Market Update -11/30/09

Dow Jones Industrial Average: +34.92 or 0.34% at 10344.84

S&P 500 Index: +4.14 or 0.38% at 1095.63

NASDAQ Composite Index: +6.16 or 0.29% at 2144.60

NYSE Internals: 1752 Advance. 1285 Decline.

Markets bounce after Financial stocks rally.

Pretty volatile day. Sell off in the morning, then a recovery rally back into the close.

We continue to see the markets bounce around the 1100 area. Very similar action to early June. Markets have wide intra-day ranges, but on a closing basis have gone virtually no where. As I posted in my weekend update, we are at a zone of very heavy resistance. As expected, the markets are going to stall at this long term resistance on the Dow. I still believe we are going to churn sideways here before the markets produce another big move.

The key support levels to watch are 1083 and then 1060 on the SPX. If we break these levels, there is a good chance we continue downward. For the upside, the only key resistance to watch for is 1113. If we break this, we may be headed higher to 1120.+

The H&S pattern I posted about a while ago is still in play, but it may be a bit more complex than before. The target still remains 1060.

US Dollar was down today. Crude Oil was up and Gold was relatively flat. VIX ended up being negative for the day. Financials led to the upside.

A look at the daily charts

The daily charts always tell us where we are short term as well as long term.

Short term, we know the market has been overbought for quite sometime. Negative divergences are visible on all time frames on the RSI and MACD. Yet the market continues to fly higher. In terms of Elliott Wave, we are beginning to look like a complete up wave structure.

The EW Principle states that all waves follow an upward or downward channel, wedge, triangle or pennant. Regardless of the degree, whether they are a primary wave or a small minute wave... they will always take form of some type of channel.

This bear market that started back in October of 2007, has been coming down in a downward sloping channel. Primary Wave 1(oct2007-mar2009) came down in a smaller channel of its own, and Primary Wave 2(mar2009-??) is taking a form of a wedge. A bearish rising wedge. These trendline have seemed to work well in the past, especially on the Dow. Let's see if they continue to work... The key line to watch is the lower trendline of the rising wedge. This line has not yet broken on the Dow. If it does, Primary Wave 2 is most likely over, since a corrective wave usually doesn't have a throw over out of it's trendlines.

Aside from Elliott Wave and trendlines, we are some major fibonacci resistance. We have now retraced over 50% in time and price on the Dow. The SPX is yet to reach it's 50% mark, and the Nasdaq has almost made it to it's 61.8% retracement. But looking at the Dow, it is in a zone of very heavy resistance, and it's not going to be easy to break through. If we fail to break through, it may produce another downtrend.

And here is the full updated count for the SPX. The ABC zigzag from the lows looks complete.

Market Update - 11/27/2009

Dow Jones Industrial Average: -154.55 or 1.48% at 10309.85

S&P 500 Index: -19.13 or 1.72% at 1091.50

NASDAQ Composite Index: -37.61 or 1.73% at 2138.44

NYSE Internals: 430 Advance. 2527 Decline.

Markets drop after Dubai default problems.

Very surprising day. Not many people expected today to be down because of the holidays. The US markets were closed yesterday, but the index futures were open for most of the day and night. Our futures sold off throughout the evening, along with Asia and Europe. The Heng-Seng Index(Hong Kong) lost over 1000 points, nearly 5%. The Japanese Nikkei and Shangai Composite(China) were also down big. Europe was down on Thursday, but closed flat to slightly up today. I believe China lost 10% this week.

A lot of this selling has to do with the defaulting problems in Dubai. It seemed to have a big impact on the futures overnight here in the US. At one point, the E-mini S&P futures were down 41 points, and the Dow-mini YM were down nearly 380. But they soon recovered once the cash markets opened.

