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India Market Crash
The Bombay Stock Exchange crashed 10% at one point yesterday and finished 5% down. Over the last 2 weeks the BSE has been down at least 25%. THis is not a good sign from an economic zone that has been thriving for the last 10 years. It does not bode well for the US because US companies outsource a great deal of high tech development and call center services to India.
http://stockcharts.com/h-sc/ui?s=$BSE&p=D&yr=0&mn=3&dy=0&id=p81947153502
On a lighter note, The Japanese NIKKEI down 10% in 2 months. Single day downward thrusts are strenghtening.
http://stockcharts.com/h-sc/ui?s=$nikk&p=D&yr=0&mn=6&dy=0&id=p98331346671
Aire: cycles.
That's agreat forecast, but I am more interested in finding out if the forecasts of those using cycle analysis are more accurate now that the market has transitioned from a choppy advance to a decisive move to the downside.
Cycles question
I'm finding my accuracy of counting e-waves has improved greatly during this sell off. Has the accuracy of forecasting cycles improved?
Organized movements tend to match the textbook cases of technical analysis, so naturally one should have a better ability to call the market correctly.
BBbands FTSE and DAX
The FTSE had 6 consecutive days outside the lower bollinger band.
The Dax had 4, and just missed 5 by about 2 points.
The global markets are due for a bounce. I hope they take at least a week to consolidat so I can send more $ to my trading account for the next shorting opty.
TLT was oversold
I've been having difficulties counting the long term elliott waves in bonds. TLT is near the end of an extended motive wave selloff, and it was due for a bounce.
MR_Cash: B-Bands
If b-bands work best for long trends, then wouldn't that translate into being useful between the end of an elliott wave 2 and wave 5?
I like your suggestion that b-bands should use the time settings as cycles.
McHugh Calls Top
Here is the link to McHugh's wave count on the NDX. It's good read.
http://www.financialsense.com/fsu/editorials/mchugh/2006/0518.html
BKX crash next?
Lehman bro's (LEH) has sold off agressively. That can't be good for bond markets since LEH is a major player. Declining bond offers would be a deflationary sign.
You can tell I want to buy a house, but when the decimal place moves one digit to the left.
NDX: Leave It To Chance
I'm in awe of the NDX spending 6 days below the lower 20 day bollinger band. Each band is 2 Sigma from the average. The band represents a statistical probability where a stock or index will be. Bands separated by 2 Sigma will contain the price 95.5% of the time. That leave a 4.5% chance the price will trade outside the bands on a given day.
What are the odds of a coin toss being heads 6 times in a row?
it's 50%*50%*50%*50%*50%*50%= 1/64
10 times = 1 out of 1024
Using the probability distribution of Bollinger bands, the odds of the price trading outside the bands 6 times in a row is
4.5% * 4.5% * 4.5% * 4.5% * 4.5% * 4.5% = 8 out of 1 Billion chances.
Your chance of winning a state lottery 6 of 48 numbers is 5 out of 1 Billion.
The market is sending the message this is a very powerful trend change.
NDX Bollinger Bands Update
NDX has now spent 5 days below the lower bollinger band. This is all the confirmation I need for a market top. Market technicians can't ignore this indicator.
DAX Cracks
The ending diagonal top has been confirmed. The DAX close below the beginning of the ED wave 2. TThe DAX should see some support as fibonacci ratios are approached. The intraday chart says otherwise.
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=0&mn=4&dy=0&id=p55368389769
On the intraday scope:
Last Thursday high to Monday low = wave 1
Monday low to Tuesday/Wednesday high = wave 2
NOW in wave 3
The wave 2 retracement is extremely disturbing because it didn't even retrace a fibonacci 38.2%. The DAX closed to day in a nearly vertical drop. It looks like the DAX gaps down lower tomorrow. If wave 4 doesn't happen fast, this could be a runaway market. Counting waves will be very difficult.
http://mwprices.ft.com/custom/ft-com/interactivecharting.asp?pageNum=&company=NEW&industry=&...
NDX Bollinger Bands
OUCH!!! NDX has now spent 4 consecutive days below the lower bollinger band. The waves look nearly done. Stochastics are in oversold conditions. Downside momentume has slowed. Expect consolidation the rest of this week.
