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Short LEND, If You Can!!!
I placed an order to short LEND this week. The order did not go through because no shares were available to short. That's too bad because the bounce off the $5 area completed an e-wave zigzag and the highs around March 23 have been followed by stairsteps lower. Bounces have been very shallow, reflecting a very strong downward trend. This week should be ugly for shares of subprime mortgage lenders. THe contagion will spread to the GS, JPM, C, MER, LEH, and HSBC.
http://clearstation.etrade.com/cgi-bin/intra?Symbol=lend&cs=&ci=None>yp=Default&gs...
Here comes Asian Contageon:
the Nikkei is stairstepping lower and is about to fall faster as a wave 3 of 3 of 3 unfolds. The Nikkei selloff is more textboook than the US markets.
http://finance.yahoo.com/q/bc?s=%5EN225&t=5d&l=on&z=m&q=l&c=
The Shanghai Composite has recovered from its 9% crash a month ago. The canary in the coalmine is the ending diagonal which started on March 19th. The Stochastics show an overbought level. RSI is getting close to overbought levels. The MACD
http://stockcharts.com/h-sc/ui?s=$SSEC&p=D&yr=0&mn=3&dy=0&id=p10909322839
Tetres: Great Article.
There is another landmine waiting in the housing market bust: estate settlements of baby boomers who have passed away. Their heirs are most likely one of the 69% of American home owners; so there is no need to hold onto a spare house as a tax liability. Estate sales will add to the glut in the housing market. The upside to the estate sales is these houses are more likely to have no liens against them. They will be safer and less cumbersome to purchase.
SPX E-waves: Bear = Bull
Bear count: Wave 2 flat is in wave c5. Fib price retracement around 78% for SPX the last 2-3 trading sessions. Fib time ratio is Wave 2 to Wave 1 = 2 days to 1 day. Tomorrow would make a perfect fib turn date and e-wave completion. Crash alert as Wave 3 takes hold.
Neutral count: Wave 5 is nearly complete and truncating. A sharp drop of 3-4% before finding support for a week.
Bear Count: wave 1 of Wave 5 is nearly complete. Take some trading profits or let it ride for wave 5 of 5!!!
Rally Stalled at 12:30 Today.
Mini head and shoulders patterns on the intraday charts using 1 minute bars. Since then its been 5 waves down and 3 wave up 2 times. This could be a double zigzag or a 1-2-1-2 waterfall forming. Some charts show the DJIA as having its top occurring later in the afternoon, but the wave count wouldn't make sense.
I missed the Fib ratios within Wave 2 flat that Buy_The_Dips points out. The fibonacci time ratio of Wave 1 to Wave 2 is now 0.65 for the SPX. The price and time fib ratios are pretty much painted into corner. Major moves are well organized technically since the underlying stages of mood are synchronous.
Markets at Fibonacci Points AGAIN!!!
It's just amazing how the markets were setting up for a top at lower fibonacci level and then shot to higher ones with FEDspeak. Elliott Waves indicate there are a few points to be had at tomorrow's opening before a pullback or resumption of the larger bear market.
Fibonacci Convergence on SPX
Wave 1 to Wave 2 time ratio is near 78%
Wave 2 has retraced nearly 50% of Wave 1
Wave 2c flat is probably going into a 2c4 triangle tomorrow with a sudden wave 2c5 spike to 1415.50 before Wave 3 begins.
The US, European, amd other Asian markets are not confirming the Hang Seng retest of 52 week highs. The rest of the world has gone bearish. The Thailand SETI is set up for a sudden drop.
E-wave Recount
The NDX closed higher today than the start of last weeks selloff. The SPX and INDU have not. My prefered bear count is back to a higher degree wave 2 flat. little wave 5 of 2-c should happen quickly at tomorrow's opening and sells off hard through the day.
McClellan Oscillators:
There is an inherent flaw with the McClellen Oscillator. It is the same flaw as Bollinger bands, MACD, Stochastics, and many other popular TA indicators. They all tend to use arbitrary, fixed time periods instead of ones which match Hurst's cycles. Cycle periods will vary. This is why these other TA approaches will tend to be less reliable than Hurst cycles and Elliott Wave approaches.
