PMKing Trading LLC
Market Perspective Archive May 13th 2006
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φ A Medium-Term and Long-Term US Market Perspective May 13th 2006

Overview

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.

Legend

Green Line
Trend
(5 waves)
Red Line
Correction
(3 waves)
Green or Red Circle
Possible Wave
Terminus
Green Diamond
Wave Terminus
Red Diamond
Wave Terminus
Green or Red Arrow
Probable Market
Direction

 
Monthly Commentary May 13th 2006
 
The close below 1295 (at 1291 on 5/12/6) indicates that Wave 5 of the uptrend that started at 1179 around the end of October 2005 terminated on 5/5/6 at 1325.  This confirmed that we were right about the previous monthly long position (mentioned in our 5/5/6 Market Perspective) being a poor reward:risk trade.  For an aggressive early position we would be short at the open on 5/15/6 with an initial trailing stop at 1312.  A more conservative approach would be to wait for a close below 1285 as confirmation of the start of Wave A of the correction before entering a position.
 
Interim Update May 17th 2006
 
As anticipated on May 13th 2006, the S&P 500 moved down significantly to confirm the start of Wave A of a correction.  The close of 1270 today would be an excellent place to add to the short position we established on 5/15/6, or to initiate one if you didn't enter then but waited for the given confirmation (of a close below 1285).  The current trailing stop for this new position would be at 1297.
 

Yearly Commentary May 13th 2006

On the yearly chart we are still long on 5/8/6 with a price target of 1388 and an initial trailing stop at 1233.

This market perspective is for your information only.  Please get professional advice before risking money on trading or investing using this information.  Note that the S&P 500 is a theoretical index that cannot be directly traded.
 
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