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FTSE and DAX.
The past couple days the FTSE has powered to new 52 week highs. There may be one more advance before that elliott wave over that time completes.
http://stockcharts.com/h-sc/ui?s=$ftse&p=D&yr=0&mn=6&dy=0&id=p98331346671
The DAX is within one days trading range of making a new 52 week high.
http://stockcharts.com/h-sc/ui?s=$dax&p=D&yr=0&mn=6&dy=0&id=p98331346671
The SP500 made a new 52 week high and looks to have completed an ending diagonal that started in early January '06
http://stockcharts.com/h-sc/ui?s=$spx&p=D&yr=0&mn=6&dy=0&id=p98331346671
The DJIA also posted a 52 week high, but the wave count looks choppy.
http://stockcharts.com/h-sc/ui?s=$indu&p=D&yr=0&mn=6&dy=0&id=p98331346671
The NDX is NOWHERE near making a new 52 week high. The NDX failure to rally to new 52 week highs is flashing a huge bearish divergence warning.
http://stockcharts.com/h-sc/ui?s=$ndx&p=D&yr=0&mn=6&dy=0&id=p98331346671
The 10 yr Note yield started its drop like a rock as investors rotate $$$ out of stocks and buy bonds. This should be the last dip in yields for quite some time. In fact the greatest conundrum will be "Why are the housing market AND yields falling?"
Bliss GE Wave 2
I agree with the Wave 2 Zag being an ending diagonal. That's not going to help the markets as GE is as diverse as the market. If GE sells off, it signals all other areas of the market should sell off
Chris3403 Not Talking about GE
but I'm talking about another Dow Industrial component.
Chris3403 Beating Estimates
I have heard from one of the guys in my office the company we're working for made a tremendous effort to close deals last quarter. Now the company won't make this quarter's numbers.
A couple open positions were closed unfilled, a couple projects have been scaled back or postponed indefinitely. Travel restrictions have been put in place. I bet other companies did the same thing. The result will be surprises to the downside going forward.
Thnx 4 Tech Support
I'll look for those links on Stockchart. I hate it when companies in general break something that works just for the sake of change.
Stockcharts URL Problem.
The charts are now generated with a java engine since the URL stays the same no mater what setting is used. Barcharts dot com has the same problem. That's why I didn't post links to the global markets I commented about today.
"Some Assembly Required"
"Kids, get your parents to help you"
;)
NIKK Japanese Nikkei Market
The Nikkei is in the late stages of topping.
Weekly charts:
Stochastics have been in the overbought area for 7 months. Recently the stochastics issued a SELL signal.
In January '06 the price started pulling away from the upper bollinger bands. The price moved sideway and is resting on the middle of the bands. The upper band is capping over to limit upside potential. Be on guard for a price move off the middle to one of the bands.
MACD and histogram issued SELL signals.
RSI has been in the overbought area for 7 months. Recently the RSI issued a SELL signal.
The Elliott wave count is a double zigzag from the April '03 lows. The 2nd zigzag is parabolic. Once the market tops, the initial selloff should be quick. There could still be one more rally through March to a new 52 week high.
It's not surprising the indicators spent a long time in overbought areas as the Nikkei rallied 50% in a year!!! This is a blow-off spike.
Daily charts:
Stochastics gave a sell signal in early February '06; became oversold and gave a buy signal around Feb 20; and gave another sell signal without becoming overbought.
The bollinger bands are forming an arched top. The price has been trapped in the lower band the last 3 weeks.
The price has spent about half of the time trading below the 50 day average. The 50 day average is flattening; a bearish sign.
The MACD gave a SELL signal from overbought levels in January. There was a bearish divergence at the new 52 week high made in Feb '06. Now the MACD is negative; bearish sign. The MACD started to pull away from the signal again this week; expect continued selling.
The RSI gave a sell signal in mid Dec '05 and has drifted lower ever since. There was a bearish divergence at the new 52 week high made in Feb '06.
The rally out of the January '06 low was a motive elliott wave. The sell off in the first half of February looks more like a zigzag than a motive wave. Likewise, the rally out of the Feb '06 lows looks corrective.
