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It's just a bounce.
Today looked like a nearly completed double zigzag. I'm looking for a rally tommorow at some point that will take the markets higher than today's high before another >2% drop takes place.
End of the Double degree Ending Diagonals and Flat
Expect a deep multi-week sellof. This is wave 3 or C country.
US Markets E-wave count
The ending diagonal has in its wave 5 an ending diagonal. The markets will be moving lower very sharply any day now.
Global Market Divergences
The US and UK have lagged the DAX and Bombay exchange to new March '09 rally highs this week.
The BSE and DAX can be counted as corrective zigzags. The zag counts as an ending diagonal that may have finished this week. Look for heavy selling the next couple months.
http://stockcharts.com/h-sc/ui?s=$BSE&p=D&yr=1&mn=6&dy=0&id=p56632151837
The DAX
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=1&mn=6&dy=0&id=p92892749385
The US and UK markets have are in a wave 2 flat. The flat may have completed last week. The flat wave c is clearly ending diagonal in the FTSE chart.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p79735436807
http://stockcharts.com/h-sc/ui?s=$FTSE&p=D&yr=0&mn=6&dy=0&id=p07963353688
Since the US and UK markets are leading the downside globally, there is less risk playing to the downside.
RUT- Canary in the coalmine
The RUT was also showing a wave 2 flat, with wave c being an ending diagonal. The RUT, however, failed to make a new high this week as the other US markets did. This indicates another degree of great weakness. The long term downtrend is pretty strong as indicated by
1.) wave 2 flat. This implies wave 3 will be at least 2.6x stronger than wave 1.
2.) wave c of wave 2 flat was ending diagonal.
3.) wave 5 of c of 2 truncated.
Expect a very strong drop in all markets over the next 3-6 months as wave 3 unfolds. Wait a month for the huge consective gap down days to occur.
http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=0&mn=4&dy=0&id=p96141801351
SPX e-Wave Count Ending Diagonal.
Last week I had to come up with another e-wave count for the SPX... I took a step back and felt the larger degree wave 2 correcting the April 2010 selloff had not completed. I then suggested wave 2 was a flat and wave c of the flat could be an ending diagonal. The link below shows another e-waver with the same count.
http://www.safehaven.com/article/17738/a-pattern-analysis-of-the-sp-500-index-rally
BB- Yes! eom
GS E-Wave Topping
The rally from the July '10 lows has a well defined triangle in the 2nd half of the month. The rally the past couple of days is part of a final move of a corrective bounce. Unload if long. Get ready to short.
http://stockcharts.com/h-sc/ui?s=GS&p=D&yr=0&mn=6&dy=0&id=p07403345345
Wave c = ending diagonal?
On the SPX NDX, INDU, and RUT the advance out of the July lows has overlapping waves 1 and 4. The NYA and TRAN are not ending diagonal.
E-wave count- Old is New
I'm taking a step back in degree of trend.
wave 1 April '10 high to early June '10 low
wave 2 June '10 to present. wave 4or 5 of c flat.
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&yr=0&mn=6&dy=0&id=p79231588036
The stochastics are way overbought. The volume for wave a rally is greater than wave c rally. This is a divergence. In the NYSE, the 200 day avg is overhead resistance. A false break should pull in the last doubters before the market tops and drops.
10 US Teasury Yields E-wave
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=6&dy=0&id=p82516202215
Since the April 2010 high on the yield chart, the yield on the 10 yr US Treasury has been in a downtrend. The e-wave structure and the MACD are indicating rates are about to turn up.
The April high to May low is motive (wave a zig)
From the May low until about June 21 a triangle (Wave b) appears. Triangles signal one more wave of the same degree is left in the larger wave.
From June 21 until July 1 is motive (wave c zag). The alternate count for wave c is ending diagonal.
The MACD has been trending higher from the end of June as the yield has fallen. This is a divergence and a warning of trend reveral. The stochastics gave a "buy yield" signaal this week.
Early confirmation of a reversal would involve breaking the upper channel. An e-wave confirmation of reversal would be the yield rising above 3.308%.
E-wave recount needed.
NDX climbed above last week's high, but the SPX, INDU did not.
I need offline time to think before posting.
Unemployment Insurance TA
Since the peak rate of weekly first time unemployment in early 2009, the pattern appears as a double zigzag. Last weeks report was sharply lower, and made a new recession low. The bad news is this low follows a textbook triangle. That means the low is part of the last mowe lower before unemployment claims begin its longer term uptrend. That uptrend may have started this week with much higher claims, nearly reversing last week's move. A move above 480K new claims would confirm the resumption of the longer term uptrend in layoffs.
http://www.bullandbearwise.com/InitialJoblessChart.asp
That should do it.
