November Commentary

This month let's have a look at the S&P. The S&P like the other indices, continue to be bullish. The count is more clearly defined from an Elliott's perspective. This fifth wave is hovering at a Fibonacci projection level indicating a possible termination of the wave. One should be cautious from this point on and keep very tight stops. Is it terminated for sure? This is a Market call not an analyst call. One thing for sure is that the bullish move has been quite powerful and it may need pause for a moment. The Demand Index is very close to 0, a sign that the momentum has dissipated. Remember that this commentary is not a recommendation to buy or sell, it is only meant as a training to technical analysis using an Elliottist approach.

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The STORSI itself is positive but it has peaked at a level close to that of the wave 3, fractions below. There are two possibilities, the first is that the wave 5 is indeed completed and the STORSI will cross back the 0 line. The second possibility is that since the peak was so high (nearly that of the wave 3) there could be an extension of the wave 5. I cannot rule out entirely that option even though wave 3 was clean and strong enough, wave 5 did well but there is still a Fibonacci projection level remaining before an extension. This is a case for close monitoring during the next few weeks.

If you would like to react to this view, please send me your own comments. The discussion is merely technical and it should be back by arguments of that nature.