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NIKKEI Finishing Correction. SSEC Leads Lower
The Nikkei's bounce off the January '08 lows looks to be a WXY correction. W and Y are double zigzags. X is a zigzag. Looking for confirmation of a new downtrend.
http://stockcharts.com/h-sc/ui?s=$nikk&p=D&yr=0&mn=6&dy=0&id=p75635173805
The Shanghai market (SSEC) closed below the January '08 lows after making a zigzag correction. It's probably in a new multi-week selling wave.
http://stockcharts.com/h-sc/ui?s=$ssec&p=D&yr=0&mn=6&dy=0&id=p75635173805
Short IBM
The near term E-waves show the Oct '07 high to Nov '07 low is motive. Since then a flat corrrection took place. Wave c of the flat is an ending diagonal which completed this week. An ending diagonal signals a sharp revesal is ahead; in this case the price should fall.
http://stockcharts.com/h-sc/ui?s=IBM&p=D&yr=0&mn=6&dy=0&id=p64985090776
The flat comes at the beginning or end of the longest wave of the series, so Wave 3 will drop IBM share prices $40 to $55 using fibonacci ratios to Wave 1. The long term chart shows two lows in the $70-$75 range that form support. One in 2005, and the other in 2006.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=ibm&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=13&freq=2&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=8&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
ABX Mortgage Index Update
12 out of 20 indices made new lows today.
19 out of 20 mortgage indices are trading below 80% face value.
The last 2 indices in the 80% face value range are now in the 70% range.
There is only 1 index trading in the 90% face value range.
Cap'M TNX vs SPX
Those are beautiful charts
Just because the correlation between bond yield and SPX is nearly perfect does not guarantee it will remain so. I think the yield is in the early stages of a massive spike, and SPX will crash. Both attributed to liquidation. On a 10 day chart the TNX yield shows a bunch of stair steps higher. A big Treasury dump is about to take place.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=tnx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
9 of 20 ABX Indices Make New Lows
The general market consolidation is probably over.
The best AAA rated index is still in the 90% face value range, but it is definitely heading lower.
Bond Insurers Plunged.
The opening spike was a great time to short ABK and MBI. They both closed down 15% by the end of the day. Buffet threw a party for them, but they turned out to be rude guests.
The selling pressure should accelerate the rest of the week. Banks and other financials will join in as the subprime loans they hold lose their insurability. Buffet won't touch the corporate paper or mortgages.
INDU, SPX, NDX e-waves
NDX
Wave 1: From Feb 3 open - Feb 6 open
Wave 2: From Feb 6 open - Present Double zigzag, wave b was a triangle. wave c of c completes tomorrow early and sells off very hard the rest of the day.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=ndx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
SPX
Wave 1: From Feb 4 open - Feb 6 open
Wave 2: From Feb 6 open - Present Double zigzag, wave c of c completes tomorrow at opening and sells off very the rest of the day.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=spx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
INDU
Wave 1: From Feb 4 open - Feb 6 open
Wave 2: From Feb 6 open - Present this is a very weak, complex wave. It looks like wave b was a triangle that dipped below wave 1 implying wave c will be motive and Wave 2 is a flat. This doesn't make sense since flats have 3 waves then another 3 wave and finally 5 waves, not 3-5-5. I actually prefer a count of a flat distorted this morning by the drop in AIG's shares.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=indu&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
Bond Insurers Ready to Plunge Again
ABK had a down wave last week. Since then its been a whole lot of lower lows and Lower highs, probably a series of wave 1-2 of many degrees of trend. Many of the wave 2's are flats, which implies a very large wave 3-3-3-3-3... will take place.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=abk&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
MBI is a similar analysis, but needs a little more imagination to count 5 waves down from last weeks top.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=mbi&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
10 Yr US Treasury Yield Spikes
This is definitely a breakout move for the yield. Hardly anybody showed up for the auction. Financial institutes are going to have to unload their bonds to pay for subprime wtitedowns.
