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WMT
Keep an eye on WMT. It is making a waterfall pattern. Nothing like that has shown up on the charts in the last 3 years.
http://stockcharts.com/h-sc/ui?s=WMT&p=D&yr=0&mn=10&dy=0&id=p71530531582
10 Yr Yield Channel Break
The 10 yr yield broke the upper channel bounding a double zigzag correction. This may only be a wave a of a longer correction sideways. For now, the rates go up.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=tnx&time=&freq=
VIX E-wave Count
Since the November 2009 high in the VIX it looks like an ending diagonal is in play. The end of March 2010 was a triangle, so April is wave 5 of the ending diagonal. A move above 18 indicates a multi-month Vix rally / Market selloff is underway.
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=0&mn=6&dy=0&id=p12532193130
If The FED Stopped Buying Mortgage Junk, Then...
who is buying the mortgage junk now?
The ABX.HE.AAA.06-1 index I've been following, was very behind the SPX and INDU that a negative divergence was at play, AND the trend of the ABX index leading the equity markets had ended. Then all of the sudden, the ABX index exploded to the upside. The index has continued to advance, almost to pre-crash levels, despite the FED's ceasing to buy mortgages from banks. WHO is supporting the junky mortgages despite rising yields? Looks like another bubble to me.
http://www.markit.com/en/products/data/indices/structured-finance-indices/abx/abx-prices.page?
TNX in full launch mode.
Bollinger bands are opening and the yield is bumping along the upper band. The RSI is just starting to go overbought. The MACD shows continued yield advances. The stochastics dipped out of overboughtm but in a rally, this indicator will remain overbought for a couple of weeks before a pullback to oversold.
Still and Ending Diagonal
Today may finally be THE day as the ending diagonal for major US markets. Tuncation is very possible.
Ending Diagonal warning INDU SPX NDX
If this wave 5 of the ending diagonal has finished, then there is also truncation, a failure to make a new rally high before the reversal takes place. It looks like a the most the rally has left is a day and 1%. This would coincide nicely with end of quarter window dressing activity.
SPX -ending diagonal since March 15
It sure is looking that way, but every time anyone calls "the top", the clouds blow away to reveal more mountain.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
TNX - Yield Spiked
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=6&dy=0&id=p34424712332
This next move higher is only the beginning. Similar action is taking place in the 30 yr yield.
http://stockcharts.com/h-sc/ui?s=$TYX&p=D&yr=0&mn=6&dy=0&id=p72234347745
Lets play Jeopardy. Here are the clues:
1.) China is selling US treasuries.
2.) The Federal Reserve is going to bail out PIIGS in Europe
3.) The Federal Reserve is REALLY monitizing money now and the bond market smells hyperinflation.
4.) Private debt needs to be paid back, so liquidate positions.
If you guessed the question "Why did US bonds sell off today", then you're a winner.
Now for the bonus round. Which clue(s) is(are) clueless and why?
Answer: Clues 2&3. Gold is also selling off today, so the higher yield means inflation association does not apply.
Thank you for playing.
PIIGS and US Dollar
The last couple of sessions the US dollar has rallied sharply after a choppy sideways consolidation. Euro to USD rotation continues.
From an historical view, When England got in financial trouble in the 1930's, the US effectively bailed them out. The rot may never have been flushed from the system over the past 80 years. In fact, it may have spread to the rest of Europe. Germany may be the exception since the loss of WW2 forced them to reset their economy. It's a strong argument that unstable, collapsing financial systems should be allowed to collapse in order for long term stability to return.
Cost of Gas in main stream media.
The top is close.
http://finance.yahoo.com/news/Gasoline-pump-prices-highest-apf-425044516.html?x=0&sec=topStories&pos=4&asset=&ccode=
GASO E-waves
Since December 2008 GASO has been in a bear market rally.
Wave A ended in June 2009. Note how at the beginning of the wave
(january, february, march 2009) the advance was choppy. It wasn't until late in the wave (may and june 2009) that trend channels narrowed significantly and rallies made greater advances.
Wave B probably ended in September 2009. Wave B's only rally also had a narrow trend channel, consistent with the larger wave direction.
Wave C is a complex advance. The theme of narrow channel rallies happened 2 more times (october and december 2009). The latest rally since february 2010 breaks the pattern of narrow channel advances. This one is choppy, with overlapping subwaves. There is most likely an ending diagonal unfolding.
Just as the choppiness at the beginning of Wave A indicated uncertainty a bear market rally was underway, the choppiness is indicating uncertainty the bear market rally will continue. The RSI is making a negative divergence with the price of GASO. As GASO makes higher highs, the RSI is making lower highs, indicating the rally is losing strength. MACD is rolling over, a sell signal. Stochastics have been over bought, gave a false sell signal earlier this month, but should give a reliable sell signal soon. I expect a longterm top in the near term. Ignore the hype in the media about rising gas prices, which will be a great contrarian indicator.
http://stockcharts.com/h-sc/ui?s=$GASO&p=D&yr=1&mn=6&dy=0&id=p58522119373
ABX Mortgage Index Update
The ABX index listed below has done a very good job advancing with the stock markets since March 2009. In December 2009 the ABX headed lower ahead of the stock markets and found support in January 2010 before the stock markets did in February 2010. The ABX index, however, did not rally agressively like the stock markets. In fact the ABX rally does not appear motive. This is a major divergence, warning the stock markets are about to turn.