At the open today, market breadth was down 2000:1. Yes. 2000:1. We never even had that bearish of an open during the crash last year. My charts don't go back any farther than the past 3 years for market breadth, but this may have been one of the most bearish opens in the history of the stock market. The only other bearish open I can think of is Black Monday and Black Tuesday... Might as well add Black Friday to that list now too. :) We also had the TRIN open at 85.8. There was a lot of short interest in the morning.

But now this bounce off the lows has it's own impulsive look. While the sell off may have been impulsive, it is very tough to count 5 waves down. Looks more like 3 waves down, which is corrective. But the bounce up appears to be 5 waves. Should we continue higher, we have to watch the 1113 area. But if we can break back down below 1083, we may be headed to 1060. If 1113 is broken, 1122 it is.

I try and will post more charts over the weekend.

US Dollar was closed up slightly, despite being up big during the pre-market. Crude sold off, but recovered at the end, as did Gold. VIX was up over 25% itra-day, but quickly faded as the market rallied. Energy and materials led to the downside along with the Financials.

Market Update - 11/25/2009

Dow Jones Industrial Average: +30.69 or 0.29% at 10464.40

S&P 500 Index: +4.98 or 0.45% at 1110.63

NASDAQ Composite Index: +6.87 or 0.32% at 2176.05

NYSE Internals: 2047 Advance. 960 Decline.

Markets remain sideways after mixed economic data.

Lightest trading volume in over a year today. Many of the indices remained sideways for most of the day, in a very narrow trading range. None of my counts have changed, since once again the market has been flat for quite some time now. And with the markets closed tomorrow and a half-day on Friday, don't expect a big move. Volume may come back into the market next week.

We tried to test the 1113 high today by making it to 1111, but we failed to break to a new high. If we do break 1113, look for 1122. We need to break 1097 on the downside if we're going to fall further.

No charts today because nothing new has happened.

US Dollar was crushed today, making another 52-week low. Crude Oil and Gold both rallied as a result of the weak dollar. VIX also made a new 52-week low intra-day, but closed relatively flat. Financials were the weakest sector today.

Have a happy and safe Thanksgiving!!! :-)

Market Update - 11/24/2009

Dow Jones Industrial Average: +-17.24 or 0.16% at 10433.71

S&P 500 Index: -0.59 or 0.05% at 1105.65

NASDAQ Composite Index: -6.83 or 0.31% at 21691.18

NYSE Internals: 1392 Advance. 1633 Decline.

Markets remain flat after downward revised economic data.

Over a week has passed and the SPX has not moved. Could it be consolidation for another move higher? Or are we in a topping formation?

As my bullish counts suggested, I was looking for higher highs somewhere between 1122-1160. But I was expecting the up move to be more impulsive. While we did have a big up day yesterday, the market lost steam after it made highs in the morning, and there were a lot of negative divergences.

After studying the daily charts some more, another bearish count has emerged. The sideways motion for nearly two weeks now looks a lot like the topping formation we had in early-mid June of this year.

The market is not closing at it's highs or lows, and most of the candle sticks are like Doji's. Just like they were in June.

The pattern is also displaying a megaphone reversal pattern. Last time, in early July, the market failed to break it's support line, but still managed to correct 9%. If we can break the support like this time, we may have a deeper correction.

US Dollar was flat. Crude Oil was down and Gold was also flat. VIX was also down and most of the financials stocks led to the downside.

Market Update - 11/23/2009

Dow Jones Industrial Average: +132.79 or 1.29% at 10450.95

S&P 500 Index: +14.86 or 1.36% at 1106.24

NASDAQ Composite Index: +29.97 or 1.40% at 2176.01

NYSE Internals: 2347 Advance. 666 Decline.

Markets rally after better than expected Existing Home Sales.

We broke back above over 1100 today after holding some key support last week. Although the Dow was once again the only index to make a new high, it looks like our bullish counts may be coming into play. But there was no new high for the SPX or Nasdaq. No new low of the US Dollar or the VIX.

