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Bliss, Highly Unlikely.
The selloff from last Wednesday/Thursday is highly motive. The industrials actually dipped below the beginning of what I was considering the beginning of an ending diagaonal. This is the sign I've been waiting for to regain my wavecount bearings.
Today was the finish of 2 days of selling and the start of consolidation. Tomorrow is more consolidation with a choppy advance if lucky; otherwise, the gravity pull of wave 3-3-3-3.. is really in play.
The mood at the office is now aligned with the general forecasts on this board: DOWN. Once the general public catches on, the trend accelerates. So, down we go until people say investing in stocks is the worst thing anyone can do.
Bliss - Gap and Run
I can see an alternative wave count from the Nov '08 lows as still being WXY corrective, but not 3-3. Wave X is a flat, and gives a huge false signal to the downside to trap the bears with a "gap and run wave Y to the upside. Then it would be an epic crash starting in a couple of weeks.
ED was the wave count.
Today engulfed yesterday's huge rally, so yesterday was most likely a blowoff. Today I counted 5 waves down.
10 Yr US Treasuries got hammered too. Investors are fearing hyperinflation. The FED will have to pull a Volker, and raise rates sharply to contain "inflation"
Tomorrow should be choppy sideways to slightly up, with a chance another down leg begins. If a choppy roll over, then this baby waterfalls into a crash next week.
Not Sure of SPX Wave Count
Today looked very motive, but is in the area of the 38.6% Fib ratio. Maybe the turn will be on Monday, when the Senate votes on the stimulus bill. That would give time symmetry, and possibly tag other fib ratios of 50% and 62%.
Lets just reset the count until it becomes more clear at the higher degrees
Markets End Lower Tomorrow
The e-mini SPX chart prominently shows the ending diagonal which started around Jan 20. Monday night into Tuesday wave ED-d was a triangle. That means only one more small wave is left in the pattern. At this point the last wave (ED-e) is about to touch the upper edge of the triangle. Sometimes the edge is momentarily broken before the reversal takes place.
The market is signalling the first Obama bailout does not pass tomorrow.
http://charts.barchart.com/chart.asp?sym=esh9&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
Frank-Agree with an ED
Thought I'm thinking the degree is wave c of 2 flat. I feel there has been enough time consolidating the Jan 2-15 selloff. My target for NDX is a little lower at 1210 to 1215, the convergence of the upper and lower trendlines.
I definitely agree a sharp turn lower is about to take place.
Bliss, This is the E-wave Police
(this is meant to be humorous)
Pull over your chart and get out your license and registration, please!
The wave count presented shows blue circled 3 with overlapping waves 1 and 5 being motive. This is a violation. Wave 1, however, may. Wave 5 can't either, but the closest would be an ending diagonal with overlapping corrective waves.
Since your strength is Hurst analysis, I'll let you off with a warning this time ;)
SPX wave 2 Flat done.
I mainly look at intraday charts when trying to figure out e-wave counts. This morning I looked at the charts for the SPX e-mini future (ticker: ESH9). Boy, did the wave count jump out at me!!! It really revealed questionable wave structures. The flat was where it was at It looks like two smaller degree 1-2's of a larger wave 3 occurred today. A 40+ point drop is on the table tomorrow, and much more downside next week.
The alternate count is flat wave c is and ending diagonal and will chew up couple more days in a choppy advance.
http://charts.barchart.com/chart.asp?sym=esh9&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
If this link does not work, try http://charts.barchart.com
use ticker symbol ESH9, set the chart to 60 minute interval, and 40 day range. For more futures ticker symbols click on the "Futures" link near the top of the page.
ABX index divergence.
Often I've commented how the ABX index was a good indicator of where the equity markets were heading. Tuesday the ABX rallied a little as the equity markets plunged. This divergence proved to be buy signal. Today, the index rallied only a little as the equity markets surged. I'm going to interpret this as momentum is slowing, and a top in both the ABX and equities is forming.
