Monday, March 17, 2014

Market Overview & Elliott Wave Structure

Today's market action was very interesting. Although the buy trigger was not triggered, market did rally. We are approaching the Fed's FOMC meeting. Markets are typically very choppy near the FOMC meeting. It is likely that Fed will continues its taper. Over the past three meetings, each taper decision has been accompanied by buying the market.

From an Elliott Wave perspective, market's structure since March 7 looks corrective in nature. Following chart shows a clearly impulsive rise in SP500 since Feb 5 bottom till March 7. 

Above chart shows an impulsive rise in a 5-wave format. After completing the 5-wave rally, market started forming an expanded flat with wave-A & wave-B being 3-wave affairs, and wave C being an ending diagonal (shown below).

An interesting aspect of wave-C's ending diagonal is the overlapping structure of the price movement. Over-lapping structure is corrective in nature and should result in a new rally phase.

In order to confirm uptrend, market would have to break above the down-trending trend line and also break above levels defined in IPM Trade Matrix update. Once the trend is confirmed, stop levels will be decided and will help in protecting losses. 

Please note that Elliott Wave analysis is just a supporting mechanism and is not purely used in IPM Trade Matrix. Elliott Wave analysis in conjunction with IPM Turn Window and Market Barometer analysis highlights high probability trades. IPM Trade Matrix trades will be shared on the blog in the first half of 2014.

Twitter will be updated as things take shape.


  1. So, with the IPM turn window, market barameter, and EW, you are taking the break above the upper declining trend line as your buy - correct? This buy will be until the next IPM window so this is a short term trade before a potential significant top. I'd say you're pretty close unless geopolitical issues goes bonkers and the market rolls over (and not just Russia-Iran is getting into the mix. Did you read about the Kremlin's reporter after Putin's speech say they can turn USA into ash? LOL! No biggy, we could do the same, but it solves nothing) . Be careful out there, Brad

  2. Hi Brad,

    Thanks for the comment. Break above the trend line is coincidental with the prop trigger level generated by IPM Trade Matrix. Russia can be explosive situation but as you mentioned, not now.


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