The H&S I posted about on Friday is still also in play for our bearish counts. Also since we did not make a new high on 2/3 major indices, the alternate bearish count still remains that we did in fact top at 1113.69 last week. Today's high was 1112.38.

Once again, there are not a lot of charts to post since both of my counts from last week are still in play, and the market virtually hasn't moved since last week. Volume also continues to be very low. Let's see what tomorrow's GPD numbers do. S&P Case-Shiller and Consumer Confidence also comes out. Most of these numbers are final revisions.

US Dollar was down. Crude Oil was flat, Gold was up. VIX was down again. Industrials were the strongest sector.

Market Update - 11/20/09

Dow Jones Industrial Average: -14.28 or 0.14% at 10318.16

S&P 500 Index: -3.52 or 0.32% at 1091.38

NASDAQ Composite Index: -10.78 or 0.50% at 2146.04

NYSE Internals: 1274 Advance. 1716 Decline.

Markets fall on another volatile options expiration.

Nothing much has changed from yesterday. The market virtually didn't move at all today on a closing basis. We did however break yesterday's low on the SPX intra-day. But nevertheless, nothing has changed.

If we continue to pullback, the key levels to watch for are 1081 and 1071. If we break both of those, we may head a little lower. If we make it to 1071-1081 and the bounce from there is impulsive, we may make new highs and one of my bullish counts will be in play.

There seems to be a head and shoulders target appearing on some of the time frames. We have seen this pattern fail the past few times, but regardless, we never know when it may decide to work. :)

The target is around 1060. 1061.59 is also the 61.8% retracement level from the 1029 low to the 1113 high.

I will try my best and post a weekend update with more charts and info.

US Dollar was up. Crude was down and Gold was up. VIX was down. Energy once again led to the downside.

Market Update - 11/19/2009

Dow Jones Industrial Average: -93.87 or 0.90% at 10332.44

S&P 500 Index: -14.90 or 1.34% at 1094.90

NASDAQ Composite Index: -36.32 or 1.66% at 2156.82

NYSE Internals: 576 Advance. 2484 Decline.

Markets slip after disappointing economic data.

After gapping down this morning, most of the day was in a sideways to slightly upward range. In the last 5 minutes however, the market ran up. The market opened up on a bearish note, with market breadth down more than 14:1 at the lows, but that faded as the day progressed. Although we ended the day down, I think this was a victory for the bulls. They managed to hold support around 1090(low was 1088) and got the SPX to close at nearly 1095.

After looking at the daily charts, I see two possible scenarios in play now. Both at this point suggest a new high in the near future. One scenario is slightly bullish, while the other one is looking for a lot more upside.

My first count suggests that this move up from the March lows is a simple ABC correction, a simple 5-3-5 zigzag. This would suggest that we are in Minor wave 5 of Intermediate wave C. A common Fibonacci extension for a wave 5 is .618 the length of 1. If we take a fib extension of Minor wave 1 of C, the .618 extension is around 1120. The 50% fib retracement of the ENTIRE bear market is 1122. So that area serves as pretty heavy resistance. If this count is in play, we should see 1122 soon, probably by next week. After hitting 1122, we should start pulling back.

The second count is extremely bullish. The target is around 1160 on the SPX. This count suggests that the move up from the March lows is not a simple ABC correction, but a complex triple zigzag. Meaning it consists of waves W-X-Y-X-Z. Each of those containing 3 minor waves of ABC. This count suggests that we are in Intermediate wave Z of the final leg up of this uptrend. In a triple zigzag, all the waves are a series of ABC's instead of 1-2-3-4-5. If this count is right, we completed Minor wave A of Intermediate Z at 1113, and we are now in Minor wave B of Z, which should retrace some of A before continuing higher towards 1160 for Minor wave C. If we are in Minor wave B, a good target for a small pullback would be between 1070 and 1080. Then we head higher. A common fib extension for a wave Z is .618 of wave Y. If Z is going to be .618 of Y, the target comes out to roughly 1160.

