DOW Elliot Wave Analysis and Forecast short term, PSE update 4-15-2012

U.S. Markets started to correct from its peak, some indicators and Elliot Wave analysis did very well on estimating the short term peak last 13297.

In our discussion today, I have setup 2 type of scenario that might happen in the short/medium term using Elliot Wave theory. Both are bullish type scenario. The charts will be on negative or downtrend biased when sell offs are greater the rallies for e medium term time frame, or in Technical terms, a possible change in direction is when DOW gets below 12200-12500 and breaks below strong. As of this moment, let us not think of it yet, for me,some reasons to be back to bearish : 1. when primary Europe countries announces Q1 2012 GDP in negative territory,making them "in Recession state". Recession - 2 consecutive quarters with Negative GDP. 2. Spain,Hungary, other Emerging European Nation etc declares lack of funds or near Recession status same as Greece. (I will say 30% chance to be bearish,since we are uncertain if Europe really grew last Q1 2012) (70-30 battle for Bulls-Bears).

Let us get back to the current trend - somewhat Bullish.

1st Scenario (80% chance to happen) - Correction is net yet over, Estimating the last Intermediate Wave 2 pullback/correction, it to around 6-8% and 1month timeframe to bottom out, and it had an a-b-c like corrective pattern. If we are going to mimic the wave patterns from the last correction, we just finished wave a down, and wave b small rally, all accounted for 2 weeks, if we say 100% that same thing will happen, we expect a 12500 bottom for a-b-c corrective pattern for Intermediate Wave 4 correction of Primary Wave III uptrend.



2nd scenario - super bullish (20% to happen). Correction is over at only 3.5%. Resume of rally will take place, and Rally like there is no problem/debt issue in Europe and other emerging markets.

In terms of Elliot Wave, this may not be the forecasted pattern due to lack of wave count to fully say that correction is over (a-b-c wave correction pattern). But let us open this possibility of this uncertain market.


For PSE. I have not much things to say on this toppish-look market. Asia had a net of almost 4% correction for the past week, and PSE did only a 1% pullback, and 1% rally, making it back to near its all time high.

I was able to trade HK and AU last Wed (4-13-2012) and went out last (4-15-2012) for a 3% gain. Quite interesting for a 2 day-trade in this volatile market.

Negative divergence of RSI and MACD is still showing weakness, and possible shift in momentum soon. So no BUY recommendations yet. Looking for this market to correct to around 4700-4850 for a healthier long term projection.