MSFT spent 5 days below the lower bollinger band. It has spent the last two weeks moving slightly lower in a little wave 5. The rest of the market is nearly done catching up.
It might be a good isea to cover and wait for the consolidation to take place before establishing new short positions.
http://stockcharts.com/h-sc/ui?s=$NDX&p=D&yr=0&mn=6&dy=0&id=p98331346671
Global Markets and Bollinger Bands.
There is definitely some strength behind this latest sell off. Many of the major global markets have broken below their lower bollinger bands and closed a couple days there. 1 day outside the bands is normal. 2 days is OK as long as the price is trying to get back into the bands. But 3 days should make an investor worry.
GOOG: Small wave 2
GOOG slowed its latest selloff today. There should be a couple days of consolidation as the orice tries to tag the 50 day moving average. This is also the area of the last gap. Since GOOG will be starting Wave 3 of 3 of 3 in a couple of days. establishing a short position will be more important than timing the entry. This is going to be a shock drop to the market.
http://stockcharts.com/h-sc/ui?s=GOOG&p=D&yr=0&mn=5&dy=0&id=p78142403690
Agilent shed 65c AH, eom.
MSFT and INTC lead WAVE C
MSFT and INTC have both completed their WAVE B of the DotCom bubble Pop. They've started WAVE C. Their shear size and impact on the global economy makes their charts worth watching. Where they go, so goes the world.
MSFT WAVE A was a motive wave and forms both time and price fibonacci ratios with WAVE B, a triangle. Expect WAVE C to be motive and take less than a year to complete. The price target is in the $8 area. The 11% selloff 2 weeks ago when MSFT reported earnings is technically significant for those not using e-waves or hurst cycles technical analysis. The price broke the triangle's lower edge on record volume, and there was follow through as the price consolidated and eventually made a new 52 week low after the selloff.
INTC's WAVE A was a zigzag and forms both time and price fibonacci ratios with WAVE B, a triangle. Expect WAVE C to be a zigzag. INTC has not decisively broken the lower edge of the triangle. Zig gets support in the mid teen$. The price target for the zag is the $5 area.
The NDX is lagging the MSFT wave count. This presents an excellent opportunity to short other tech stocks which are starting WAVE C of the DotCom Bubble pop, and have not yet broken below the lower edge of their triangles. Likely candidates are those that are about to report earnings.
Since a zigzag or double zigzag is forming, I'm going to go out on a limb and predict a DEFLATIONARY depression. The cancellation of the M3 report can be viewed as a psychological tool to get other countries to devalue their currencies in an effort to keep their exports competitive. Since the US gov't is lending digital dollar$ and not printed ones, the physical circulated currency will not face the same fate as the virtual currency. I would be more likely to agree with an INFLATIONARY depression if the DotCom Bubble correction were a flat.
TL_Trader: Support Lines
I'm drawing the support lines more like MetalFillBoy did, using the lower portion of the candlestick body. The absolute lows used to form the trend line looked like they also worked, but it depends on chart quality too. The NDX is so close to breaking support that it will become a self fullfilling prophesy.
I can't wait for MSFT to reach the single digits so I can back the truck up.
NDX Broke LT Support
The suuport line drawn from the Oct '02 low, and connecting several of the lows the past year has been broken. This is what happened to MSFT 2 weeks ago. When I posted MSFT broke support I said MSFT is a model for the rest of the market, and the market had some catching up to do. Since then DELL and CSCO choked. GOOG is ready to all out crash. The NDX price pattern is calling for more disappointing reports over the next 1 year.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=ndx&time=&freq=
SHORT FRE
Today's rally is still within the ending diagonal wave count. The price penetrated the upper bollinger band and retreated. The 50 day moving average also generated overhead resistance. Any upward movement will be choppy. The downside is a a crash.
DELL CHOKED
After hours are down 6%. Since it is ain a series of wave 3-3-3, there is a LOT MORE downside potential over a very short period of time.
Soft Landing Reason
The reporter doesn't get it. The actual number one reason the defaults have occurred is that both the borrowers and lenders took too much risk with the mortgage.
RE: OUTLOOK
Chubbie, another game corporate america is playing is the asset sell game. They are spinning off divisions to generate profits on. For some reason investors ignore one time charges, but remember asset sales positively quarter over quarter.
