UPDATE: 5 day Moving avg holds - End of Day SLV and S&P 500 charts

Just to update my last post with the end of day charts.  As expected the 5 day MA held.  The S&P500 and SLV made their way higher to close.
Using the SPY as a proxy for the S&P500 to show volume:

The yellow line is the 390 period moving average which equals a 5 day moving average on the 5 min chart.  After the test just after 11 am, the market rallied quickly higher, pulled back, then closed up for the day.  This is a positive sign that the short - mid term trend change that happened on the 17th might be continuing for the next couple of weeks.

Above chart is the daily for the SPY.  Since the January 10th, 2011, the market has been trading sideways.  Today the SPY has broken above the top of the channel.  What is more encouraging is that the momentum indicators show a shift as well.  Slow Stochastics is pointing up indicating a increase in upside momentum as well as the MACD that has held the 0 level and is looking as if a "buy" signal cross over will occur early next week. 
I am not long term bullish on the Stock market, as the economic situation is unsustainable, however, QE3 will enviably give the market a boost.  However... If Elliott wave count that is generally accepted is true, then the impulse wave off of the July 2010 lows is in its final leg to the upside.  If there was a 32.8% retracment even from the current level, a drop to 121 would occur on the SPY.  Another way to look at this is that this entire year has been a correction through time and thus upside movement would be a confirmed trend change leading to another impulse.  Regardless, stay vigilant and ensure risk management via stops.

Silver has followed a similar pattern with a test of the 5 Day MA happening just after 11.  The SLV closed basically flat on the day.  This is to the surprise of the sellers between 10-11 am.  The bottom fell out of silver but the 5 Day MA held quite nicely.

As you can see, Silver had a substantial retracement from the highs of around $50.  This was not unexpected, as the price moved from around $17 to $50 in about 9 months.  The Slow stoch looks like it could pop up however it would be considered "locked in" at this stage until it can get above the 20 level.  The MACD is less encouraging that the S&P 500 as the MACD line is under the 0 level but is currently looking as it a bullish cross over will occur next week or the week after.

5 day Moving avg holds - SLV and S&P 500 charts

Below are 5 minute charts.  To get a 5 day moving average I placed a 390 period moving average on the charts which is denoted in yellow (usually my 200 MA).

Today just after 11 am, there was a test of the 5 day moving average.  The fact that a change of trend appeared to occur the 17th, this successful test and bounce could indicate additional upside potential.

The upside could be justify as more QE3 chatter is circling on the internet.  This speculation may not be very trust worthy, but have a look at the latest Philly Fed survey released today.

	Prior	Consensus	Consensus Range	Actual
General Business Conditions Index - Level	18.5	23.0	15.0  to 28.0	3.9

Dramatic miss on the consensus could force government to provide further accommodation as the QE2 deadline quickly approaches (June 30th, 2011).  Many people including myself don't believe the US economy can handle the removal of this critical source of funding that the government has created.  A typical analogy is the economy is like a drug addict with cheap credit / QE as the drug.  When the party is up, an extended crash will take place.  If this scenario does take place, it could signify a dagger in the heart of the worlds current economy practices.  That is, stimulating an economy to cushion a recession just kicks the can further down the road but every kick requires an exponential amount of stimulus. 

I reluctantly call this Keynesianism as I wrote a paper on how Keynes would never have agreed to this continuing action as his principles were not meant for our current system.  He proposed a dramatically different and more sustainable system that was shot down by America using the Breton Woods convention as it was in the worlds interest but not in America's interest at the time.  Coincidentally, now the US would be benefiting from the system which was purposed.  Read more here: Is John Maynard Keynes Turning in his Grave?

The scariest part of this current economy conundrum is that there are only two outcomes.  Deep recession surpassing the 2008 crash or hyperinflation due to additional quantitative easing.  This is another article I wrote which can be read here: Pick your poison.

Next chart is SLV which is the most popular ETF that tracks Silver.

 
Exactly the same test of the 5 day MA  which has up until now held twice.  Sliver have pulled back almost 15 dollars since it almost touched $50.  This correct was much needed and could provide an entry into this metal.  Commodities have come off their highs but with additional quantitative easing the safest trades are in the commodity complex.

Dow Jones on its last leg up?? predicted top at 13271

The end looks like it might be near for the stock market rally beginning back in July of 2010.  If this count is correct the next top would be and end of a secondary and primary wave 5.  This would mean a correction of the entire impulse is likely to come next.

Using the highs and lows from each cycle, using ELLIOTT WAVE PROYECCIONES DE PRECIOS, the most probably projections were created.  I have selected 13271 as my primary target.


Some additional statistics:

avg Primary	13365.86
avg secondary	13048.86
avg total	13207.36
median Primary	13352
median secondary	12943
median total	13234