So all in all, I still believe we will make a new high, somewhere between 1122 and 1160. I will only turn bearish once we break 1029. But of course, as we have seen in the past, all of this could be wrong and we just start going down heavily over the next few days, which would suggest that maybe a new downtrend is here... again.

US Dollar was slightly up. Crude Oil was down, Gold was up. VIX was a lot higher in the day, but closed up around 4.62% Energy and Financials led to the downside.

Market Update - 11/18/2009

Dow Jones Industrial Average: -11.11 or 0.11% at 10426.31

S&P 500 Index: -0.52 or 0.05% at 1109.80

NASDAQ Composite Index: -10.64 or 0.48% at 2193.14

NYSE Internals: 1409 Advance. 1621 Decline.

Markets continue to consolidate after worst than expected Housing Starts.

We continue to go sideways in a very tight narrow range. We did not break yesterday's low, so I will leave that labeled as the wave iv low. I still believe we have a move higher coming, most likely to 1122 on the SPX. There is a low of resistance in the 1118-1122 area. Breaking that will be bullish, and would mean we most likely have a move coming to take us to 1150.

We have moved sideways for about 2 days now. There are a lot of negative divergences on all the time frames, a move higher will only confirm this. The hourly chart also seems to be in a wedge. The upper line of the wedge lines up with 1122 somewhere towards the close tomorrow.

US Dollar was down. Crude Oil and Gold were up. VIX was down. Technology led the downside.

Market Update - 11/17/2009

Dow Jones Industrial Average: +30.46 or 0.29% at 10437.42

S&P 500 Index: +1.02 or 0.09% at 1110.32

NASDAQ Composite Index: +5.93 or 0.27% at 2203.78

NYSE Internals: 1351 Advance. 1656 Decline.

Market ends relatively flat on a sideways consolidation day.

Most of the day was choppy action. Sideways and boring with no volume. Seems like a wave 4 of some degree. Which means we should see a new high soon. As I said yesterday, we would need to move sideways to a little down before seeing new highs. We tested 1100 as support, held it and bounced from there. We may see 1120 soon.

The key level to watch will be 1122. If we sell off once we get there, we may be at a short term top and may pullback a little. If we break right through it the first time, we will be breaking some major resistance. The next target after 1122 is 1158. The the bears can manage to sell off the market tomorrow, we need to break down below 1100, then 1086. If we can break both of these to the downside, we may continue down to test other the next support at 1060.

Tomorrow's CPI numbers could cause a big move in the Dollar. The housing starts also come out tomorrow.

US Dollar bounced today. Crude and Gold were both flat. VIX was down. No clear leader in the market today, as most of the major sectors were mixed.

Market Update - 11/16/2009

Dow Jones Industrial Average: +136.49 or 1.33% at 10406.96

S&P 500 Index: +15.82 or 1.45% at 1109.30

NASDAQ Composite Index: +29.97 or 1.38% at 2197.85

NYSE Internals: 2488 Advance. 578 Decline.

Markets rally as US Dollar collapses.

Made new highs again today, and we stayed around those levels all day. Nearly a 20:1 up day also. Looks like we are now impulsing to the upside again.

I think we will see 1122 soon. That is the 50% retracement mark of this bear market. But first, we need to consolidate a little. Markets are clearly overbought. Perhaps by the end of the week we will tag 1122.

Once we get to 1122, it will become clear what this market wants to do. If we break through it, 1150 it is. If we have trouble breaking it, we may pullback a little before trying again.

Whenever we break today's high of 1113, we will go towards 1122. If we break below 1100, we will likely test the mid-upper 1080's.

US Dollar was down. Crude Oil and Gold rallied. VIX dropped about 2.5% again. Energy was leading to the upside.