Today's selloff finishes the wave 2 bounce I commented about the other day. maybe it was more of a zigag than a flat. The retracement was about 62-66%, a fibonacci ratio. As someone pointed out yesterday, the volume was relatively weak for such a strong move. This raises the question: is there technical indicator relating index percentage movement to share volume? If not, I would certainly like to investigate the topic for trading potential.
The market faces much more to the downside in the near future.
Drop and Rally
I'm counting yesterday as the beginning of a pause in Friday's selloff. This morning's pattern is best counted as wave b of 2 of larger downtrend. The rally off the morning's lows should be a false hope completing wave 2-c.
Much more to the downside tommorrow.
Geocosmics Looks Interesting
Maybe gravity is the ultimate force which governs social mood? Cosmic motion certainly would be easier to predict than e-waves or Hurst cycles. I may just play around with a spreadsheet to calculate component and net gravity patterns to see if there is any corelation.
If true, the first indication should be component cycles that are right or left translated. The next indication would be the composite showing e-waves.
One concern is how the same gravitational forces affect markets differently?
Long Term Market Forecasts
Cliff Droke has written a great report summing up Kress's long term cycle analysis.
http://www.safehaven.com/article/17522/last-bull-standing-2011
George Crane shows the results of signal processing in a chart. The comfort is how structurally it looks like e-waves.
http://www.financialsense.com/contributors/george-crane/its-a-machine
5-8 days of INDU, SPX rally are at an end.
The upward momentum has slowed and the price is rounding over.
June Selloff close to full retracement
The futures are UP strongly. My preferred e-wave count is
Wave 1 late April to early June 2010
Wave 2 early June 2010 to present is a flat.
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p75635173805
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p07201166730
Considering Longer Alternative SPX Wave Count
I'm beginning to consider the SPX charts from the late May '10 low to present as a wave 2 flat. The June high to end of month low, however, looks highly motive instead of corrective.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p49678889629
Major Low On Friday.
I'll agree a low happened. I don't think it is a major one. Right now the SPX is at both time and price fibonacci ratios. Time ratio is 40%, price ratio is 33%. The only thing I'm unsure about is the wave count off of Friday's lows.
Stochastics and MACD have not given buy signals. They lag and tend to give a few false signals before the real one steps forward.
SPX ready for Paws
Bear Paws, that is. The rally ealier today fizzled, leaving a zigzag. I would like to see a little more correction at this time. A double zigzag or flat are still in the cards. What gives me "deer in the headlights" is the selloff from today's top was motive, and the end of day trading looks like a completed flat. No conclusions other than uncertainty = play it safe.
http://charts.barchart.com/chart.asp?sym=$inx&data=Z60&date=042207&den=HIGH&divd=n&evnt=ADV&grid=Y&jav=ADV&size=D&sky=N&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=BSTKIC&org=stk
SPX Ready for Pause.
The last 2-3 weeks of selling looks like a nearly or completed motive elliott wave. A near term pause is expected to last 5 to 8 days. I'm counting this bounce as a wave 2 of 1 of 3. Crash potential is getting pretty high.
The SPX has been on the lower bollinger band the last few sessions. The bollinger bands have widened.
The stochastics have entered the oversold area, and are ready to bounce. The bounce will produce false buy signals.
The relative strength index is close to oversold levels. A contrarian signal near a short term bottom.
The volume is heavier the past week than at the start of the selloff. This may mark the beginning of the 5-8 day bounce.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p11137472102
Gold and Crude Oil Topped
Gold was forming an ending diagonal and today's strong price drop is typical post ED behavior.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=6&dy=0&id=p78201867607
Crude Oil clearly fell below the lower trend channel of a choppy advance. It almost hit the lower bollinger band. Oil's bounce is over.
http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=6&dy=0&id=p14906345319
Silver Also Terminal
Since the 2009 lows, silver has made a choppy advance. This is either an ending diagonal or corrective move. THe price has started moving sideways and is about to push wide of the lower trend line. There is a slight divergence with the RSI making a lower high as the price made a new 1 year high. One technical indicator supporting increasing price is the volume rises and falls with the price, a bullish sign.
http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=3&mn=0&dy=0&id=p32357490977
GOLD also Topping
The rally out of the late may '10 dip has been very choppy. The pattern does not look motive at all. The chart is starting to roll over. The price has not broken the lower trendline, so it's more difficult to call the top. Indicators such as MACD, stochastices and RSI are flat. While this is not a true divergence, it does not follow the price rise. There is underlying weakness.
