Outlook for Selected Markets. DJIA - S&P 500 December 04/04
by Bill Voeten
December 04/04
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.
For the Month of December 2004, Gannalyst
Pro 4.0 is available for only $349.00
AUD
Charts
S&P 500 See Chart
Australian All Ords (Weekly) See Chart
Bill Voeten
gannalyst.com