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=1&mn=6&dy=0&id=p99665117702
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=tnx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
MER might be one of the companies unloading US Treasuries. Their chart since the November '07 lows shows a flat with an ending diagonal in the wave c position. The price should continue falling quickly.
http://stockcharts.com/h-sc/ui?s=MER&p=D&yr=0&mn=6&dy=0&id=p79998821804
DAX, FTSE, US Market E-waves.
The sharp selloff this week has found some support in the various markets.
In the German DAX, support came today as a wave 2 zigzag or double zigzag. The patter looks complete and it reached a fibonacci retracement of 50%. Downside target is 6140.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=dx%3A1876534&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
The London FTSE wave 2 support came today too. It looks like a flat where wave c is half way done. This means wave 3 will be much stronger than wave 1, a drop of nearly 500 points.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=uk%3A1805550&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
The US markets found very week support in the rally off the opening lows today. The rally stalled before reacing any fibonacci levels. I held out for a wave 2 flat as had developed in the FTSE. The 2 PM hour showed a wave c developing. This wave barely overlapped wave 1 at 3 PM before reversing to the downside. All this tells me the US market has extremely bearish probabilities the downside with a target of 1217 for the SPX.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=spx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
10 Yr Treasuries Still Island Reversal.
The sharp drop in bond yields this was partially retraced by the end of the day. This contrasts with the equity markets which dropped and kept sliding without a significant pullback.
The following chart shows the 10 yr Treasury yield and SP500. Over the last 10 days they have moved in tandem. Today you would expect a flight to quality in US treasuries and gold. The unexpected happened. THEY ALL SOLD OFF. This is a sign of liquidation, and therefore, DEFLATION. The island reversal was a major signal. Now I'm looking for e-wave confirmation. A yield rally above 3.75% would place the odds in favor of a bottom. A strong confirmation would be a clear 5 wave pattern to the upside.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=tnx&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=18&freq=9&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=SP500%7E3377&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=3&optstyle=1013
Hang Seng Completes Island Reversal
Gapped down 5%. This should be part of a larger move taking the index below 15,000.
I originally wrote SSEC and linked the HSI chart, but I really meant HSI.
http://finance.yahoo.com/q/bc?s=%5Ehsi&t=5d&l=off&z=l&q=l&p=&a=&c=
SSEC Island Reversal In Play
The Chinese Shanghai market has is looking to make an island reversal if no new high is made the rest of the trading session.
http://finance.yahoo.com/q/bc?s=%5EHSI&t=5d&l=on&z=l&q=l&c=
XLF Chart is a Beautiful Crash
The recent rally looks like a wave 2 (zigzag) of Wave 3. The 20 week moving average is solid resistance. I put my money where my mouth is on Friday and bought SKF, the Ultrashort tracking ETF for the XLF. A 10% drop at some degree of trend for XLF is very near.
Asian Dead Cat Bounces Are Almost Over
The Nikkei is finishing up wave 2 (double zigzag) of Wave 3.
Intraday chart
http://finance.yahoo.com/q/bc?s=%5En225&t=5d&l=on&z=l&q=l&p=&a=&c=
Daily Chart
http://stockcharts.com/h-sc/ui?s=$NIKK&p=D&yr=0&mn=6&dy=0&id=p75635173805
The Chinese SSEC is finishing up wave 2 (flat) of Wave 3 that started on Jan 29.
Intraday Chart
http://finance.yahoo.com/q/bc?s=%5Essec&t=5d&l=on&z=l&q=l&p=&a=&c=
Daily Chart
http://stockcharts.com/h-sc/ui?s=$ssec&p=D&yr=0&mn=6&dy=0&id=p75635173805
The next major downsize moves for both markets will involve a plunge more than 20%, and have big gaps.
Fast and Furious Friday Opening
The futures in the INDU were up nearly 170 points, and the SPX futures were up over 18 points. The big surprise was the markets opened with no gap, and the actually slipped into neagative territory. That tells me investors are extremely sensive
Whipsawwed Market.
