|"The market is volatile at the moment," I wrote back then. "With events in Greece placing stress on the market, with the speculation that Italy, Portugal, or Ireland could default, with the possible breakup of the euro, with bears like [US economist] Nouriel Roubini calling for a second recession, and with the Republican party trying to stalemate President Obama's planned economic recovery, does anybody other than traders want to risk their hard-earned money?"|
Somebody must have read my analysis, which concluded that there was a tough market ahead of us, with US politics and the European crisis badly influencing the market, and decided that a bull market, with the QQQs rising above the $59.33 level, is primary. The European crisis is being solved; the Republican party has found that they are losing public opinion. Finally, the major bears out there are beginning to tone down their rhetoric.
|FIGURE 1: THE ELLIOTT WAVE COUNT UPDATED|
|Graphic provided by: AdvancedGET.|
|Figure 1, my chart of the QQQ, suggests that a wave 2 of wave V has been completed, with a double bottom at $50.11, and that the QQQs have now moved into a wave 3 of wave V. A Fibonacci extension of wave 1 suggests that wave 3 should top out at $62.12, a 1.618% move of wave 1. |
Many will argue that the QQQs should break above the high reached on July 25. I have drawn a trendline and suggested a target of $60.50, but with optimism slowly creeping back into the market, and with the best months of every year (November to May) ahead of us, it is possible this target could be easily broken. The relative strength index (RSI) is still positive, and volume does seem to be increasing with a rise in the QQQs.
For now, I am very bullish with the QQQs. They have not yet broken above the $59.33 level, which I suggested in my July 18th article would indicate that they are in a bull Elliott wave count, but the chart is looking more and more positive. This will only change should the QQQs collapse and fall below the $50.11 level.
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