Heads up

Just a heads up, I am tracking this count right now and taking on some S&P 500 Bear Put spreads again.

I will update you more after the close.

Market update

Yesterday was a sleeper!

We ended up in what I think is a triangle pattern in the S&P 500 and a larger wave-2 correction in the Eurostoxx. I manage to get in some day trades, 2 winners and one looser. I also took home some profits on the extra S&P 500 put spread that I established on Tuesday.

We have a good chance of the triangle continuing today and then I think the market will continue to break down.

The S&P 500 chart below shows the triangle pattern in development on the 30-minute chart.

As for Eurostoxx 50, I think that the wave-2 bounce should end very shortly and the market resuming the downtrend.

Have a great Easter holiday!

Great day in the market if you are on the right side

What I love about the Elliott method is that it helps you pinpoint stages in the market where there are great risk/reward opportunities with good odds.

At 6:22 pm (Central European Time) today I posted a market update on the blog saying that we had a point in the market where the odds were great that the bounce would end. As it turned out this was the exact high of the day! At 7:52 pm (Central European Time) I posted on Twitter that the trade was working for us. The market then continued to fall and at the end, it went into a wave 2 bounce of small degree.

When the market went through the wave A high at 2639 it confirmed this wave count and I increased my short swing trade positions with a new bear put spread in the S&P 500 buying the 2620 put for April 6th and selling the 2570 put for the same date. That spread gained 70% in value into the close.

I am looking for the US equities to continue down tomorrow and if it breaks down through the last low at 2585 I will take some profits since that is the minimum requirement for completing the wave-v shown below.

As for my day trading, I had a good day too, I took a long from the wave (4) correction buying futures at 2660 and exiting at 2675. Then went short the futures from the small wave (2) bounce at 2666.75 and exited at 2655.

It is not every day that I end up with as good a record as today, that’s for sure!

As for Europe with the Eurostoxx 50, it should follow the US down tomorrow and show a lot of weakness in the wave-3 down shown below.

All in all, today was a really good day for all trading timeframes where I participate and tomorrow should see more downside all over the world.

Stay on the right side of the market!

Market update

The very short-term waves show good odds of completing. Stay tuned!

Market update

What a bounce!

Good day from a day trading perspective but way worse on the position trading side.

Looking at the Dow the line in the sand for this count is 24 454, it that level is taken out on this bounce I will have to re-evaluate the best count. The alternative is shown below.

Volume was ok today but it was lower than on Friday so it does not confirm the rise as coming from new buying but rather short covering. My best guess is that the bounce will end tomorrow and the decline to resume. Whatever happens, we will see tomorrow!

The line in the sand for the S&P 500 is 2695, if that level is breached the most bearish wave count is challenged.

Good luck in the morning!

Market update

My best guess is that the US stock markets are in a wave iv correction as shown by the S&P 500 chart below.

I have no idea when the correction will stop but I am betting that we get another leg down in wave v starting at the end of today or sometime tomorrow.

Just a rotational day so far! Don’t get chopped up out there.

Market update

Summary

Equity markets

Market Next few days Next few weeks Next few years
US Equities Down Down Down to sideways
European Equities Down Down Down to sideways
Asian Equities Down Down Up to sideways
Swedish Equities Down Down Down to sideways

Interest rates

Market Next few days Next few weeks Next few years
US rates Up Up Up
European rates Up Up Up

Details

Equity markets

Markets are dropping heavily! I have several Elliott counts that I am tracking but my best guess right now is the one below for the S&P 500.


Friday closed at the lows and I am afraid that Monday could see a continued big fall from the start. Look at the long term chart below, we have corrected NOTHING of the last bull market so we have quite a big downside if this one gets going.

From a trading perspective, I am looking for the S&P 500 to test 2532 in order to give me information with regards to if prices are accepted below that level or if a bounce will start from there and head up into a wave (ii) correction. A lot of alternative wave counts will be negated if 2532 is crossed and this will make my life easier for future trades! I will cover some of my short positions around 2532 and wait for more information.

The Swedish OMX 30 Index is not very easy to analyze but my best guess is the count below.

This means a sideways / down market for a few years still in the making.

For traders, this is a great time, for longer-term investors it sucks and you need to depend on some other form of income for the next few years.

Good luck on Monday!

Market update

I finally managed to get a great day on the short side of the equity market and it continues to fall. Since the last update I have ramped up my trading and the markets are conforming to the Elliott scenarios with the best odds.

The great thing about the Elliott method is that I don’t have to get each wave count exactly right but I do get exact levels where a wave count is wrong and thus it is very easy to close positions that are not working out.

As the market continues to offer more and more information I can update my alternatives and choose the ones with the best odds. Remember that trading is about going with the best odds and capture larger profits than your losses. When I created the best returns I only nailed about 25% of my trades.

The European equity markets have just motored through the bottoms that were established during February and at the beginning of March. This means that there are no obvious support levels to lean against. As I write in the get started guide I day trade the Eurostoxx 50 futures in Europe and the S&P 500 futures in the US. In these markets, I have received numerous setups on the short side during the past few days.

In my position trading, I have had long put spreads in the S&P 500 for a few days and more aggressive option strategies for the short side in a few stocks.

The chart below shows the best wave count for the Dow Jones Industrials index as it currently stands.

There is a more positive wave count alternative as the chart below shows but nonetheless, both counts have enabled me to stay on the short side during these great days!

Don’t miss the old documentary of the legendary trader Paul Tudor Jones!