Hog: Hindenberg
Do you kow if a Hindenberg omen happened on Friday. Everything seamed to be up on good volume.
FRE TOPPED. GO SHORT!!!
FRE price came within ONE penny of my projection (Click on the msg I responded to). The wave count to the top now looks complete. The wave count after the top presently favors the bears.
FRE SHORT
GET READY FOR A GREAT SHORT CHANCE.
From the end of Feb '06 high to mid April '06 low was a motive sell off wave. Since then a zig-zag correction has developed. The Zag is turning out to be an ending diagonal. There is still wave e of the ending diagonal to take place. wave e target is around $62.50, a 61.8% fibonacci retracement, over the next 2 trading days.
http://stockcharts.com/h-sc/ui?s=FRE&p=D&yr=0&mn=3&dy=0&id=p06493323329
See hourly chart for zoom in
http://charts.barchart.com/chart.asp?sym=fre&data=Z60&date=050406&den=HIGH&divd=Y&am....
Stephen Roach's Bullishness
Stephen roach has sent the strongest SELL signal I can think of: He capitulated his bearish stance after all these years and thorough research. Robert Prechter Jr, has written about capitulation as one of the behaviors at major market turning points.
BLISSBULL: IT'S CRASH TIME!!!
CRASH TIME
Blissbull, the time has come.
TLAB, KIM, MOT, WMT, GOOG, MSFT, UTX, and FNM are looking really sick. They have the beginnings of a waterfall selloff.
TLAB gap spike on blow out earning and has been nearly closed by a small wave 1. The last 2 days have been a small wave 2. An extended wave 3 is about to drop at least $2.
KIM made its top on news that it would be added to the SAP500 index. It is in the same wave count as TLAB even though it took more time.
MOT finished a very small wave 2 today in a much larger 3 of 3 of 3. Bollinger bands are opening and the price is following the lower band.
MSFT price has remained outside the lower bollinger band for 2 days. The consolidation has been very shallow so far, and today's low broke Friday's gap lower. the Wave count is at least 3 of 3 of 3. I would expect mroe consolidation, but it looks like the rest of the market has caught up with it in terms of being in a larger wave 3.
GOOG looks like its bounce from mid March '06 lows has been motive, but it did not make a new 52 week high, so it probably truncated. The sharp pullback supports post truncation behavior. More selling to come. I'm having difficulties identifying the waves in the sharp selloff. The price did find support in the area of the lower bollinger bands.
WMT finished a flat from early April '06 low to present. Now comes a whole lot of wave 3's.
UTX Reported great earnings recently. The price has come back into the bollinger bands and still should drop a couple dollars to tag the center. The RSI issued a SELL a 3 days ago, as did the stochastics. The MACD is about to issue a sell. UTX is one of the few DOW components that are/ have made new all time highs.
FNM has a bunch of waves 1-2 and clearly shows a rounding over. The bollinger bands are opening and the price is following the lower band down. MACD shows a continued downtrend. The stochastic is nearly oversold since the rallies have been short lived.
MARGIN CALL ON GOLD
The Bank of NY published a margin call on gold this morning. The call was made by some dealers or clearing houses. Sall is due Monday May 7th. I forgot to bring the link home so I could post it tonight.
Short MOT
MOT looks like a good short candidate. There are several wave 1-2's unfolding. All those waves 3 of 3 of 3 will give a great return on investments.
Large 1 Nov '05 high to Dec '05 low motive
Large 2 Dec '05 low to Jan '06 high zigzag 3-3
Medium 1 Jan '06 high to Feb '06 low.
Medium 2 Feb '06 low to April '06 flat 3-3-5
Small 1 April '06 to present looks very motive.
The Bollinger bands are opening really wide and the price is trending along the lower band: Downtrend continues.
RSI down trending, but not oversold. Downside potential remains.
MACD: the signal is pulling away from the trigger: More downtrend.
Stochastics: Oversold, get ready for the price to rise.
4 yr lower channel about to be broken: Bearish
The price is trading well below the 50 day moving average. The average is in a down trend. 50 DMA should provide resistance to rallies: bearish
http://stockcharts.com/h-sc/ui?s=mot&p=D&yr=0&mn=6&dy=0&id=p98331346671
Copyright Violations
Exposure to international software piracy has made me take a cautious approach to developing and selling software I specify and write on my own. I've concluded the best way to take software to market is to sell it once, sort of like selling a company. Or you could look at it as deisigning an electronic widget and selling the design to a marketing firm and let them wirry about manufacturing it. It becomes the purchaser's responsibility to enforce copyright laws, not mine. I'm tempted to use Ebay since visitors almost expect the unexpected.