Once a hurst cycle has been determined, however, these TA tools start to have more value in confirming cycle lows and wave counts.
Nikkei, SSEC, HSI E-waves
All three of these asian indexes are showing a zigzag lasting 2-3 days. Monday is set up for some heavy selling into wave 1 of 3 of 3.
The US market is not quite half way through it's zigzag bounce. The US market should head lower at the opening and climb into the close, maybe even a little higher.
GOOG Stairstepping Lower
For the last 2 months GOOG has been stairstepping lower. eventually the elliot waves will reach 3 of 3 of 3 of 3.., and gap down dramatically.
http://stockcharts.com/h-sc/ui?s=goog&p=D&yr=0&mn=6&dy=0&id=p75635173805
SPX Intraday 50% bounce
The rally off today's lows retraced 50% of the last 2-3 day's decline. Late afternoon trading was a choppy advance. The zag looks like an ending diagonal with wave 5 to complete at tomorrows opening. This is going to get really ugly, fast.
http://clearstation.etrade.com/cgi-bin/intra?Symbol=_INX&cs=&ci=None>yp=Default&gs...
Major crash in the making.
Elliott Wave International has a free wave count for the Dow Industrials. A wave 3 that should drop the Dow at least 10% is starting. You don't need to be a subscriber to access this page.
http://www.elliottwave.com/features/default.aspx?cat=emw*aid=2941*time=pm
Breaking the Bank
The bank index is leading the way down. It is clearly lower than the computer glitch drop two weeks ago, and nobody was blaming the computers today. The blame was squarely placed on the subprime mortgage timebomb exploding. The ripple effect is working its way to the largest financial institutions in the world. This is only the beginning of the subprime crash, and the press is wild with stories. This tells me there is much more downside left. People realize that without the ability to borrow, the economy will slow suddenly.
http://stockcharts.com/h-sc/ui?s=$bkx&p=D&yr=0&mn=6&dy=0&id=p98331346671
RLOHMeyer: SPX- Me Too.
1417 is a fib target. Tomorrow the 2/3 fibonacci time ratio happens. Both are convering fast.
I still can't tell if the e-wave count is a single zigzag with the zag and ending diagonal, or a double zigzag. There has been some choppiness the last 2 days.
The subprimes and banks are looking horrible. They could gap down 5% next week.
Shanghai- 66% retracement.
The opening this evening was up a couple points above the 66% retracement in a choppy fashion. Then the selling began and so far is in the red. It's good enough to call a top. The 2100 target is now my favorite.
Shanghai: Technically Perfect
Today the Chinese Shanghai index closed at its fibonacci 61.8% retracement of its "crash" last week. The smaller details of the wave count showed a little wave 4 triangle and complete wave 5 to signal the end of the 3 day rally. The relief rally was a wave 2 flat. The downside targets for wave 3 are 2295 and 2099 based on fibonacci ratios to wave 1 of 200% and 261.8%, respectively. The rest of the world won't sit idly as its manufacturing engine sheds over 20% over a week or two.
Frank: SP500 Wave Count:
The flat was my primary count. I switched to a double zigzag since it looked like a cleaner count. Either way you look at, todays high is right at the the fibonacci 50% retracement. A flat would imply wave 3 fibonacci targets of 1233 (200% of wave 1) or 1179 (2618% of wave 1). Lower targets are possible if fear is stronger.
SPX Fibonacci
The came very close (1401) to tagging the 1/3 retracement of 1403. The wave count looks like a compressed or rushed double zigzag. With the Shanghai composite a few points away from a high probable turning point, the SPX wave 2 may have completed today.
Shanghai Market
The SSEC rally is between the 50% and 61.8% fibonacci retracements. The next upside target is the 61.8% retracement at 2928. This should happen during the next trading day.
The World has Been Shanghai'd: E-waves
The $SSEC plunge last week and the opening of the following day were wave 1. Since then a wave 2 flat has formed. The rally off this Tuesday's low and Wednseday opening look very motive as a wave 2c would. The 50% fibonacci target is 2891, only a few more points away.