Market Update - 11/12/2009

Dow Jones Industrial Average: -93.79 or 0.91% at 10197.47

S&P 500 Index: -11.27 or 1.03% at 1087.24

NASDAQ Composite Index: -17.88 or 0.83% at 2149.02

NYSE Internals: 633 Advance. 2401 Decline.

Sorry for not posting yesterday, I was a little busy.

So 1101 was broken. We made a new high at 1105. Looks like this market just doesn't want to ever stop. Once again, we have been forced to move around counts for Primary Wave [2]. The biggest flaw of Elliot Wave. We never know what wave we're in until it is complete.

Yes, we did sell off from our high of 1105. Nearly 20 points. But haven't we seen this before? Making a high, selling off for a day or two, then go up for the next 6... The bears cannot seem to keep the market down for too long, and the bulls keep taking full advantage of that and keep running it up for the whole week. We stay overbought on different indicators like RSI and MACD. Even the Stochastics are all overbought. Really no Technicals are working, and the Fundamentals are failing too.

So far, this down move from 1105 doesn't look that impulsive. But that may be a good thing. The last previous sell off's that were proved to be wrong looked very impulsive, but in fact they were not the start of a new down trend. Maybe this time we will slowly start to rollover at first, before we start going down fast. Who knows?

There are no clear wave structures on the smaller time frames, but the daily charts display 2 options. Either today was the top(again) or that we are starting a new uptrend towards 1150+ If 1150 is in play, that means the daily time frame will be a triple zigzag, instead of a double zigzag. Meaning it will be waves (W)-(X)-(Y)-(X)-(Z) instead of (W)-(X)-(Y), what we have currently.

Bearish:

Bullish:

This new high was not confirmed with a new low in the VIX, Financials or Nasdaq. The US Dollar did make a new low though. Crude Oil did not make a new high.

We have a long way to go before we confirm a new downtrend. 1028 needs to be broken first.

US Dollar was up. Crude Oil and Gold were down. VIX was up. Financials were leading the way down.

Market Update - 11/10/2009

Dow Jones Industrial Average: +20.03 or 0.20% at 10246.97

S&P 500 Index: -0.07 or 0.01% at 1093.01

NASDAQ Composite Index: -2.98 or 0.14% at 2151.08

NYSE Internals: 1286 Advance. 1755 Decline.

Choppy and volatile day today as the markets closed mixed.

The SPX did not make a new high today. It stayed under 1101.34. Most of the day was choppy and sideways. We can now count 5 waves up from our second (X) wave. Minute wave 2 could have ended today. The sell off at the end wasn't impulsive enough to support that though.

Today could have also been a sideways consolidation for a new move higher later in the week. With the bond markets closed tomorrow, volume should be light. Markets are easily manipulated on light volume. I wouldn't be surprised if they ran it up to new highs tomorrow.

This week also marks the day of the 50% time retracement of this bear market. We have now retraced nearly 50% in price and 50% in time. Whether or not we make a new high for the uptrend tomorrow doesn't really make a difference. If Elliott Wave and Technical Analysis are true, this market should be close to topping real soon, if it hasn't already.

If tomorrow is down, and down big, then we will continue to head down a lot farther. If we make a new high tomorrow, meaning we break 1101, we will probably test 1108.

US Dollar was flat along with Crude Oil and Gold. VIX lost 1.34% No clear leaders to laggers in the market today, as most of the major sectors and indices closed mixed.

Market Update - 11/9/2009

Dow Jones Industrial Average: +203.52 or 0.17% at 10226.94

S&P 500 Index: +23.78 or 2.22% at 1093.08

NASDAQ Composite Index: +41.62 or 1.97% at 2154.06

NYSE Internals: 2549 Advance. 496 Decline.

Market rallies as US Dollar tanks.

Certainly a surprise to the upside. But as I said on Friday, if 1074 was to break, we would likely test 1090. We closed at 1093 today.

