustain trade north of 2073 from here.  Trade safe.

1 comment:

  1. This is my third comment so I would like to request membership in the Deep Wave forum. My email and user id are set up in Disqus. I registered for the forum today.

    My comment is a follow up to something you said a few days ago how the market tries to confuse the majority. It seems to me that the most confusing outcome is a new ATH in the Dow unconfirmed by other indices. This could be a repeat of the Nov-Dec top that saw a new high, a two-day drop, then a 4 day distribution rally top.