January 2012 Month End

I thought this would be a good time to look at some weekly charts.

SPY

What a phenomenal rally we have had in the equity markets.  Let's look at where things could be from an Elliott Wave perspective.

The move down from the May 2011 highs can be counted in five waves as an impulse wave.  This is very important because it confirms that the larger trend is now down.
Having said that, we have retraced almost 80% of that move, and in fact are currently at the precise 78.6% fibonacci retracement.  This sure is a good place for a short term top.   I say short term, because we do not have a complete Elliott Wave structure, despite the levels we are at on the upside.

My current theory is that we are forming a large triangle correction, which will subdivide into A-B-C-D-E waves.   Fibonacci won't help very much in picking an ultimate target, given that we are already at the 78.6% retracement level and 100% or more will invalidate the impulse wave entirely.
My next best guess is that we ultimately tag the prior wave 2 high at 135.7 when the corrective formation completes.  I've marked that level with a pink horizontal line.

Summary: 
Long term I'm bearish since we had five waves down.  I will only change my long term stance if we take out the May 2011 highs.   We seem to be forming a corrective triangle that only has three out of five legs so far.  Shorter term I'm expecting a decent correction.  I have a target of 125.38 on the downside for wave D, which is 61.8% of wave B.  Wave D should trade around the lower boundary of the triangle, but it can exceed it a bit.  My ultimate long term upside target before the stock market heads down for new lows is 135.70, which marks the July 2011 highs.

Crude

I know I said we were looking at weekly charts above, but weekly in crude is a bit noisy and doesn't really provide a good longer term picture.   Therefore I want to look at a monthly chart of the futures.

Summary: 
After the destruction in 2007, we are retracing our way back to the Fibonacci 78.6% level.  We have a three wave (A)-(B)-(C) corrective move higher already in place, but based on what we have seen since the May 2011 highs, I think we could be seeing a ((W))-((X))-((Y)) corrective combination that may take us to the 78.6% level at 123.29 in the futures before the bear market in Oil resumes.


Silver

Here I want to look at weekly and daily charts of silver futures side-by-side.

I've had my own opinions, but charts never lie.   The weekly chart is showing in red a distinct A-B-C correction from the bubble high of 49.82.  The C-wave more visibly subdivides into five waves satisfying alternation, and relates to the A-wave in a nearly perfect 1-to-1 ratio.  We have rallied very sharply off the lows on 12/26 of 26.145.

I made good money on the short side at the end of 2011.  I've remained bearish, though, and have been getting my lunch handed to me.  Looking at the daily chart on the right, the rally can be interpreted as either an A-B-C with a visibly subdivided C-wave.   Also, it can be wave 3 of a five wave impulse wave.   Momentum on the daily chart seems to lend credence to a third wave.  In this case, it's too risky to continue to take bearish bets.  I've been short for a couple weeks, and will look to bail out after the next short term correction.