Although this rally looks strong, none of the wave counts for the major indexes have been broken, except the Dow. The Dow made a new high today, but that was not confirmed with the other indexes. There was no new high for the SPX, Nasdaq, Financials, Dow Transports, Russell 2000, Real Estate Index, Crude Oil and so on. Also there was also no new low for the VIX.

Wave 2 can retrace upto 100% Which would be 1101 on the SPX. Basically tomorrow needs to be a down day. We have virtually no room left to the upside. If we do open up higher, 1101 CANNOT be broken. If it does, we have to delete all the counts and start from scratch. The one flaw of Elliott Wave... Aside from Elliott Wave, we are also extremely overbought in most of the time frames.

Wave 2 appears to be taking a form of a triple zigzag. This is a complicated corrective pattern. It unfolds in waves W-X-Y-X-Z. The W Y Z waves being the zigzag up, the X waves being the triangles or wedges separating the W Y Z waves. Usually all the waves consist of an ABC instead of 1-2-3-4-5.

Going back and looking at the daily charts, all the previous Minute wave [ii]'s have retraced deep into wave [i]. This deep retracement is not uncommon at a start of a new downtrend.

US Dollar was down. Crude Oil and Gold were up. VIX was down. Financials led the upside.

Market Update - 11/6/2009

Dow Jones Industrial Average: +17.46 or 0.17% at 10023.42

S&P 500 Index: +2.67 or 0.25% at 1069.30

NASDAQ Composite Index: +7.12 or 0.34% at 2112.44

NYSE Internals: 1538 Advance. 1446 Decline.

Unemployment reaches 10.2% versus the 9.8% estimate.

Very strange day today. With the Unemployment numbers coming in a lot worse than expected, most of us thought we were going to sell off today. Futures dropped immediately after the numbers, promising a very hard sell off. But that didn't happen. In fact, we made new highs for wave 2.

We stopped at 1071, but we didn't sell off after that. This means that wave 2 is probably still not over. The next likely target is 1074. If we break above 1074, chances are we get a run towards 1090. We will probably hit 1074 on Monday morning, then we could sell off after that. The key thing to watch for is the sell off. We need to sell off as soon as we hit the target. We should not hang around that number for too long. 1073.86 is the 61.8% retracement. The 1074-1075 area is also the low for wave (i) of [i].

US Dollar was flat. Crude Oil was down, Gold was up. Tech and Industrials were leading the market today. Financials were the weakest along with Energy. VIX was down.

I will try and post a weekend update with more charts and info.

Market Update - 11/5/2009

Dow Jones Industrial Average: +203.82 or 2.08% at 10005.96

S&P 500 Index: +20.13 or 1.92% at 1066.63

NASDAQ Composite Index: +49.80 or 2.42% at 2105.32

NYSE Internals: 2501 Advance. 541 Decline.

Market rallies in expectation of good Unemployment numbers tomorrow.

The upside today was some what a surprise, but not completely. As I said yesterday, "This could very much be start of wave (iii) of 1 down. However, I am hesitant to call it. The past couple of times we have sold off in the last hour, we have had a bounce the next day."

We did bounce today, but we did not violate any wave counts. It didn't impulse up either, about a 5:1 up day. It seems to be that we are still in wave 2. We hit the 50% retracement of the move down and stayed there for most of the day. It is also common for wave 2's to retrace 50 or 61.8% So we are still in the range I was looking for. If we do manage to get over 1065, 1074 will be the next target. It all really depends on tomorrow's Unemployment numbers.

We are sitting at very heavy resistance. It should be hard to break to the upside, but good numbers tomorrow could certainly do it. If we sell off because of the numbers tomorrow, I have a feeling the sell off may be huge. We rallied 200+ Dow points today expecting good numbers, if we don't get those, the market may take it all back.

It should be interesting to see what the market does tomorrow. If we sell off, we know that this is the start of another downtrend. If we don't sell off, we have to watch for 1067 and 1074 on the SPX.

