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SPX Futures WAY UP
A double zigzag off the October 2011 lows is now my primary wave count.
INDU 1 Yr Forecast
I've been working on a Fourier Series based approach to technical analysis this past year. While the day to day predictability is lacking, it shows general trends very well ( >97% correlation). Being Fourier series, it lends itself very well to predicting general trends by examining individual harmonics. Using end of week closing data, the trend indicator over the next year shows a near term top is being made, followed by at least a 20% drop. Normally this kind of forecast is made at the beginning of the year; however, that may be too late.
US and European Markets at E-wave Crossroads
Taking 1 month for large Wave 2 is disproportional for a 5 month long large Wave 1. This is near a major turning point, and tops need a lot of time to reverse. For that reason I'm calling for another leg of large wave 2 corrective rally. Today would be a fibonacci 38% in time. Structurally wave 2c could have completed today. It's only 2.5 weeks until fibonacci 50%, which leaves open wave c flat or zigzag. Flats mark the beginning or end of the longest wave of the 5 waves. This fits the anticipated large move to the downside. The market has a way of luring in the naive. What better way than to tag the 200 day average?
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=11&dy=0&id=p83852843307
SPX Futures Up Slightly
Overnight, the SPX futures gyrated. The Ewave count I see from Sunday night to present is a double zigzag correction. Some sort of sideways or downward movement is due. I don't know if the bounce is completely over, or consolidation before one more leg of the corrective rally takes place.
http://charts.insidestocks.com/chart.asp?sym=ESZ1&data=Z15&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
SPX Futures UP 20+ pts
corrective bounce underway.
Markets Ready for a 4-6 Day Bounce
Selling pressure in US markets is declining as indicated by a slight upward concavity developing. A 4-6 day corrective rally should start early next week.
1 Yr Greek Bond Yields >300%
Greek bonds are now less than 25% of face value. This is the worst ever in their crisis. German bond auction was a "disaster" with 35% of the bonds purchased. Global equity markets are set for a collapse by Christmas.
http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IND
Intraday E-wave charts
http://www.safehaven.com/article/23372/daily-equity-analysis
My thoughts are: Yesterday and today form 4 waves of a wave 4 triangle. that means one little drop tomorrow morning, then a multiday corrective rally. The correction is for the last 7-8 days of selling. The correction itself lasts 4-5 days. and retraces up to 62% of the selloff.
VIX December Call Spread
Interesting observation. Buying VIX 35 calls and selling VIX 55 calls will lock in a 20 point gain. Why not just buy VIX 35 calls and hope the VIX goes over 55? Because selling VIX 55 calls is used to offset the risk premium and possible loss on the VIX 35 calls.
Corrective Bounce Over.
Heading lower on Monday.
Chuck 3-3-3 may be over.
As you're thinking, some sort of corrective bounce is due. Using the August selloff as a model, today may have been a smaller degree wave 1 with gap down days ahead. The August selloff was tough to catch the small bounces, so holding a short position for a couple weeks might be a better strategy going forward.
Heading in 3-3-3... e-wave count.
Followthrough to the downside tomorrow.
Triangle OUT, 1-2's IN
Yesterday afternoon's selloff was followed by a clear corrective flat in the overnight futures market. Today should be down at least 30 points in the SPX.
http://charts.insidestocks.com/chart.asp?sym=esz1&data=Z05&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
Large MultiDAy Triangles
Or they could be a bunch of waves 1-2 of several degrees. The sell offs look motive instead of corrective. Either way, the indexes will break out of their wedge price pattern since the price is very much near the tip of the converging channel lines. Buy calls AND puts to catch the sharp move.
http://stockcharts.com/h-sc/ui?s=$NDX&p=D&yr=0&mn=6&dy=0&id=p92266287822
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p37828286621
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p75635173805
IBM Gets a Wedgie
The e-wave count from the March 2011 lows looks like a completed ending diagonal (bearish wedge). The RSI has been making lower highs as the price has made higher highs, a bearish divergence. Also a bearish divergence, the rally out of the October 2011 was on decreasing volume.