Over the next week there should be continued selling. The rally out of the next low should challenge the 52 week highs in late March '06 or early April '06.
SSEC Shanghai Securities Exchange
April '04 to June '05 1778.09 to 998.23 was a 779.86 Sell off
June '05 to March '06 998.23 to 1308.19 was a 309.96 correction
The correction of the sellof is 39.7%. This is close to Fibonacci ratio of 38.2%.
Weekly chart:
Stochastics are in the Overbought area and poised to give a sell signal.
MACD histogram shows a move return to the 50 week average.
RSI nows shows the same strength as when the sell off began. This is typical of a bounce.
The Elliott wave shows the selloff to be a large zigzag, and the correction to be a smaller zigzag.
Daily chart:
Stochastics gave a sell signal.
The price has started moving from the top Bollinger band to the lower band. The bands are pinching. This
indicates a dramatic price change is about to happen.
The RSI indicates a loss of strength as the price moved higher. This is a warning sign of a trend reversal.
The Elliott wave the last week of Feb '06 and March '06 looks like an ending diagonal. It's a very choppy advance to a new 52 week high.
The collection of technical indicators are pointing to a move lower in the SSEC through the month of March '06.
DAX German Market.
The DAX has been in a bear market rally over the last 3 years.
Weekly chart:
Stochastics are in the Overbought area again. Much of the past 2 years the DAX has been in the overbought area.
The Bollinger bands have been widening the past several months.The price has followed the upper band. This week the price pulled away from the upper band.
The MACD and its histogram continue to work their way higher. This typical of a blow off top.
RSI is in the overbought area for the third time in a year.
The elliott wavw for the bear market rally that started in March '03 looks like a zigzag.
The zag started in Aug '04 and is nearly complete. The zag is extending. The strong rate of rally this late in the game makes the chart parabolic. Extensions and parabolic spikes are followed by equally fast retracements.
Daily charts:
The stochastics gave a SELL signal. There is still room for further downside as the stochastics are not oversold.
The bollinger bands are pinching, and the price has crossed from the upper to lower band.
MACD and histogram gave SELL signals.
RSI was in the overbought area and has given a SELL signal.
The elliott wave count is wave 4 of the zag wag a flat occurring in early February. Wave 5 looks like an ending diagonal (ED). Two things point to and ED. The choppy advance, and the ED was nearly retraced very quickly (nearly all on Feb 28 2006).
While the DAX weekly charts are flashing warning signs, the daily charts are flashing SELL signals.
NDX Nasdaq 100
Weekly Chart:
Stochastics gave a SELL signal in Jan '06. The Stochastics have headed lower, but not into the oversold area.
Bollinger bands are starting to pinch. The index has pulled away from the upper band and is resting in the middle of the bands. The index should remain range bound, but make a move to one band or the other.
Then MACD gave a SELL signal from a high in Jan '04. The two major rallies to new 52 week highs resulted in lower highs in the MACD. The MACD gae a SELL in Jan '06 from a lower high. This divergence is BEARISH.
RSI has met resistance by the 70 area. The RSI tops and bottoms mirror the NDX, but higher highs and higher lows are lacking. This is NEUTRAL.
The NDX choppy advance since the lows in '04 make it tough to be certain about Elliott wave count. The rally out of the March '03 lows haas been a WAVE B so far. Is it a zigzag, double zigzag, or a complex WXY?
Daily Chart:
Stochastics are re-entering the overbought area. The move out of the oversold rea has several false buy and sell signals.
Bollinger bands have pinched. The NDX penetrated the upper band on Friday and was repelled.
MACD gave a SELL signal in Nov '05. Since then the MACD has made lower highs and lower lows. The is a divergence with the NDX high in Jan '06 and a "confirmation" of a real lower high in March '06. The MACD is in negative territory which is bearish. The MACD is giving bearish signals.
RSI is very similar to the MACD. The RSI still has room to fall before oversold conditions register. BEARISH
A possible head and shoulder pattern has developed over the last 4 months. 1633 is the neckline.
The past 3-4 weeks the NDX has spent a good deal of time below the 50 week average. This is a divergence with the SPX; this is BEARISH.