The sudden support after the opening made me reconsider my wave conut for the INDU. I counted 3 zigzags, so I figured the morning selloff would continue the rest of the day. When I got the feeling the selloff stalled, the best count I cound come up with was a wave b flat. So I sold my TWM and SKF for a profit and went long DDM thinking wave c will be big enough to trade a small portion of it and wait for the top to buy back SKF at a lower price.
The canary in the coalmine for the financial sector is MER. From the Nov '07 lows to this weeks hi, it traced out a flat. wave c of th eflat is and ending diagonal. There may still be one more push higher tomorrow.
http://stockcharts.com/h-sc/ui?s=MER&p=D&yr=0&mn=6&dy=0&id=p75635173805
SKF Bottoms
This is the UltraShort ETF for the finance sector.
1.) Volume decreased as the selling over the last week slowed down. Then look at the explosion in volume at the end of the downtrend on an up day!
2.) The candlestick shows a hammer, a classic bottom formation.
3.) Nice bounce off the lower Bollinger Band.
4.) The stochastics are in oversold territory.
5.) MACD stopped diverging, waiting for a crossover confirmation in a fast market will mean missed opportunities
6.) This thing is going parabolic.
I'm glad I got some shares during the second post Fed thrust.
http://stockcharts.com/h-sc/ui?s=SKF&p=D&yr=0&mn=6&dy=0&id=p75635173805
Willie - Wave Count Rule
Wave 3 is never the shortest wave in the direction of larger trend.
On your weekly chart, BLue Wave 3 from July '06 to Oct '07 has smaller degree wave 3 as the smallest of the motive waves. This is a violation of e-wave rules.
Try a new wave count. The rally off the dotcom bottom has to be corrective since the WAVE A, 2000 high to 2003 lows, was motive, not a single or double zigzag. Corrective waves are very tough to count. I used the German DAX as a proxiy for the longer term wave since the ending diagonal in the last part of 2007 had the highest probability. Since the western markets are highly synchronized, the US markets couldn't be too far ahead or behind.
NDX Relatively Weak Against RUT, SPX and INDU.
The NDX has rallied less than half of its pullback from the Microsoft earnings. The other martkets have nearly recovered from that pullback.
I've got a double zigzag wave count for the rally off last week's lows in all the markets. The zag (a little zigzag) started this Monday in early morning trading. Late Monday into Tuesday was a triangle. This signals one more little zigzag. This final little zigzag started Tuesday afternoon. Ther is a very good chance the NDX will truncate and lead the markets lower tomorrow.
Tomorrow's opening should put the final touches on the bear market rally. The market heads lower before the FED makes an announcement, and plunges after.
Chuck - NDX e-waves
This morning with the NDX futures at -18 I thought this would be a bloodbath. The opening was more like a slow leak, while the European markets were slowly moving UP, so I sold my QID for a couple percent gain. Friday's open into today's open was a zigzag.
Since last Wednesday into Friday was a double zigzag, the e-waves are giving a buy signal with targets above Friday's opening. Unfortunately I won't be in front of a computer to play QLD the next couple of days, buy by the time I am able to trade will be time to get back into QID. I'm looking for a double zigzag from this morning's low as my cue to take action.
On the longer time frame, this rally needs to take more time to balance the longer duration selloff. Looking for fib targets of 50% and 62%.
Treasury Island Reversal
The 10 year US Treasury...
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=6&dy=0&id=p75635173805
and the 30 year US Tresury...
http://stockcharts.com/h-sc/ui?s=$Tyx&p=D&yr=0&mn=6&dy=0&id=p75635173805
yields have made island reversals. They both gapped down one day and then gapped up the next. These were no little gaps either, indicating a decided change of investor mood. Yields should move sharply to double digit territory as expectations of a FED bailout mounts. The thing is, since the FED FOLLOWS the market, it will now have to start RAISING rates, and won't be able to afford a bailout.
