|
Summary for Week Ending 4th December 2004
A declining Oil price breathed some new life into the markets this week, with some action in both directions, but the overall desire was to go forwards. Once a higher low was in and a new high reached, the market decided to stuff around a bit, with some forward momentum, and a new high everyday but none of the gusto we have seen previously. Perhaps we need to wait for the energy to build back up again.
In last weeks message I was counting the days in retracement in comparison to the initial fall. The market was shaping up as quite weak, and it appeared that any little shock would see it screaming back towards the downside. Monday showed the most promise with a good start down, and going towards confirming the original prospect of a downside run. If Tuesday went down to a new low, it can be certain that a large number of stops would have been triggered and the market would have most probably taken a bath. Instead on Tuesday we saw an inside day. Considering the extent of the Monday movement, this was not totally unexpected for the market to take a rest, but it was imperative that Wednesday continue the run down to a new low. As of Monday we had a lower swing high in place and following on from all that we had going it was a good signal to be short as well as providing a tight stop loss to the upside.
Well, Wednesday showed why we have stop loss orders as the market took off like a bandit and screamed to a new high. From an Elliott perspective this created what is known as a running correction, where by the market when making its wave 3 decline fails to breach the terminus of Wave 1, giving us a sloping corrective pattern. In all, this happens rarely, and generally near the expiration of a major move when is in a 'final blow off' type stage. If we look at the speed with which the market has risen in the past month or two we can see that the action is looking a little 'Blowoffish'
With the market taking off to a new high, and then just drifting afterwards, as evidenced on Thursday and Friday, then we need to watch out for the False break, something the S&P likes to do, but with the Nov 17 time date negated, we are again looking towards the upside. This event has also provided an excellent example of why using time in itself, is never definitive. You may get a change in trend, however it is always the market that will decide the significance of the change in trend ( or its lack thereof)
If we are again looking towards the upside then the targets highlighted in the 13th Nov report are back in play( coincidentally this is where we got sidetracked with the nov 17 change of trend )
Note ! An update on last weeks All Ords chart. Dec 9th is 45 days since this current run began, and is also in the range for when the market crosses around 4022. Time to just sit and watch what happens. Its not very strong, but perhaps worth a little look.
|