U$D, Chubbie
That point and figure chart shows two clear Elliott waves: The rally from the low 80s to the low 90s is a text book motive wave. The pullback looks like a zigzag. The pattern needs another motive wave to mid or upper 90s to complete the rally out of the low 80s. The second rally will indicate US based corporations pulling out of other countries more than other countries seeking currency shelter in the US.
BKX Bollinger Bands
CCI, RSI, and stochastics are just as helpfull at major turns. It looks like they are confirming a major turn in the works
LMT 30 YR Ending Diagonal
It looks like is has finished the zag in WAVE 5 and it starting its descent.
This market looks like it could just collapse at any moment.
http://finance.yahoo.com/q/bc?s=LMT&t=my&l=on&z=l&q=l&c=
WB E-waves
I agree with the ending diagonal elliott wave count on WB. Larger Wave 1 that includes the ED began in 2001. It is truncating with respect tothe highs made in 1999. The truncated wave is wave 5 of a larger wave that began in the early 1970's!!! At this large a degree either ED or truncation forecasts a sharp reversal. Since there are TWO large degree waves signalling a sharp reversal, it makes the probability of crash very high.
Initial support will be $25.
Happy shorting
WB E-waves
I agree with the ending diagonal elliott wave count on WB. Larger Wave 1 that includes the ED began in 2001. It is truncating. At this large a degree either ED or truncation forecasts a sharp reversal. Since there are TWO large degree waves signalling a sharp reversal, it makes the probability of crash very high.
IPT Ewaves
There are several E-wave counts possible.
The best is a corrective triangle that just ended. Target price is above $1.60.
The next best is wave 5 of this triangle has not completed. There is one more dip before the bottom. and a nice rally after. Same target of $1.60.
The better of the bearish count is Wave A from $1.63 down to $0.58. Wave B is a triangle in its 5th wave with a target above 60c.
The worst case is Wave A from $1.63 down to 58c. Wave B is a triangle that just finished. Wave C could start any moment. Target below $0.10.
http://stockcharts.com/h-sc/ui?s=IPT&p=W&yr=3&mn=0&dy=0&id=p18066952915
MSFT Crashes
Today's 10% plunge in Microsoft share ripped through the trend line formed by the lows since 2002. THAT'S NEARLY A 4 YEARS OF SUPPORT BROKEN IN A SINGLE DAY. This confirms the beginning of the 2nd bear market (Wave C) since the dot com bubble burst. I'll be ready to scoop up MSFT shares when they find support in the single digits.
INTC
I'd give INTC a little longer to reach the $22 level first. Otherwise it is a landslide south. The price did break the 50 DMA and upper Bollinger band today on good volume.
TLAB Still a Short Play
The price surged on good earnings news. The wave count is close to done. Each subsequent rally following a pullback has rallied less than the previous rally, and makes only a marginally higher high. Raise the short entry point to $16.50
SHORT PLAY: TLAB
Todays spike looks to have completed a multiple of wave 5s. Tomorrows earning will be spectacular. After hour's trading erased some of slide into the close, This could be a wave 2 in the new trend down, or wave 4 in the last wave 5 to the top. Wait for confirmation on wave counts
http://clearstation.etrade.com/cgi-bin/details?Symbol=TLAB&csize=07&PositionId=3072169980&am...
You can see how not only did the price rally from the lower bollinger band to the other, it pierced it and pulled back. The MACD is still oversold even though the price made a new 52 week high.
http://stockcharts.com/h-sc/ui?s=TLAB&p=D&yr=1&mn=1&dy=0&id=p68776599426
The success Lockheed reported today was met with solid selling. I think the same will happen to TLAB as it has rallied nicely over the last 2 years. I don't know if trading will be a pop and drop, or a drop. So just wait out the opening. If the market spikes up wait until a fairly clear wave count unfolds. Parabolic spikes tops are tough to call. If the price drops below $15.25 at the opening, chances are the top is in, and the price will fall very fast.