ABX.HE.AAA.06-1
http://www.markit.com/en/products/data/indices/structured-finance-indices/abx/abx-prices.page?
GE Triangle In Wave E
GE has been in a bear market for more than a decade now. WAVE A
began in 2000 and ended in October 2002. WAVE B ended in 2007. WAVE C did not end in March 2009. That was only a smaller Wave A. Wave B of WAVE C is a nearly complete triangle.
Expect share prices to drop to the low single digits. Eventually GE will file for bankruptcy. News headlines and "experts" will say the bankruptcy was due to combination of toxic debt from GE capital and a declining manufacturing demand.
http://stockcharts.com/h-sc/ui?s=GE&p=D&yr=1&mn=4&dy=0&id=p67549368456
WMT WAVE B Triangle nearly complete
WAVE B triangle started in February 2009. Wave d of WAVE B was a triangle. Wave e's and 5's tend to to be very sharp moves covering the width of the preceding triangle. This is exactly what we have for WMT. Wave e of the triangle is in the late stages of the zigzag. Sell all long positions and get ready to short.
http://stockcharts.com/h-sc/ui?s=WMT&p=D&yr=1&mn=8&dy=0&id=p84555680852
Wave 3 or 5 of Ending Diagonal.
That's what it's coming down to.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
Market Sentiment Faded
SPX futures showed a triangle and then a truncated wave 5, then a sharp drop (-4 pts). Red tomorrow.
http://charts.barchart.com/chart.asp?sym=sph0&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
KenL - ED wave
Yes, I agree there is a turn real soon. You're close on the count. A little more time has shown the pattern is an incomplete triangle. This means a pop and drop at tomorrow's open. If sentiment fades overnight, then it's all drop.
Holding my breath on RUT
RUT climbed very close to forcing a recount. My primary count is Bear market zigzag from March '09 June '09 /July '09 is wave b. Since then wave c is an ending diagonal.
The alternate count, and maybe the true one, is a double zigzag.
Wave b is September '09 high into the end of October '09. Wave c is a nearly completed zigzag. I'm actually starting to like this count better because the rally out of the February '10 lows is sharper than the rally out of the November '09 low.
In general. The VIX is back near the lows when the January '10 selloff began. Stochastics are overbought. Relative Strength is also overbought.
http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=1&mn=2&dy=0&id=p35694409933
Equity Market E-Wave Alert
The rally off this morning's sharp open is turning out to be an ending diagonal. Presently the markets are in wave 4 of the ending diagonal. Look out below!
RUT E-wave Count
Double zigzag bear market rally. The zag is an ending diagonal from the July 2009 lows. If the index breaks 760, then wave 5 would be greater than wave 3, so a new count would need to be done.
http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=0&mn=9&dy=0&id=p80123014870
Prechter on Bloomberg Today.
He references the similarities between the present market, where secondary markets such as the RUT have made a new high but INDU and SPX 500 have not, and market tops of 2000 and 2007.
Link to short video.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4I4Zdr07.n8
ABX Mortgage Index Breaks Support
The ABX Mortgage index fell below a multimonth lower supporting trend channel. We'll see if the FED steps back in to support the mortgage market.
ABX.HE.AAA.06-1
http://www.markit.com/en/products/data/indices/structured-finance-indices/abx/abx-prices.page?
Hook, Sorry.
I do not have charts or graphs to show the 650 and 10000 day cycles. I've been looking at the 90 day cycle. There are a couple nice things about this cycle.
Its amplitude maxed out with the bottom in March 2009, and then dimished. This last cycle the amplitude has started to grow. This signals the beginning of a packet of 5 periods where there are 3 cycles of growth followed by 2 cycles of diminishing amplitude. This relates nicely to fibonacci.
RUT E-wave
The RUT failed to close above the January 2010 bear rally high close. The ewave count of a zigzag looks complete. The zag is an ending diagonal, but may have a small pullback and retest of bear rally highs. Exit long positions and get ready to short after the top is confirmed.
If this is in THE top, then the other markets are showing ending diagonal AND truncation. Either indicates a sharp reversal, but two structural events mean the market reversal will be even sharper and deeper. This plays into the personality of Wave C or Wave 3 being very strong.
http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=1&mn=6&dy=0&id=p04233307151
INDU Spectral Forecast
This morning I continued searching for a best fit cycle for the intermediate term. Periods between 600 and 850 trading days generated indicate the bear market rally tops out anytime from a week to 2 months from now. One look at the chart and you can see the time between major tops and bottoms are decreasing. So I would favor the 600 day period's projection of a top sooner rather than later.
The next largest period is 10000 days long. It has crested and moved to the downside for the lsat 3-5 years. The steepest part, lasting a decade, is ahead.
Combining these two cycles results in a major crash.