The market is even choppy at the daily scope. Elliott wave analysis is a challenge the best timeframe is year to date. Elliott waves over the last 2 months show a motive wave up, triangle or double zigzag down, and a triangle or ending diagonal up. The combination of triangle down and ending diagonal up is the worst case since WAVE C in the Bear market starts this week instead of later. A double zigzag down and triangle up implies a short term selloff followed by a rally challenging 52 week highs Either way, the market should move down the next few weeks.
Both weekly and daily charts indicate the upside is limited and the strong potential for selling over the next month or two is relatively high.
SPX Standard and Poor's 500 Index
Weekly charts:
Stochastics have spent the last 3 months in the overbought area. A false buy and sell signals were issued as the indicator bounced between overbought and oversold areas.
The Bollinger Bands are starting to close a bit. The index is pulling away from the upper band. Over the past year and a half, the index has bounce twice off the Center of the band and dropped below on the third try. The index is about to make a third selloff challenging the center of the bands and make contact with the lower band in the 1200 area. This is bearish
MACD has been declining since the indicator made a high and SELL signal in '04. This is a bearish divergence withthe market that has wiggled higher. This is a big warning sign, since the condition has persisted for nearly 2 years. The MACD is about to issue a SELL signal.
The RSI has been declining since the indicator made a high and SELL signal in '04. This is a bearish divergence withthe market that has wiggled higher. This is a big warning sign, since the condition has persisted for nearly 2 years.The Stochastic is about to issue a SELL signal.
The index remains above the 50 week average. No real change to the trajectory has happened. Volume has dried up just before the market tops in '04, march '05, and sept '05. The volume has been drying up over the last 6 weeks, signaling some sort of top and 5 to 10% decline.
The Elliott waves count is very difficult in this choppy market. The best count is a WAVE B triangle that started in March '03. The triangle is in Wave E. There is a little throw over as Wave E is just above the trend line connecting the tops of Wave A and C.
Daily charts:
Stochastics have been in the overbought area for the last 2 weeks. It has issued a SELL signal
The bollinger bands continue to widen. The index is trying to pull away from the upper Bollinger Band. Friday's early rally didn't have enough to tag the upper band. The price should drop to the 1260 the area of the lower band.
The MACD gave a sell signal late November '05. Since then the MACD has given only false buy signals. The MACD has drifted lower as the index rose. This divergence is BEARISH.
The RSI gave a SELL signal in Nov '05. The RSI has drifted lower since despite the rise in the index. This is BEARISH.
The past 4 weeks shows a possible head and shoulder in play. The top of the right shoulder is being formed. The neckline is 1278. The 50 day moving average is rounding over. Both area bearish.
The index has been too choppy for accurate Elliott waves on the daily scope. The rally in choopy trading itself signals a top being formed.
The indicators for both weekly and daily charts paint a bearish picture. The SPX is still forming a topping.
Now would be a good time to exit the market and wait for confirmation of WAVE C to start.
NDX 1707: Peg Wins.
Great call. Now it Ursa Major.
Peg 1707
And 1712 would invalidate the ending diagonal count.
NAZ 100 nearly done.
One more little push highre should lull the Bulls into a "higher highs, higher lows" rationalization to buy as big money dumps.
Naz 100 Looking Sick
The sell off from Jan '05 to Feb '05 lows looks like a textbook triangle. Post triangle rallies often are sharp thrusts as much as the width of the triangle. The NDX post triangle rally looks like an ending diagonal (ED) that is truncating. Tomorrow should have an initial lower bias, rally above today's highs, and then plunge lower to kick off the E-wave bear market.
The SPX and DJIA made 52 week highs in Feb '05, but the NDX did not. This is a bearish divergence. This is a topping process, and signalling another US led invasion sooner rather than later.
http://charts.barchart.com/chart.asp?sym=$IUXX&data=Z60&date=030106&den=HIGH&divd=Y&...
FTSE gives SELL
MACD and Stochastics gave sell signals. The magnitude of selling erased a week of gains. Bull Elliott Wave count looks complete.