US Dollar was flat. Crude Oil was down and Gold was up. VIX was down over 8% today. Financials and Tech led to the upside.

Market Update - 11/4/2009

Dow Jones Industrial Average: +30.23 or 0.31% at 9802.14

S&P 500 Index: +1.09 or 0.10% at 1046.50

NASDAQ Composite Index: -1.80 or 0.09% at 2055.52

NYSE Internals: 1629 Advance. 1401 Decline.

Market reverses after Fed announcement to keep rates unchanged.

We hit 1061 today. My range for wave 2 was 1050-1060. The sell off in the last 30 minutes or so was looking impulsive. Market internals started to go down pretty hard during the sell off. Volume also picked up to the downside. This could very much be start of wave (iii) of 1 down. However, I am hesitant to call it. The past couple of times we have sold off in the last hour, we have had a bounce the next day.

I am going to label my chart for wave 2 ending today. If this is the start of wave 3 down, we should sell off right from the open tomorrow, and any bounce should not break 1061. If we break 1061, this is still wave 2. This sell off at the end could have also been wave [1] of i of (iii). Which means if we bounce tomorrow at the open, and remain under 1061, I will label that as wave [2] of i of (iii). If that is the case, we should sell off tomorrow after a little bounce in the morning, starting wave [3].

US Dollar was down today. Crude Oil and Gold were up as a result. Gold almost made a new all time high at 1100. VIX was down nearly 4% Financials led the downside, while Healthcare led to the upside. The market leaders are starting to fade, this should bring the rest of the sectors down too.

Market Update - 11/3/2009

Dow Jones Industrial Average: -17.53 or 0.18% at 9771.91

S&P 500 Index: +2.53 or 0.24% at 1045.41

NASDAQ Composite Index: +8.12 or 0.40% at 2057.32

NYSE Internals: 1850 Advance. 1181 Decline.

Very choppy day today. Looks corrective.

Like I stated yesterday, the waves from the low need to look choppy in order for us to maintain the bearish count. So far the waves are very choppy. Choppier than I thought they would be. The A/D ratio is also relatively flat.

I had my chart labeled for us to start wave [3] of a of [ii], which should have taken us to 1050. But instead, we got a mostly sideways day instead. Looks like a diagonal corrective pattern.

Now the key question is, does this diagonal pattern complete ALL of wave 2, or just the first leg of wave 2. If we go down tomorrow in more sideways choppy action, good chances are that we continue higher later in the week. If we impulse down tomorrow, wave 2 has probably ended.

The primary count does call for a small little pullback tomorrow, before continuing higher towards 1050+ It will be interesting to see how the market reacts to the Fed Minutes tomorrow. That could be an event that could trigger a big up or down move.

Very strange day today. US Dollar, Crude Oil, Gold and SPX were all up. VIX was down over 3% again. Energy and Industrials led to the upside today.

Market Update - 11/2/2009

Dow Jones Industrial Average: +76.71 or 0.79% at 9787.44

S&P 500 Index: +6.69 or 0.65% at 1042.88

NASDAQ Composite Index: +4.09 or 0.20% at 2049.20

NYSE Internals: 1629 Advance. 1417 Decline.

Minute wave 1 completed at 1029.38 today. The target was between 1020-1030. We hit the up side of that range and bounced up.

We should now we starting a Minute wave 2 bounce up. The target for this is somewhere around 1055-1065 on the SPX. That zone is the 38.2% - 50% fib retracement of the move down so far. Wave 2 is expected to be an ABC corrective move.

We should finish wave 2 by the end of the week, before starting another downtrend with Minute wave 3. The key will be watching the market internals such as Advance/Decline for the bounce up. We have to make sure they are not impulsing up. The wave structures also have to look choppy for it to be a corrective move. So far so good...

US Dollar was flat. Crude Oil and Gold were both up. VIX was down nearly 3% Industrials led to the upside.