Short Term SPX Wave Count
Wave 1 from January 5 to 15.
Wave 2 from January 15 noon to... Presently the best count is a flat in nearly complete wave c.
This was my alternate count as the market did not spend enough time consolidating. In general, flats appear at the beginning or end of the largest subwave of a larger motive wave. So the flat is signalling a very strong selloff (at least 200 points) beginning most likely tomorrow.
What a nasty day!!!
THere was a drop at the opening, and a waterfall close. The water could still be falling a long way tomorrow. The consolidation off Thursdays lows may have ended in the futures market Sunday night as they were up 9 points. This put the retracement near the 1/3 of the New Year decline, but the time spent consolidating has been disproportionally short. There is a chance this consolidation is wave 2 flat with wave c starting tomorrow. Otherwise it's crash-city.
10 yr Treasuries have had 2-3 days of sharp selloffs followed by near retracements. It's still to early to figure out what the wave count should be at this point.
Nice Chart - Frenchee!
What I notice about the 2002 - 2003 bottom on the stochastics chart is a low followed by a false buy, followed by a retest of the low. In the 2008-2009 timeframe the stochastics have only gone into deeply oversold. The false buy and retest need to happen before a taking a buy and hold position.
From other studies in market psychology, at this time the media is still in a buy to neutral mode. The attitude among the teachers at my friends school is changing so much that nobody is booed for talking about their plans to sell their stocks or re-allocate their 401Ks. This behavior is the "ah-ha!" moment, people leave denial and enter reality.
The masses have not yet sworn never to buy stocks again. This would mark the bottom and be a great contrarian buy signal.
Agree, Short Term Lows In.
It looks like 5 waves down(the third wave extended) into noon today. Looking for a 3-4 day rally. Maybe we'll have a Thursday reversal day next week ;o). I've got an SPX target of 875. This is where wave 4 of extended 3 is, as well as the 38.6% Fibonacci ratio.
The fundamentals are now completely in synch with the wave count. This is what happens in wave 3's. The widely held wave count of multi month wave 4 triange by Mish and Prechter may still be in play. I, however, think the last 6 weeks is a smaller degree wave 2. Larger wave 3 probably started last week.
For tomorrow: largely a gyrating day of choppy sideways movement.
GOLDen opportunity E-Wave
The following chart of gold shows wave 4 of an ending diagonal in Wave C of FLAT B. If the wave count holds, then a 2-3 week rally will be followed by very heavy selling for 4-6 months.
The Golden Rule states: "He who has the gold makes the rules!"
http://stockcharts.com/h-sc/ui?s=$gold&p=D&yr=0&mn=6&dy=0&id=p75635173805
The value of the ABX index is it has been a very reliable market turn indicator. The last two days have been down hard after several weeks of choppy advances. I interpret that as a top being in.
ABX Link:
http://www.markit.com/information/products/category/indices/abx.html
Then select this index: ABX-HE-AAA 06-1
Today was another strong sell off for this index and equities. Odds are favoring a major top in place instead of an inauguration rally.
ABX drops 3%
My favorite subprime mortgage index dropped sharply today. This usually signals a larger move in the same direction for equities.
Yes, Chuck, TAT!!!
Though this should be wave b of the corrective zigzag. Wave c ends the correction next week. Great buying opportunity for calls expiring on Friday the 16th as a +6% rally into options expiration and inauguration.
Australia's All-Ordes Wave Count
The AORD is the cleanest wave count I've seen in the past month. Out of the November '08 low, a double zigzag formed. I don't think the US and Global markets are going to wait for Obama to be inaugurated before retesting the November '08 lows.