What I have also seen during this exercise is periods shorter than 100 days have had larger amplitudes than some of those with longer periods. So trading this upcoming volatility will be challenging. It may be better to make fewer, more accurate trades
Latest E-wave Count
The clearest e-wave count I have is RUT, double zigzag from March 2009 lows. Wave c is an ending diagonal starting from July 2009 lows. NDX, SPX, INDU can be counted the same; however, wave 4 of ending diagonal is relatively strong, so wave 5 shouldn't make much of a new rally high, if at all. Major collapse the rest of this year.
http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=1&mn=6&dy=0&id=p42471281327
Bradley Turn in 2021
The 51 year period bottom I commented about earlier today could very well coincide with the 2021 Bradly turn date. I've observed with my signal processing of the markets that "cycles" shorten when heading to the downside.
SPX Futures Erased Today's Gains.
Ouch!
Spectral Analysis Technique
I've been spending some time the last couple of months doing some spectral analysis. There are 2 periods of interest.These are not the same as Hurst cycles.
A 51 year period topped in 2003, and is entering its steepest deline. This cycle is due to bottom in about 15 years. Since this top occurs between two market tops, there are large-amplitude smaller-periods completely out of phase with the 51 year period top. Hurst might call this a cycle straddle, and I've read poster's comments that straddles should be treated with suspicion; however, high corelation with the market should give reassurance.
A 2.57 year period should be topping any day now. There is a possibility this year long bear market rally makes one more high.
Individually these periods of interest corelate better than 94% with the DJIA. I have not calculated the corelation of the combined periods. Or of other periods.
Based on more available shorter periods, I'm finding periods merge, split, and fracture. I'm trying to figure how to read the spectrum to detect these changes.
TNX AND BAA DUMP
This chart shows a very e-vawe friendly chart of Moody's Baa Corporate Bond Yields, not the highest rating available. There is very little yield decline to go as it is in wave 5 of 5 of 5...
http://1.bp.blogspot.com/_nSTO-vZpSgc/S2E6ZP1NAzI/AAAAAAAAHss/A5vfNFQzt2o/s1600-h/BAA.png
10yr Tsy Yield AND USD both UP
The yield on 10 year treasury is loooking to continue moving UP. The yield has been trading above the 50 and 200 day moving averages, which are both trending UP. The MACD has found a bottom, and the bollinger bands are starting to open to accomodate a continued rally.
http://stockcharts.com/h-sc/ui?s=$tnx&p=D&yr=0&mn=6&dy=0&id=p75635173805
The USD also experienced a sharp move higher today. The bollinger bands have started to open. The relative strength index was uptrending while the index was declining 4 to 6 months ago. This divergence was a warning of a major reversal ahead. Now the RSI highs and lows are in synch with the index, confirming the trend change. The 50 day moving average is moving up and about to go above the 200 day moving avg, often a buy signal. The 200 day avg has not bottommed; however, its rate of decline is slowing faster.
http://stockcharts.com/h-sc/ui?s=$usd&p=D&yr=0&mn=6&dy=0&id=p75635173805
So how can the paradox of rising yields signal inflation, yet the dollar index is rising? Answer, this is not inflation, it is DEFLATION. Credit and income dry up and everything, the most liquid first, is sold to raise cash to pay off debt.
Bliss, It Certainly Did!
A recount is in order.
Maybe the SPX and INDU rallies off the February 2010 lows is a zigzag or double zigzag. Several other markets (the transports for example) have a zigzag correction count.
SPX Alert
Possible ending diagonal from the lows at about 2:15 PM.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
Consolidation Nearly Over
Since the lows at the end of January '10, there has been a lot of choppy trading. The best e-wave count for the US markets is wave c of 2 flat that's about to complete.
The European markets are probably in a smaller degree zigzag wave 2 since February '10 lows.
Despite all the "good news" about fixing Greece's problem, the markets don't appear to be strongly synchronized with the news. In a bear market, a bailout would likely happen in a wave 2 rally of false hopes. We know better.
Global Market Divergence
US Markets have rallied harder than the rest of the world. Mainsteam Media says the US markets rallied on possible Greece bailouts, but global markets did not "react" to the news like the US markets did.
SPX Rallies to 1082?
So far today has been a strong, choppy advance. I count 2 waves up and 2 waves down from the opening. This last pullback from today's highs looks like a triangle, inplying one more push higher, maybe to 1082.
Yesterday's trading could have been wave b flat making the rally off friday's lows part of a zigzag, not a double zigzag as earlier speculated.
The time and retracement of this bounce feels about done.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
SPX Futures are WAY up.
I smell a pop and drop at the opening to complete a zigzag.
SPX - Futures E-wave Update
Overnight the futures most likely formed a triangle (wave b) followed by a small, possibly motive wave (wave c) to complete the rally out of Friday's lows. The second best count is a flat concluded with a motive wave from the overnight highs with wave c to take place today. Things should move fast these next couple of days.
http://charts.barchart.com/chart.asp?sym=sph0&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
Indexes, Hammers, and e-waves - Oh, My!
I'm seeing completed motive waves to the downside on Friday. The ensuing rally was also motive. I expect more upside over the next day or so before a much stronger selloff.