Flats generally are at one end of the longest wave in a motive wave. Since wave 2 is turning into a flat, wave 3 should be more than the 162% of wave 1. more like 200% or 262%, or worse. There may be multiple wave extensions within wave 3. This would lead to a "waterfall" pattern of waves 1-2-1-2-1-2-1-2 until waves 3-3-3-3-3 gaps 10% down. So a 15% - 20% downside from these levels is realistic over the next 2 weeks.
THIS LOOKS LIKE IT WILL BE A RUNAWAY MARKET!!!
Sweet dreams, Bliss.
99% Down at the Top
The advance decline charts set 3 year records in the Naz, and Amex during last week's drop. I found myself saying, "WOW!" aloud. The NYSE a/d line was not far from a 3 year record.
http://stockcharts.com/h-sc/ui?s=$AMAD&p=D&yr=3&mn=0&dy=0&id=p75462053009
http://stockcharts.com/h-sc/ui?s=$nAAD&p=D&yr=3&mn=0&dy=0&id=p75462053009
Many Waves to Count SPX
The SPX made another 10 day low at yesterday's close / this morning's opening. The INDU did not. Monday March 5 was the beginning of a wave 2 flat in the SPX. The 38.2% fibonacci target for SPX is around 1410, an easy 10 point rally. This would be wave 2c5. If this morning was the technical low, then look for more choppiness higher as the market consolidates for the next move lower.
http://charts.barchart.com/chart.asp?sym=$INX&data=Z15&date=051406&den=HIGH&divd=Y&a...
http://charts.barchart.com/chart.asp?sym=$INdu&data=Z15&date=051406&den=HIGH&divd=Y&...
Weakness in Brokerages
Brokerages may be more broke than we think.
If Merril Lynch, Goldman Sachs, and Morgan Stanley are in as bad shape as this article claims, then the complete US financial system will be obliterated from the inside within weeks.
http://www.safehaven.com/article-7045.htm
DJIA Wave 2 bounce
This morning wave 5 started and finished at the open, a nice bear trap. The rest of the day was choppy. Wave 2-a started and may have finished. The uncertainty is Wave 2 couldbe a simple zigzag, double zigzag, or complex consolidation.
The Industrials 1st target (fibonacci ratio of 38.2%) is the 12310 area. Today was not close enough so tomorrow should start down and then rally. There are other targets 12407 (50%) nad 12500 (61.8%); not to mention the gap that may get closed. So far the bounce has been one day. It needs more time to consolidate and lure investors onto the thin ice.
THe "COmputer Glitch" created only a very minor distortion to the wave pattern. wave 4 flat near the low end of the glitch spent a balanced proportion of time completing. wave 5 did not truncate
http://clearstation.etrade.com/cgi-bin/intra?Symbol=_INDU&cs=&ci=None>yp=Default&g...
HSI target 18750
This is the area the Wave 5 ending diagonal began. It should take less than a month to reach this target. Fergit what I sed in the last posting. There is still a lot of downside in the HSI.
http://stockcharts.com/h-sc/ui?s=$hsi&p=D&yr=0&mn=6&dy=0&id=p75635173805
The Carnage Continues
The Shanghai Market dropped another 2.75% the day after the 9% drop. I would still wait for a bounce before shorting any stocks as the day or so will have limited downside, and will be followed by a relief rally.
1987 Crash was a FLAT wave.
Waves A and B on that chart are zigzags.
Wave C was a 5 wave impulse.
That is how Prechter has it labeled, and the chart shows good detail for me to agree with him.
SOHU
The move from the $40 are to the $15 is a fibonacci retracement of 2/3 and a choppy wave count, so this was WAVE A of the bear market.
WAVE B can be counted as triangle with wave e also a triangle. WAVE C has started and is testing WAVE B's lower trendline. As with BIDU, expect a small bounce off this trendline befor a clean break below is made.
http://stockcharts.com/h-sc/ui?s=SOHU&p=D&yr=3&mn=0&dy=0&id=p38558556076
BIDU - Baidu China Play
I took a longer look at Baidu's chart.