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
NAZ COMP E-waves
The rally out of April '05 is best counted as an ending diagonal (ED). Presently the ED is in wave zag of 5. There is chance of truncation (failing to reach a new high before completing the ED). The rally has been choppy, worked its way into the point of a wedge. Exit Long positions and wait for confirmation of the trend reversal before shorting.
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[w,a]dacayyay[de][pb50!d20,2!f][vc60][iLp14,3,3....
SPX E-wave
Since the first of the year a zigzag has taken place. This would also be the second of a double zigzag that began in Oct '05. I'm looking for a pullback to start as those in the know finish pulling out of the markt before the bad news dates in March arrive
http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
10 yr Tnote yields set to move.
Bollinger bands have pinched. This indicates yields are about to make a strong move one way or the other.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
Choppy, Choppy Trading
A trend turn is very near as triangle wave 4's, ending diagonal wave 5s, or a combination of both unfold in the major markets. There is not much left to the upside.
SP500 wave count
Look for a selling pressure to start tomorrow. The consolidation from Jan '06 highs to mid Feb '06 looks like a triangle. That signals the next motive wave is the last of the next larger degree. The rally over the last 2 weeks looks like a complete motive wave that thrusted. Stochastics are perfectly poised in the overbought area. The MACD is lower than the Nov '05 highs despite the index advances. This is generally taken to be a caution flag. Even though the sp500 is less than a point from a new 52 week high, I think there will be enough momentum to carry the index higher tomorrow and avoid a truncated wave situation. Even if the SP500 gapped down, I would not call it truncation because of it being sooo close.
http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
Chubbie: SMH
It's a head and shoulder pattern. The right shoulder dipped below the neckline. That's a technical sell signal. E-wave count looks good for continued downtrend.
Nikkei Down
The Nikkei high this evening was 20 points from a 50% retracement of last Friday's sell off. Look for accelerating downside the rest of the week.
http://finance.yahoo.com/q/bc?s=%5EN225&t=5d
Nikkei 1 down- 2 up
The first two elliott waves in the new Nikkei bear market look complete. Tomorrow should confirm if 15400 is broken.
http://finance.yahoo.com/q/bc?s=%5EN225&t=5d
10yr Treasury Yield Could Drop
The last 3-4 years it looks like the yield on the 10 year Treasury has formed a trianlge. The triangle is finishing wave e or has just started the next move down. Moves following triangles are sharp and travel the range of the triangle. That means one more new low in the 10 yr yield is in the cards by the end of the year. Target: 3% area
This would follow the behavior in the bond market during the 1929 stock market crash. In WAVE C of the stock crash, there was a sharp "flight ro quality". Bond yields then began a huge spike as bond holders realized default was inevitable. The raw data is available on the federal reserve website.
Another Nikkei Drop.
The recent pullback from the 52 week high is more than 62% of the rally from the Livedoor selloff over a month ago. There is still no confirmation of the beginning if the new bear market. The parabolic trajectory is losing momentum.
Program Trading
I'm defining program trading as an automated set of rules to enter and exit speculative markets. Prechter argues the set of rules for entering and exiting speculative markets are based in collective human emotions written into the software. TAP tries to take out the human factor by basing trade criteria on technical analysis. Program trades make up about 75% of the volume. When a crash happens, program trading will be blamed since it dominates the trade volume.
Blackbelt1 TAP
When you validate your automated trading software, check for software system stability.
1.) Input data as a sine function for 10 cycles. Is the output bounded?
2.) Repeat item 2 for cycles of 5 days to 5000 years. Use a log scale for time and 10 points per decade.
3.) If the tests are all bounded, then the software is stable; otherwise, your software could overshoot the market tremedously when the market resonanes with the unbound frequency.
This is one of the system stability tests I learned in a graduate level signal processing course. It's basically a spectrum analysis test.
The basic test you should ask the group is: "Does the algorithm work in bull and bear markets?"
Aire,
The market is a leading economic indicator. The market rallied 3 years, and now we are seeing some great earnings. Since the XDB is rising, investors are anticipting a huge surge in volume. With the large top being formed and numerous warning signs flashing, the volume should occur to the downside.