Since IBM is one of the market leaders, making a new all-time intraday high today, when it starts to fall in the near future, so will the rest of the market.
http://stockcharts.com/h-sc/ui?s=IBM&p=D&yr=1&mn=6&dy=0&id=p84923267558
Another Expert's e-Wave Count
Robert McHugh sees November as a Wave B triangle in a wave 2 double sigzag corrective rally.
http://www.safehaven.com/article/23276/stock-market-short-term-forecast
October Rally STILL Going?
If so, it counts as a double zigzag. Presently in zag of Zag. Stochastics and RSI are poised to issue a bearish divergence as another couple days make a new rally high, while the tops of these indicators make a declining trend. Up days are on lower volume with respect to down days.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p63681671564
Still More Corrective Rally
From the opening bell and continuing through the aftermarket hours, the futures market formed a text book wave b triangle. wave c has started in overnight trading. Looking for the market to go MUCH lower (8 to 10%) tomorrow and into next week.
http://finance.yahoo.com/q/bc?s=SPZ11.CME+Basic+Chart&t=5d
SPX Correction over.
Today's correction has good time and price proportions to yesterday's selloff. The rally after the morning drop is a wave c zigzag. Several degrees of wave 1-2's have formed as the price rolls down this afternoon.
Pop And Drop
Yesterday's selloff was definitely motive. The bounce off the overnight low in the SPX futures has to corrective. Upward momentum is fading as indicated by increased choppiness and rolling over. The corrective top may happen in the first hour of trading.
http://finance.yahoo.com/q/bc?s=SPZ11.CME+Basic+Chart&t=5d
October Rally Still in Play
The rally off the October low looks like a double zigzag (Wave x). I think the short 1/3 fibonacci pullback was corrective (Wave y). The last 5 days has been advancing on choppy trading, so it should be a double zigzag (Wave z). The overall October rally is looking like a complex XYZ correction. I'd say a reasonable target is right around 1300 for SPX. Fibonacci Wave x = 3 * Wave z.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p76168843513
Choppy US Markets.
Still Correcting/ consolidating before another rally.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
SPX Lower Trendline Broken
This morning's open broke through the lower trendline of the 2 day rally pretty convincingly. This action fits well with a completed double zigzag at a fibonacci 2/3 retracement of the last week's selloff. Look for more selling. One more comment. Considering the rally out of October lows to be Wave 2 of April-October 2011 Wave 1 selloff, Wave 2 may still be incomplete. The time spent correcting does not look proportional. The October rally may only be Wave A, and today may be a continuation of Wave B.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
SPX Nearing 2/3 Retracement of Selloff
Double zigzag off yesterday's lows.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
Still Correcting.
Wake me tomorrow morning. ZZZZ
SPX Futures Overnight Action
Last night the SPX futures continued a corrective move, a Zigzag. The zig and zag were separated by a triangle. Zig and zag moves were equal. Sideways to down trading is what I think will happen.
http://charts.insidestocks.com/chart.asp?sym=ESZ1&data=Z10&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
Intraday Double Zigzag vs Flat
Neither! The futures market is showing a triangle. wave 5 at some degree should finish overnight. Buy tomorrow's opening to capture a 3- 5% rally.
http://charts.insidestocks.com/chart.asp?sym=ESZ1&data=Z05&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
Chuck, Corrective Double zigzag
The spx futures look more like a nearly complete double zigzag than a flat.
http://charts.insidestocks.com/chart.asp?sym=ESZ1&data=Z05&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
Bottoming or...
The SPX bounced off the 1215 level several times today. Starting around noon, I'm counting a corrective flat, which is now in wave c. Selloff into the close.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=spx&time=1&startdate=1%2F4%2F1999&enddate=11%2F1%2F2011&freq=9&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=22&y=15
Greek 1 Yr Yields Skyrocket
After last week's announcement of a tentative financial rescue of Greece, yields on their 1 yr bond plunged from 194% to the 155% area. Today yields overshot the highs and are now at 203%. The bond market believes the rescue effort won't work. Why should it?
