Extension or Something New?

Sometimes an extension in Elliott Wave is just that, an extension beyond an already complete pattern. You can sometimes get multiple extensions, and a smaller degree extension can end up looking as large as a previous ending wave. Sometimes the way something extends opens up the door to reevaluating the prior subwave count.

The last few weeks have seen a lot of further extension in the broad market. It has come mostly on declining breadth led largely by the same Mag 7+ names that are now even more over represented. It's a slightly different mix of 7, but 7 names account for >30% of SPY and >45% of QQQ! There is a feed-back loop going on because of this overweighting, and while we can adjust counts and allow for higher, should support hold I do not want to be scrambling for a chair when the music stops.

Stock Waves is always looking for the best opportunities with strong clean Elliott Wave patterns and favorable Risk:Reward setups. Over the past ~60days (and even before) we have continued to post a MIX of both short and long Wave Setups, pointing out charts that showed clearer starts to weakness and others that allowed for nice moves higher. Of the new Wave Setups since May, most have been longs. We have cautioned about the precarious nature of this juncture in the market in terms of overall #RiskSkew, but until clear support in the broad market breaks and starts to invalidate the potentials on the individual names, we are still going to look for those opportunities.

We have not been shy about our bullishness in the Energy Sector and we still see that as a strong potential to benefit from #Rotation. Certainly a good share of the recent Wave Setups have been from this sector, but a good number of other ones have been smaller-cap names that have done VERY well recently.

Our Wave Setups page provides commentary on the expected EW path of our highlighted stocks, and clearly lays out support, resistance, target & invalidation levels. When a setup reaches a resistance level we post an official update, often raising (or lowering for shorts) the support & invalidation and providing a new resistance. Sometimes when a target is reached, the pattern still allows for higher and we can assign a new secondary target. Of course, we often post regular charts on many of these names in between. I love posting the updates. I especially love the days when I get to post several of them at once. And what has been REALLY cool these past few weeks is there have been times when BOTH shorts and longs have been hitting their respective pattern resistance levels and been due for updates.

This is not a "Buy LIST." The ideal entries for many of these was when they were posted as Wave Setups, and many have just recently reached resistance levels allowing for consolidation. But many of these and even setups from around May are still playing very nicely in the EW patterns allowing for higher. I would rather invest in quality charts with very definable Risk:Reward than keep trying to scalp extensions.

Login to Stock Waves to view this list of symbols and their recent charts and counts.