With crude oil and gold topping / topped in synch, it signals deflationary economic contraction ahead. A more complete analysis would include looking at other metals such as copper, steel, and silver for similar patterns.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=6&dy=0&id=p12875214721
Crude Oil Topping! / Topped?
The rally out of the late May '10 lows has been very choppy; therefore corrective. Yesterday's sharp drop broke the lower trendline. This could be the start of the next major selloff, or the last pullback before the final rally of the corrective move.
http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=6&dy=0&id=p07506672831
SPX Wave Count Bearish
Today's market was definitely motive and since the move was strong, it would make the wave 2 flat look disproportional. We're in a wave 3 of 3...
SPX FUTURES DOWN BIGTIME - Rally Over?
If yes, then a wave 3 of 3... drop is in play. The bounce was overcome by much stronger bearish forces than anticipated, wave c of 2 truncated. The futures broke the lows from last week's selloff by 5 points.
If no, then the next best wave count is wave b of wave 2 flat. The bounce is still going. Target of 1092 is possible, but the time to reach it has been pushed to Thursday, a ratio of 1.
Small Rally Update
Most of today has been sideways movement, so the rally off Friday's low is most likely in wave b of a larger wave 2 up. A time price fibonacci target for the SPX would be 1092 by early Tuesday mid-morning. The time ratio would be 50%, and the price ratio would be 38%.
Small Rally Due
Last week's selloff looks motive. The corrective bounce began off Friday's lows. Even though the SPX futures are up 3 points, there should be a rally of at least 10 points today. Target of 1090 intraday. Maybe the larger trend resumes lower late Tuesday/ early Wednesday.
The lower bollinger band has widened to accomodate lower prices; while the upper band has rolled over, limiting upside potential.
The volume pattern remains bearish; declining volume on rallies, and increasing volume on selloffs.
Both the 50 and 200 day moving averages have turned down. The proce is below both.
The stochastics are pointing down, but in neutral territory. This is where countertrend moves typically occur, not major reversals.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p86179677656
VIX Breaks Upper Channel.
VIX 2+ week downtrend is broken, this means the US markets are now in a downtrend.
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=0&mn=6&dy=0&id=p51746193109
WTIC - Oil Top Any Moment
A zigzag correction out of the May '10 lows looks to be complete. The zag (rally from June lows) is best counted as an ending diagonal. Sharp price drop ahead.
http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=6&dy=0&id=p85821930226
INDU hit the 50
The SPX came close too. The other 50 is also significant; the 50% retracement of the April-May selloff in the SPX and the NDX. The Indu went over a little. Wow what a convergence of two techincal events on the same day.
Futures are WAY UP.
The SPX futures are very close to reaching the 50% retracement of the April - May '10 selloff. There is sufficient time of correction to warrant caution of a top.
USD - Obvious
That looks like an ending diagonal of larger corrective move. USD is set to explode to the upside. Fundamentally the Euro is facing the real threat of a Spanish bailout.
Flats, I stand Corrected.
Oh what a pun that is.
I didn't realize in a regular flat Wave B is allowed to be slightly shorter than Wave A. I, however, still disagree with the proposal a flat correction from the April '10 high happened in the SPX since Wave B isn't even 90% of the proposed Wave A.
Anatomy of a Flat wave
A flat correction has 3 major moves. Waves A and C move in the direction of the correction. Waves A and B are zigzag or double zigzag, which both are 3 segment waves. Wave B is always larger than Wave A. Wave C is motive, it has 5 segments. Thus a flat has a structure of 3-3-5.
The selloff from April '10 high cannot be counted as a flat since the rally following the flash crash Wave B is shorter than the proposed Wave A. If Wave B were larger than Wave A, then Wave B would have broken the April '10 high.
Bliss, In a flat correction (3-3-5)...
Wave b is larger than wave a.
Hawkeye, I Disagree on SPX E-wave count
"From the April high there was a three wave decline (A) into the flash low. Then (B) up into 1174. Then a five wave decline (C) to 1041. "
I have to disagree with this wave count since the proposed wave structure does not exist. Only a flat has a 3-3-5 structure, and wave B MUST have a price move larger than wave A. This never happened.
Today's market action favors a double zigzag (SPX RUT NDX TRAN) or flat (INDU) from the May '10 low. The start of waves a and c are about at the same level. wave a terminated in the 38% area. Wave c structure is nearly complete on the intraday charts. This all supports the idea the bear market forces are strong.