Chuck's Wave Count - Triangle
I see a triangle too. Is it wave 4 or wave b of a correction. I say wave b. The underlying fundamentals are financial institutions are selling their winners because they cant get a bid for their losers.
I never thought a wipe-out across the risk spectrum would occur in reverse.
E-Nasdaq Mini March Contract Oddity.
When I looked at the e-mini contract it shows a much stronger rally for the day than the underlying NDX. What the e-mini's show is a clear zigzag correction with a nearly complete zag. The MSFT earnings news should put in the final rally in the futures overnight. I'm forecasting a pop and drop at tomorrow's opening.
E-Minis Chart
http://charts.barchart.com/chart.asp?sym=NQH8&data=Z15&date=012408&den=HIGH&divd=n&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
NDX Chart
http://charts.barchart.com/chart.asp?sym=$IUXX&data=Z15&date=012408&den=HIGH&divd=n&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
Asian Markets Yawn At US Rally
Asian markets didn't pop on the strong afternoon rally in the US markets. Instead the Asian markets look like they are completing or have completed their zigzag consolidations from the last 2 days.
The AORD looks to be making a Wave 4 triangle on the intraday chart. It should finish tonight. A capitulation move to the downside the rest of the week and then a 2-3 week consolidation starting on Monday.
Those are the setups Im looking for. I'll buy QID, DXD, TWM, or SDS at the open in the morning. Next Week I'll might entertain the idea of going long.
Closed TWM for profit around lunch.
I thought the market was going to continue sliding much farther. When it didn't and the sideways choppiness pushed outside the selloff channel, I closed my position for a nice profit.
Having a healthy respect for a bear market, I did not try to catch the rally. I'll wait patiently for the next high probibility setup.
Bernanke Makes a Zigzag
All markets made some some sort of a zigzag bear market rally today.
In the US
SPX and INDU made zigzags. wave b was a triangle, signalling only one more advance was left in the pattern. The zag in the SPX was an ending diagonal.
NDX was double zigzag.
The RUT was a double zigzag. The zag truncated.
All zags were shorter moves than the zigs.
Futures are down this evening.
Today may only be wave a of one higher degree.
In europe
The DAX and FTSE zigzags had flats in the wave b position.
In Asia
Nikkei looks like a zigzag, the zag could be truncating. The market is closed for lunch.
The SSEC looks like a single or double zigzag. The pattern should be obvious by the end of the trading session.
The HangSeng is a tough call because it gapped up near the fib level of 38% of the Friday - Tuesday selloff.
Willie, Throw Out The Microscope.
This is a runaway market that will throw off the wave count. Gaps at the open of a trading session are motive, but it's difficult to tell which degree ended. Wave 3 will extend several times. What looks like an ending diagonal is really a bunch of waves 1-2 at several degrees setting up for a great shorting opportunity. The daily chart will give you more time to react. Look for congestion to signal consolidations. Gaps and narrow trading bands on long price declines signal wave 3's. This selloff has several more days to go before the daily chart looks like a completed motive wave.
Nikkei - Another 4% Plunge
Yesterday's 4% plunge was followed by another tonight. The Nikkei is in a wave 3-3-3-3-3... situation and should continue to gap lower and sell off the rest of the week. No major bear market rallies for a month. When it does, it will be at least 20%.
The Solvency Crash
Banks may have borrowed more than they needed from central banks over the last 6 months. Knowing the credit markets were coming to an abrupt halt they probably went the most liquid market (equities) they could find and shorted it with borrowed funds.
The FED is trying to "calm the markets" through an open mouth policy and interest rate cuts. Unaware investors would buy the market or buy treasuries. Both actions help banks significantly in selling their treasuries and shorting stocks. When the FED doesn't really do anything, the financial media catches on and effectively yells "fire" in a crowded theater, further helping the banks short positions. The US Gov't doesn't have to bail anyone out since the FEDS and banks engineered the markets to do that for them. The banks will cover shorts when they have enough profits to cover subprime mortgage losses.