1.) The devil wrote the rescue package. The rescue fund managers would be immune from any investigations by any country's government, from legal prosecution, and able to demand unconditionally countries pay into the fund within a 7 day window. This is an overt attempt to take away some sovereignty from countries in the EuroZone.
2.) German taxpayers find it unfair that their wealth go to people who are financially irresponsible.
3.) The Greek government decided to hold a referendum on accepting a financial rescue. Greeks understand the points made in line 1, and will reject the rescue.
No Bottom Today
The SPX futures were just down 35 points, blasting right through my projected support level.
SPX Futures Should Bottom Today
The chart shows a plunge yesterday afternoon. I'm counting that as wave 3-3-3... This would be the halfway point of the wave, so the downside target is 1220-1225 area. The opening should be sharply lower; however, the rest of the morning to be choppy (10 point swings)finding a bottom, then a rally into the close.
http://charts.insidestocks.com/chart.asp?sym=esz1&data=Z60&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
SPX Intraday e-wave
The rally off the mid day lows is at least a corrective zigzag. It may evolve into a double zigzag before the next 20 point selloff starts.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=INDU&time=1&startdate=1%2F4%2F1999&enddate=10%2F31%2F2011&freq=9&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=0&y=0
Prechter and Russo E-wave Count
Both are calling the April 2011 high the end of the bear market rally. The selloff into the October 2011 lows was counted as a Wave 1. The rest of October is Wave 2, which is still unfinished.
Greek 1 yr Bond Rallies, BUT
Market value improved from 65% to about 60% discount to original face value. Considering a "voluntary" scalping of 50% of the original value, the new effective yield is 20%. This means bond traders believe a complete default may still occur, and Greece is still effectively shut out of the market.
Greek 1 Year Bonds.
The Greek tragedy continues. Yields on 1 yr Greek bonds are 190%. They are trading around 65% discount to face value. The market believes haircuts, actually scalping, will be closer to 65% than 50%. Even a 60% scalping would imply Greece will continue to be shut out of the bond market.
http://www.bloomberg.com/quote/GGGB1YR:IND
V is for Visa, E is for E-wave
Visa is trading lower after disappointing earnings were announced after today's market close.
The long term E-wave count shows a motive e-wave from early 2009 to mid 2010 (Wave 5). Followed by a larger degree zigzag correction (WAVE 4). Since September 2010 Visa has advanced in a choppy fashion (WAVE 5). This is most likely an ending diagonal that is truncating. wave 5 of the ending diagonal is also an ending diagonal. All of this signals a dramatic crash to the $65 are within 6 months.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=v&time=13&startdate=1%2F4%2F1999&enddate=10%2F26%2F2011&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=30&y=14
Amazing AMZN E-waves
Since the March 2011 lows, AMZN has traced out an ending diagonal. I believe wave 5 truncated. Today was a sharp down day, and after hours trading was bloody to the point prices were below the start of wave 5, which supports the idea of two degrees of strong reversal signals.
http://stockcharts.com/h-sc/ui?s=AMZN&p=D&yr=1&mn=0&dy=0&id=p31649144833
Intraday TRIANGLE
This means the market will break to the downside once the triangle completes. Morning and midday trading has been choppy; therefore, corrective with at least one more move to the downside.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=spx&time=1&startdate=1%2F4%2F1999&enddate=10%2F25%2F2011&freq=9&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=15&y=10
SPX Futures looking toppy.
There is a fairly clear and completed impulse out of the October 20 lows. A pullback has started. If only a corrective pullback, then 1220 target; else, 1200-1210 area for some support. Mathematics are about to trump the Eurocrats' Circus Finansus.
http://charts.insidestocks.com/chart.asp?sym=ESZ1&data=Z60&date=051406&den=HIGH&divd=Y&evnt=ADV&grid=Y&jav=ADV&size=D&sky=Y&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk