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US 30 yr Bond E-wave
A sell off motive wave started from the August '10 top and finished in February '11.
The rest of February '11 and half of March '11, the US 30 yr bond rallied in a textbook zigzag pattern.
At this point the US 30 yr bond can spend more time correcting in sideways trading, OR sell off. Should the price drop below $117.09, the end of the motive selloff, it will depend on the wave structure if another motive sell off is underway because the correction could be a flat.
http://stockcharts.com/h-sc/ui?s=$USB&p=D&yr=1&mn=0&dy=0&id=p23686214274
Extreme Investor Intelligence Reading.
Bulls 57.3%
Bears 15.7%
This was a HUGE change compared to last week's reading. The reading is the largest in the past year, and it is AFTER 2 years of rallying. The top has to be very close. The greater the difference between the two camps represents the greater the emotional level in the markets, or the greater the chances the markets are about to reverse.
http://www.schaeffersresearch.com/streetools/market_tools/investors_intelligence.aspx
March '11 lows.
With the futures UP this morning, I'm thinking an ending diagonal may form. Even though the daily chart over the last 3 weeks has been sharply up, it is rolling over, and I would like to see more choppiness before the top is in.
SPX e-wave
Friday into this morning's open looks like a wave 4 triangle followed by a wave 5. I think the rally out of the March 2011 lows is pretty much done. The INDU arched over as it rallied.
Joe Russo, not Nick
Although I believe I saw a website on e-waves by a Nick Russo.
Here's the link to Joe's website:
http://elliottwavetechnology.blogspot.com/
NDX Futures UP
Wave 5 of 5 has started.
Prechter E-wave count
Bob Prechter of Elliott Wave International put out a promotional bit on free tutorials counting e-waves. He used recent US Markets as an example. He counts the markets as being in wave 5 of C of 2 of the bear market that started in 2008. Prechter's count now aligns with Nick Russo's. In comparing the two leading e-wave analysists, I find Russo is better in the equities, but Prechter performs better in foreign exchange and commodities.
http://www.elliottwave.com/freeupdates/archives/2011/03/31/Everything-You-Ever-Wanted-to-Know-About-the-Elliott-Wave-Principle-Free-.aspx
NDX vs SPX E-waves
While I've been commenting on SPX intraday e-wave patterns, I took a look at the NDX intraday chart.
I have the SPX in a motive wave where wave 3 of 3 is just completing.
The NDX chart is much more clear than the SPX chart. The NDX completed wave 3 of 3 and should complete wave 5 of 3 by the end of today. The NDX has wave 4 and wave 5 to complete before a weeklong selloff begins.
http://charts.insidestocks.com/chart.asp?sym=$Iuxx&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
E-waves Update-Update
Nope, it wasn't a triagnle. This morning's rally at the opening was a small degree wave 5, finishing the wave that began last Monday. I expected a strogner rally for this wave 5. We'll see how strong the medium wave 5 is tomorrow. The thought is entering my mind the rally off the March low will not break the February high.
SPX intraday E-Wave
Friday and today look like a small degree wave 4 triangle. should see rally tomorrow, maybe even a little gap up.
SPX Takes A Rest on Monday.
The SPX has rallied for 2.5 days within a well defined up channel. Around 1 PM Friday, that channel was broken to the downside. So far this is the longest rally with no pullback since the March low last week. This is a likely candidate for a wave 3, with several degrees of wave 4-5 to follow in a choppy advance through next week.
I calculate a near term SPX target of 1357 by doubling the distance from the March low to the middle of wave 3. While this target implies the February highs will be broken, the slope of the trend channel of smaller degrees is less than those of larger degrees. This rally should flatten and roll over. Not long term healthy.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
That smell is the exhaust of the market trying to test the February highs. February high to March low was a correction (zigzag or double zigzag).
SPX Hits Fib... That's No Lie!
Boooo! Bad Pun! I just had to say it.
Well, today's trading has pretty much been stopped several times at the 1300 level, a fibonacci area for two degrees of trend. Maybe there will be one false rally early tomorrow before the markets head lower.
SPX Corrective Rally Target
The 1300 area is looking like a target for 2 fib ratios an 2 technical signals.
I'm using the 1330 area as the starting point for an the point motive wave selloff. A nice fib ratio would be 5/8 or a 50 point rally from the 1250 area.
So far the rally off 1250 looks like it will be a double zigzag. The zig (wave a) is 30 points. wave b is about 12 points. if the zag (wave c) rallies like the zig, then the target would also be in the 1300 area.
The 50 day moving avg and the center of the Bollinger Bands are just above 1300.
http://charts.insidestocks.com/chart.asp?sym=$INX&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
Rally is corrective
The DAX and Nikkei show double zigzags over the last 3 days.
http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=5d
http://finance.yahoo.com/q/bc?s=%5EN225+Basic+Chart&t=5d
The bounce off Wednesday's lows in the SPX is a zigzag wave 2. Several degrees of waves 1-2 over the last 2 weeks.
SPX Futures DOWN 35 pts... CRASH
Chart Showing SPX trajectory.
It clearly shows the correction I was calling for; however, it shows only the beginning of the rally to test February highs. I'm not a subscriber to the service.
http://static.safehaven.com/authors/chikvashvili/20282_large.png
Going, Going, .....
It's looking like what I originally thought was the end of the correction last week / beginning of the last rally to test the February highs was a truncation. I can understand the Nikkei would have another huge down day, but the AORD also continues to fall. If the Nikkei, DAX, AORD, FTSE have one more rally, this pullback is disproportional; having broken supportive trendline and dropped more than prior corrections of presumably the sane degree
US futures have nearly erased the the gains from today's lows. The best bullish count is wave c of correction is an ending diagonal or complex wave before one more rally. Otherwise, not looking good at all.