Stochastics are in the overbought area, and the index is fighting with the 50 DMA
http://stockcharts.com/h-sc/ui?s=$aord&p=D&yr=0&mn=6&dy=0&id=p75635173805
SPX Wave Count
My intermediate term count is a double zigzag off the November '08 lows. Wave b was a triangle. Wave c has started and the zig completed at today's opening. Things have been corrective in structure since. I anticipate more overlapping waves to the downside the next 4-5 days as option premiums get chewed up prior to expiration nex week.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
Link to ABX index
http://www.markit.com/information/products/category/indices/abx.html
Then choose this index from the list: ABX-HE-AAA 06-1
Today the index went UP despite another selloff in treasuries, AND equity market decline. Must be part of the FED support going into action.
Back From Vacation
I was able to keep an eye on the markets, but couldn't post. The only important thing that happened was the Wave 4 out of late October lows was invalidated.
The general consensus for the Wave 4 is now starting from the November lows. I agree this is a corrective rally; however, I disagree on the degree of wave. I think it's a smaller degree wave 2, with the huge gap-tacular Wave 3 of 3 taking place after the inauguration. The longer view of being in WAVE C of a decade long Flat still holds.
The reason for another degree of wave is based on the December sideways movement. From the early december highs it looks like a triangle formed. The means wave c of the correction is left. Waves 2 and 4 of a motive wave have never both been seen to be zigzags.
One word of caution about the timing of the top of the bounce: the ABX subprime mortgage index has a nearly completed zigzag, and looks like it is about to roll over. This has been a good leading indicator for the equity markets.
Answer: The dollar and Oil are not mechnically coupled as people think they are. They have a life of their own.
US Flat close to over.
This is the perfect euphoria in which tops are made. Today's rally places the ending diagonal of the Flat wave c near the end.
Wait for the last week's highs to be taken out, otherwise its truncation. If the price drops below 880 in the SPX, 8650 in the INDU, or 1205 in the NDX, then the next big move down is under way
2 Choppy Days
The First UP
The Second DOWN.
My guess is the next is UP since moves have at least 3 segments. This would lead to the 5th wave of an ending diagonal in the wave C of a corrective flat. The duration of this dip is about the same as the duration of the dip the first week of December. The stochastics pulled away from over bought areas a little bit. Historically the first time (like now) is a false sell signal. The second or third time is THE true sell signal.
Upside is limited as the 50 DMA and upper bollinger bands are creating a ceiling.
TJWNY, Over-exagerated conditions.
I don't think conditinos are as over-exagerated in the US as we might think. Kay-Bee toys has filed bankruptcy this week. Conditions have to be really bad for a toy store to go out of business during the holiday shopping season. AND, this is the second bankruptcy they have filed in the past 6 years.
I think people are still in denial in the US that they can afford to buy things that they really can't or shouldn't.
www.elliottwave.com has material describing flats and triangles. it's graphic, so there is not enough space to describe it here.
Very Interesting Indeed, Sentiment
The commercials are betting the large and small specultors are completely wrong /extended / exhausted and will sell off hard over the coming weeks.
US FLAT STILL ON, Maybe
There was no conclusive break below ending diagonal wave 3 to signal the new impulse has started. I see weakness in the rally off the morning lows as the rest of the day was a choppy advance. Flat not over until wave 3 is broken.
US Flat Over.
The stalled Big 3 deal is too fundamental of a change for higher markets in the near future.
The wave 5 of the ending diagonal must have truncated. A market collapsing Wave 3-3-3... has begun.
US Markets FLAT
There had been no violation of the overall count of the flat whic started in late October 2008. The change in count at the smaller degrees is debatable.
Did an ending diagonal wave 4 have a triangle followed by a truncated wave 5, or is the afternoon selloff part of ending diagonal eave 4 zigzag. The fact the SPX futures are down 14 points overnight does not eliminate one count or another; however, it starts to favor a triangle followed by a truncated wave 5.
US Flat Continues
Wave c-4
One more little pullback of 0.5 to 1% and then a rally of 4-5% Next week is looking dangerous.
The rest of the world is still showing a zigzag or 2X zigzag, both with a triangle in the wave b position.