The Bearish count:
The IPO was a spike to a WAVE 5.
The dramatic drop of 50% looks like a double zigzag WAVE A.
The rally off the $45 low is a zigzag WAVE B.
So far WAVE C is off to a good start judging by the clean wave count. There is support by the lower trend line. I think a smaller wave 2 bounce will fool those anticipating broken support.
The BULLISH count:
The IPO hi to $45 low was a WAVE 4 correction
Ther rally off the $45 low is WAVE 5 which will challenge the all time highs.
http://stockcharts.com/h-sc/ui?s=BIDU&p=D&yr=2&mn=6&dy=0&id=p86674070548
Shorting Chinese Stocks???
There is too little data to determine if any of these Chinese stocks could be shorted the next few days. I do see a setup for a nice 20% pop in SINA. From the highs in 2004 to the lows in 2006 SINA formed a textbook triangle. This triangle looks like it is part of a 6 year zigzag. The zag is about half done and should break the highs where the triangle started. The price should shoot up very quickly since it is in the middle of a wave 3 of 3. Maybe a gap up one of these days.
Here is a link to some chinese companies traded in the US.
http://china.seekingalpha.com/article/11645
China Shanghai Index ready to CRASH!!!
The e-waves count from the June 2005 lows shows a nearly complete 5 wave sequence.
WAVE 1 June 2005
WAVE 2 June 2005 to July 2005
WAVE 3 July 2005 to January 2007. Wave 5 of this extended/spiked.
WAVE 4 January 2007 to February 2007
WAVE 5 February 2007 to present. Small wave 4 finishing or small wave 5 starting. Top in 1 to 2 weeks, closer to 1.
Long term
http://stockcharts.com/h-sc/ui?s=$SSEC&p=D&yr=1&mn=10&dy=0&id=p13928863978
Short term
http://stockcharts.com/h-sc/ui?s=$SSEC&p=D&yr=0&mn=6&dy=0&id=p75827215621
A full length article.
http://www.safehaven.com/article-6945.htm
Bombay Stock Exchange e-Wave
The ending diagonal wave pattern in the BSE is textbook. Wave E-zag is about to start. Another 7 to 10 trading days and the top should be in.
http://stockcharts.com/h-sc/ui?s=$bse&p=D&yr=0&mn=6&dy=0&id=p98331346671
Jobless Chart
It looks like the chart of Initial Jobless Claims took a year to bottom. Now things are starting to increase again.
http://www.bullandbearwise.com/InitialJoblessChart.asp
Nikkei E-Wave
It looks like an ending diagonal that started from the November '06 lows is in wave 5. There may only be a week or two to left before a sudden drop to the 16000 level takes place.
This flight to YEN could increase the value of the Yen to the point where a Yen carry trade by US investors could unravel even faster.
http://stockcharts.com/h-sc/ui?s=$NIKK&p=D&yr=0&mn=6&dy=0&id=p33692980750
INDU e-wave
INDU has made a zigzag over the last 3 days, one of the waves for wave 5 of an ending diagonal. This quick rally is typical post triangle action. These conditions raise the probability a near term top is in.
Low in? Most likely
From an e-wave count, the dow industrials finished a triangle yesterday afternoon. The sudden rally today is typical action after a triangle. At least 4 to 5 days until new highs are made. 5 to 7 until a top of some dgree is in..
Airedalle88: Cycles Next Rally
The cycle analysis fits the ending diagonal count in the DJIA and the SP500 that started off the Jan '07 lows. the lows this week would be wave 4 of the ending diagonal. The rally after would be wave 5 of the ending diagonal.
one or two days trading to form a bottom, then a 5 to 7 day rally to test the 52 week highs.
JPM ready to reverse HARD!
From the 2002 lows JPM has formed a zigzag corrective move. Much of 2004 and 2005 was spent forming a wave b triangle. This means the end of 2005 to present is motive wave c, an ending diagonal. The price has a great potential to drop to the $35 area very quickly starting any day now.
TLAB - That should do it.
Friday TLAB reversed hard down 3% aand nearly engulfed the last 2 days that had 3% gains.