That's why the helicopters are still grounded.
DAX, Longterm Support Broken
From an e-wave view, the DAX should have found support around August '07 lows / 7200 because that was the beginning of the ending diagonal. The bear market is much stronger than I was anticipating at this stage in the selloff. The e-wave count from the highs in '00 has the DAX in a flat correction. The fibonacci ratio for WAVE A to WAVE B is 3 years / 5 years. WAVE C just started and should trace out an impulse wave (5 segments). My target is below 2000. This about where the dotcom bubble began in the 1990's.
Other technical approaches are just as unpleasant. The DAX broke the 5 yesr trendline from the lows in '03 to underside of the recent ending diagonal. It plunged through the 200 DMA without any sort of a retest. The 50 DMA is about to fall below the 200 DMA. The DAX will have made a double top, one in the year 2000 and this one in 2008.
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=1&mn=0&dy=0&id=p36252628878
JNJ Multi Year Ending Diagonal Complete.
JNJ is showing a high probability shorting opportunity: A finished multi year ending diagonal that truncated.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=jnj&time=&freq=
Wave 1 = 2000 Low to 2002 High
Wave 2 = 2002 High to 2002 Low
Wave 3 = 2002 Low to 2005 High
Wave 4 = Triangle from 2005 High to the 2007 low.
Wave 5 = Most likely completed,and truncated.
The downside target is around $34, a 50% plunge. This is based on the price where Wave 5 began. This should happen quickly because of typical behavior following truncations and ending diagonals.
No Relief for Nikkei
http://finance.yahoo.com/q/bc?s=%5EN225&t=5d&l=on&z=l&q=l&c=
The Nikkei plunged 400 points at Friday's opening and then rallied 500 points. This evening the Nikkei plunged 400 points at the opening. The wave count is 3 of 3 of 3 since the Oct '07 highs. This is a crash situation.
Incredible Downside Volume.
The volume this week is relatively high for all stock markets. Over the last 4 months the average volume has increased as index values topped. This is typical behavior at a market top.
VIX Broke Upper Triangle Resistance.
The chances are now greater the VIX is going much higher, srocks much lower.
12 of 20 ABX Indices Make New Lows.
The surprise today is the best AAA index didn't budge; however, another AAA index made a new low, erasing all gains of the last bounce. It would be interesting to know why, but there is enough information to know these indices are in a strong sell mode. The equity markets are joining in the selling. This is going to be a big crash.
Asian Markets Plunge With US Markets
The Hang Seng opening has given up nearly all of yesterday's 2% rally. The Nikkei gave up all of yesterday's rally with a 3% plunge.
Thanks to globalization, the world finance markets are synchronized to the point they are all falling.
10 of 20 ABX Mortgage Indices Made New Lows
The surprise was the highest priced one hardly budged. It's still 94c on the dollar.
stkboy1 - VIX chart
Yes, it looks like a triangle so far.
Assuming it is a triangle, then there should be a rally the next couple of days to complete wave e. Then a massive market selloff to start Wave C (zigzag) in the VIX.
I don't prefer that count. It's to optimistic for the markets at these high levels. A more bearish count is the VIX consolidated from the Aug -07 high to Dec'07 low with a zigzag. The zag was an ending diagonal and in truncated, both forecast a sharp advance, which is what we are experiencing. I see a possible Wave 3 of 3 about to unfold. This is all part of the zig of a much larger zigzag correction pattern for the VIX.
German DAX in Bear Market.
From the August 2007 lows the DAX traced out and ending diagonal. Wave 5 of the diagonal truncated, and the ending diagonal truncated. These 3 counditions forecast a crash back to the August lows. This is pretty much what is happening as 2 weeks of trading have erased more than 60% of 5 months of advances. This has been the clearest wave count of the western markets. It looks to be the last one to make a technical top.
http://stockcharts.com/h-sc/ui?s=$dax&p=D&yr=0&mn=6&dy=0&id=p75635173805