US Markets in Flat e-wave
When I wrote my comments about symmetrical triangles in global markets, I wondered why the US markets had such a distorted triangle. Well, it's probably not a triangle, but a flat. wave-a was the election rally, wave-b ended at the November lows, and wave-c is presently in progress. wave-c is shaping up to be an ending diagonal, which means the next down leg will start off very sharply. The stochastics are entering overbought levels.
With more time needed to complete wave-c in the US markets, global markets will have enough time to complete the zigzag with wave-b triangle.
For tomorrow: Down a little to choppy trading.Thurday and Friday UP. Next week = ouch!!!
Fundamentally this market can't hold up much longer.
I heard a GM ad on the radio discounting a brand new 2008 vehicle 50%. As these kind of sales go through, the existing privately owned vehichles, many already upside down, will lose equity even faster. Bond investors will react by selling auto loans to reduce risk of incomplete repayment of loan in case of default. Symptomatically, interest rates will spike UP, choking off funds for future auto loans. The FED went to grest lengths to avoid mark-to-market in the financial sector.
Discounting prices to sell anything exhausts a market very quickly. Bargain hunters buy sooner, and wait longer to replace their bargain. Lower vehicle prices and fewer buyers are the last things The Big 3 want as they avoid bankruptcy.
So it looks like the dealers are trying to liquidate ahead of the Big 3.
Symmetric Triangles Across the Globe
German DAX, London FTSE, and Japanese Nikkei.
There is a possibility the symmetrical triangles are b waves in a larger zigzag corrective wave. If the NIKK flirts with 9000 this evening the zigzag pattern plays out. the DAX is in a precarious position because a big move could happen either way at the open.
A zigzag correction would signal a wave 2 followed by a very strong wave 3.
TJWNY "In this age of hyper connectivity"
As an electrical engineer with a graduate degree concentrating in signal processing, a tracking algorithm must be able to sample at a rate at least twice as fast as the signal to be studied. "hyper connectivity" will create situations where the system moves too fast for tracking algorithms to work. This can be most destructive to a portfolio in such a whipsaw environment.
Still consolidating. Triangle or Ending Diagonal
From Tuesday's lows I count 5 zigzags where the end of the first and beginning of the last waves overlap. The middle zigzag is not the smallest of the advancing zigzags.
The ABX mortgage bond index continued to sell off despite the 5%+ gain in the INDU this week so far.
Global equity markets are ready for the multiple gap down days to happen.
Less confusion about e-wave count.
I was confused after Monday's huge decline. It looked like a zigzag. After reviewing a few more stocks and markets it dawned on me the opening gap placed the count in the middle of wave 3. Through midday the consolidation was wave 4. The closing was wave 5. Today definitely looks like a wave 2 consolidation of a larger degree.
The forecast for tomorrow is down hard, retesting lows.
And the ABX mortgage index fell hard despite the larger market rally, a divergence. Follow the ABX index.
Friday's e-wave pattern.
The German Dax met my expectations on Thursday and Friday as far as the ending diagonal e-wave pattern.
I am, once again, finding it difficult to count e-waves in the US markets. The INDU has declining volume on rising index values, which happens in bear market corrections. The VIX looks like it is done consolidating, signalling the market will head lower in the near term.
I've caught the e-wave
THe markets did consolidate today (wave 2 of c of wave 2 flat), but only for the first half. The rest of the day was rally mode wave 3 of c of wave 2 flat). This is shaping up to be an ending diagonal. This implies friday will head down through the opening followed by one last rally, most likely into the close.
This ties together nicely with store traffic numbers which will come out AFTER the markets close on Friday and before monday. We will have a black friday or black monday, but not both.
Consolidtion Today.
This may be wave 2c of the proposed flat which began in late October '08. I'm thinking this rally ends early next week as retailer issue Black Friday reports. (Rally on hopes, Sell the News!!!)