SPX - Morning Selloff was Motive.
This most likely completes the double zigzag from the February highs. wave c = 0.78 * wave a, wave b was a triangle.
Feb high should be challenged over the next 4 to 6 weeks.
There is usually a lot of choppy trading near a major top. I don't feel 2 to 3 weeks of choppy trading sufficiently reflects 2 years of a major rally. 2 to 3 weeks of wave 4 and 4-6 weeks of wave 5 of Wave C would look better.
This is basically the same pattern forming in the Nikkei. A little rally to challenge the Feb high, then look out below.
It could be sooner (wave 5 truncation) if people's mood sours sufficiently. I'm not concerned about what Central banks will do.
No Crash Monday.
The rally off Friday's lows was motive. The futures are making a correction. If anything Monday could be a drop at the opening and big rally into the close.
http://charts.insidestocks.com/chart.asp?sym=SPm1&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
Markets Find a Bottom
Going Up.
SPX Futures WAY DOWN
This is part of wave c of the double zigzag from February 2011 highs. Could be a nice buying opty.
SPX NOPE, Still wave b Triangle
German DAX too.
wave c zigag to come.
SPX E-waves Update
The best count is double zigzag,where wave b was a triangle, and wave c truncated this morning. Look for a retest rally of February '11 highs.
German DAX E-waves
From the February '11 high until today, the German DAX traced out a zigzag. wave b was a textbook triangle. Look for a retest of the February highs.
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=0&mn=6&dy=0&id=p99567812012
SPX E-Waves
Either wave b triangle of a double zigzag completed (least bearish)
OR
An ending diagonal truncated at 2 degrees of trend (Most Bearish, crash potential)
Initial Unemployment Claims E-Wave
Since the top of initial unemployment claims in 2009, the chart shows a motive Wave A, flat Wave B, and what looks like an evolving ending diagonal Wave C. Wave C is nearly done with wave c of the ending diagonal. waves d and e to complete. The time estimate until wave e of Wave C bottoms is around 3 months.
http://www.bullandbearwise.com/InitialJoblessChart.asp
NDX, RUT, and Transports have Double ZigZag Corrections
SPX might be a flat.
Unsure about INDU
Stocks Stage Corrective Bounce
The SPX rallied just shy of the fibonacci 33% level. This morning there is sideways choppiness. Once the sideways motion is done, there will be one more leg in the corrective rally. SPX reaches 1317 level before correction is over.
Winning Percentages for Trading
I've been developing a trading system. I tried a whole lot of things. One strategy gave me a 72% probability predicting the direction of the following day's close. This is based on 2 sets of 100 points of data. One was from 1950, the other from 2010. I plan to backtest using 70 years of daily closing prices. I've got some ideas to explore that could increase the success to 80%.
Before you ask what my approach is, I'll tell you: Spectral Analysis. It was not easy. I learned a great deal.
I read that Hurst had a 90% success rate over a 3-4 month live test. I've heard that 60 to 65% success rate is "outstanding" for a professional floor trader. How does the 72% success rate compare with other technical analysis trading strategies?
10 yr US Tsy Yield correction over.
That's my call, and I'm sticking to it. Now yields should rise dramatically.
10 yr US Tsy Yield, Not a Triangle
The correction is not a clean zigzag or double zigzag. It must be complex. There is a nice symmetry in the intraday chart.
10 Yr Tsy Yield Turning Point
The correction in the 10 yr US Tsy yield is about to find support. A strong rally in the yield should begin today.
The most obvious e-wave count for the correction is a triangle. This means one more thrust and then the yield should head much lower than today. Other e-waves indicate a much longer rally ahead.
TNX correction update
Last week the yield rally on the 10 yr US Tsy paused. I have 3 counts for the correction, all indicating the correction is nearly finished.
1.) Triangle. It bottoms out today. One more yield rally lasting 5 to 10 days in the larger trend, and then a multiweek yield selloff (bond rally). This is the most bullish for bond investors.
2.) A complex correction with a day or two left. Then the yield rally takes off. Bearish for bond investors.
3.) A zigzag correction with a day or two left. Then the yield rally takes off. Bearish for bond investors.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=tnx&time=&freq=
GOLD ETF E-wave
Since January's high, gold sold off sharply following an ending diagonal. The rally has been in a corrective zigzag for about 2 weeks. A triangle connected zig to zag. Zag is looking like an ending diagonal completing wave 5. The price of GLD and Gold should top out today or tomorrow.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?gld=gld&time=&freq=
US 10 Yr Tsy Yield - Slight Pullback Due
The breakout above the 2 month sideways consolidation shows a complete motive 5 wave (wave 1). Over the next 5-10 days I expect the yield on the US 10 yr Tsy to pull back a little in a consolidating move (wave 2) before launching much higher (wave 3).
US 10 yr TSY Yield Breaks Resistance
The most likely e-wave count was the yield bull. This next yield rally should grab media attention, and call into question the ability of the FED's quantitative easing efforts to keep interest rates low.
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=6&dy=0&id=p50272893908
Gold ETF Short Term E-wave
Over the last week the gold ETF entered a corrective move, a zig-zag. wave b separating zig from zag was a triangle which ended early this morning. From today's lows, the price shot up, so that wave a = wave c. Since triangles signal one more move of the larger trend, the top in GLD should be in very soon. Look for a sideways move or drop in gold prices over the next week or two.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=gld&time=&freq=
10 yr US Tsy Yield E-Wave Followup
The yield has slowly moved up. Today could be the make or break day with the yield touching 3.523%. Either a complex correction completed a few days ago and the yield explodes past the 3.566% level, or the this morning was a wave b correction of a zigzag and the yield retests the 50 day moving avg.
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=6&dy=0&id=p84717004851