One of the most important warning signs is the low cash position mutual funds hold. It is at historical lows. It's part of a liquidity trap waiting for bulls.
Stick a Fork In the FTSE
I think its ending diagonal (ED) is done. The advance over the last month has been choppy. Wave 5 of the ED ran past the upper trend line. The stochastics are overbought again. The bollinger bands are kind of neutral as the price continues to advance in the upper band. The MACD has been relatively flat as the price advanced (a divergence).
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
FTSE and DAX Ending Diagonals
Elliott wave count for FTSE and DAX is ending diagonal. The ending diagonal is in wave 4 or 5. Since the market is so choppy it's difficult to tell where wave 4 becomes wave 5. The upper and lower trend lines leave very little room/time until the top is in.
http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
DAX- Ending Diagonal.
The advance in the Dax has been several zigzags on this week's intraday charts. Today sould wrap things up for the Dax and selling pressure to increase.
http://finance.yahoo.com/q/bc?s=%5EGDAXI&t=5d
Nikkei.
That's 900 points over 5 days. 6% drop.
We'll see if the Western markets follow or make new 52 week highs before reversing.
Tic-Tac Nice Chart
The most consistent thing I see about the NAA50 is not the time component, but the resistance events. When the NAA50 comes very close to the upper bollinger band, it has revesed trend.
Elliot waves are also prominent. The present rally may actually print one more chart high over the next couple weeks. The markets are definitely in a topping process.
It's not how much your portfolio grows; It's how little you lose. Hold some cash aside in case banks shut down.
Market Decline rest of February
The TA poll I've made indicates there will be a market decline over the next several weeks. Both the E-waves (prechter) and Cycles (Tim Woods) are indicating a noticeable market declines. Zoran Gayer and Rober McHugh are looking for confirmation of a top using e-waves.
I've been watching FNM, GM and the 10yr US T-note yield.
FNM wave count and fibonacci ratios are prime for a substantial decline.
GM zig-zag bounce is complete and the price confirmed with a relatively quick decline this week.
The T-note yield had a zigzag consolidation this week. It didn't make a fibonacci 38% retracement. It would have inverted the yield curve way too much. The initial move out of the zigzag has nearly offset the consolidation. The underlying market wants the yield to go higher.
Airdale: Cycle Variation / Distortion
Your observation of cycle lows in individual stocks indicate investors are stepping through a perceived risk spectrum. As cycle bottoms vary on the order of weeks as you point out, they begin to appear out of phase. They begin to cancel each other out This is reflected in a sideways moving market. The disunity of cycle bottoms fits very well in Prechter's socionomic model.
How much has the window of cycle bottoms grown over the last 5 cycles?
What if the 78/80 week cycle for market indecise were computed by the average of its component 78/80 week cycles?
Bliss: NIKK E-waves
The nikkei was due for a trend reversal. We'll see what degree it is pretty quickly. I'm surprised the financial media didn't report the 400 pt drop before the US mrkets opened this morning.
This Time It's Different
This is the link to Marc Faber's artical.
http://www.safehaven.com/article-4570.htm
Take a good look at:
Figure 1: US Equity Mutual Fund Cash Positions, 1960 - 2005
Everytime the market bottomed, the fund cash position spiked. There was no spike in Oct '02 or March '03, just a little spike in the middle of '00. This is signalling a huge liquidity trap on the way.
DOw Ind Avg Acting Odd
The NAZ and SP500 both dipped below the Jan '06 lows. The Stochastists are near oversold levels. E-wave count could go either way at this point.
The Dow Indistrials did not dip below the Jan '06 lows. The stochastics indicate more downside could occur before entering the oversold area. Ewave could go either way.
FNM E-wave
Larger degree wave 1 1st half of '04
Larger degree wave 2 3Q04
smaller degree wave 1 4Q04 to 4Q05
smaller degree wave 2 just completed. Retraced 50%
The fibonacci ratios and ewaves are giving a very high probability of a major trend change this could be jaw dropping wave 3 of 3 scenario. Short FNM
http://stockcharts.com/def/servlet/SC.web?c=FNM,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!La...