December Commentary

The last month of the year is always a good time to estimate where the market is going. Let's start with the Dow Jones Industrial Index, an index that has been trading in a range of 1300 points for the last 2 years. Everytime it comes to the 11000 it turns down. If it penetrates that resistance it should move to the shown target levels. Could it move higher? There another Fibonacci level at 12400. The consolidation is usually when the market gathers its strenght for the next trend. If the trend resumes, then we should expect another consolidation before the wave (4) deploys.

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If we look at NASDAQ we have a slightly different picture. We are in fifth wave extension and that market has been trending strong for the last few months. There are many targets possible and since it has already penetrated the last resistance line, we expect the price to move to the 2000 level quickly. However we should be careful as an extension forecast is not as accurate.

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AlphOmega Elliott Waves wishes to all its customers and suppliers a Happy Holiday Season and the best for the Year 2006!