φ A Medium-Term and Long-Term US Market Perspective
May 5th 2006
This market perspective is based on the Elliott Wave Principle and represents
a best estimate of the most probable future market direction. For more information regarding Elliott Wave
Principle please see our Elliott Wave International site review here.
Green or Red Circle
Green or Red Arrow
Monthly Commentary May 5th 2006
The close above 1315 (at 1325 on 5/5/6)
invalidated our working assumption that Wave 5 of the uptrend that started at 1179 around the end of October
2005 terminated on 4/5/6 at 1311 so we were stopped out of our short position.
Since our estimate for the Wave 5 terminus is currently 1329 a long trade right now would be a poor reward:risk
(since our stop would be at 1285), therefore we are not taking a position on the short-term direction.
A close below 1285 would indicate an excellent place to go short.
Yearly Commentary May 5th 2006
On the yearly chart our assumption that the estimated terminus of Wave
5 of the uptrend on the Monthly chart is also the terminus of the Wave 5 uptrend on the yearly chart is now invalidated due
to a close on the monthly chart above 1315 (on 5/5/6). We are long on 5/8/6
with a price target of 1388 and an initial trailing stop at 1233.