Thursday Update

The Energy Sector remains on a long /buy Alert needing a close above Wednesday’s XLE high of 55.07 to confirm that trade. The precious metals and miners continue on long/buy Signals along with the equity indexes. The Portfolio took profits on all equities except the Biotech sector at the open this morning- per the stop noted yesterday, and now sits predominantly in cash. I placed a stop on the biotech index should it trade down tomorrow. However, there is a chance we see new equity highs tomorrow in which case the Portfolio will re-enter long/bullish equity ETFs – see below.

The wave count options continue on tract for now, but we could have some clarity on which scenario is going to win out as early as tomorrow. Per the blue favorite count, intermediate wave (4) is tracing out as a flat, with a three wave move down in [a] this morning and now the bounce in [b]. Once complete, if not already complete, we should see an impulsive move down in [c] to the level of minor wave 4 low (see yellow rectangle). The very bullish alternative count is that the five waves up from the minor wave 4 low was only minute wave [i] of 5 of (3). And the abc down today was possibly all of [ii] (although it too can trace out a flat from here). It is possible that if the green count is correct, then the SPX shoots up to a new all time high tomorrow as minute wave [iii] impulses upward. The Portfolio will re-enter UPRO, UDOW, QLD, TNA, FAS and SOXL should the SPX make a new high tomorrow.

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
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