DAX Cracks

Candlestick shows bearish engulfing.

Elliott wave looks complete and reversal should head lower before finding support multi week support.

Stochastics are overbought with an unconfirmed sell signal.

MACD difference reversed.

Bollinger bands are widening with the price pulling away from the upper band. The lower band is a little more than 400 points below today's close, so there is not much support below.

http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...

Dow Wave 5, Golfin

I agree. The last couple of days looks fairly triangular. Wave 5's following wave 4 triangles are short and fast. It is entirely possible investor confidence rallied off the record in after hours.

DAX waves look complete.

If US markets were to drop suddenly tomorrow along with GOOG, it would imply a truncation and ending diagonal.

Another day or so of bonds consolidating. The yield curve is so flat now with the increase today. The 1y yield is nearly equal to the 10yr yield. Why take a chance holding for 10 yrs when you can hold for 1? The market is signalling recession. If money rotates from stocks to bonds tomorrow, a yield inversion will trigger again, and maybe stick for a couple days.

Nasdaq Ending Diagonal

Look at the ending diagonal off the October 2005 lows.

http://stockcharts.com/def/servlet/SC.web?c=$compq,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3....

If it hasn't topped already, then it will very quickly. Either way the NAZ is signalling a strong break to the downside beginning any day.

FTSE and DAX look nearly complete and should turn at relatively the same time as the US markets.

The yield on the 10 yr TSY has rallied enough to signal a new trend, It is above the 50 DMA and near the upper Bollinger bands. I expect a few days of consolidation before new 52 week highs are reached. Tomorrow's news today: Bernake Causes a Bond Rally.

DAX /CAC EXHAUSTION GAP
AND THEY MADE NEW 52 WEEK HIGHS ON THE BREAK!!!
THE TOP OF THE WORLD MARKETS IS ALMOST IN.

DAX

http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...


CAC

http://stockcharts.com/def/servlet/SC.web?c=$CAC,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...

lexus300: Crash Event

It's probably sooner than later. Even if investment sentiment is off the chart bullish, the personal savings rate is negative, and mutual fund managers are holding one of the lowest % of cash recorded. A new wave of downsizing has begun. Salaries have not kept pace with oil induced inflation.

All that adds up to no gas in the gas tank, and no gas station for miles around. Under those conditions a car will eventually stop and leave the passengers stranded.

FTSE and DAX new 52wk high

Nikkei, Dow, Naz, SAP500 are close to new 52 week highs as well. The US markets may truncate.

The market is definitely in a topping mode. Japanese investors will probably turn the selling pressure on very quickly as they are being given a chance to sell above the levels the market was shut down. Nobody wants to get caught holding long with a market that has been close because it fell too fast. Two weeks ago was a warning shot. The next time the Nikkei is forced to close early this spring, it will re-open at least 10% down.

The 10yr US treasury bond yield has completely broken the upper channel of the multi week downtrend. The yield is right around the 61.2% retracement of that downtrend, so the yield can go either way from here. HOLD

Check Out DAX and FTSE

Both are whiskers away from a new 52 week high.If the US markets are in sync with the DAX and FTSE, then truncation in the US markets is looking more probable.

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!...

General Markets Wave 4 of ending diagonal

The selloff after the January top looks like a wave 4 triangle, flat or zigzag depending on which market you look at. The way earnings are going, I'd suspect the markets rally one last time to new 52 week highs.

A Little More Down

I took a closer look at other US markets, dax, and ftse. they are nearly done with this consolidation and about to head back up. The rally would complete a Wave 5 in the FTSE and possibly the NAZ. The rally would only be wave 2 consolidation in the DOW and SPX.

I'm starting to think the NAZ makes another high and the DOW/SAP do not. This would be a bearish divergence.

NAZ IZ FIBBING

The Nasdaq Composite tagged the Fibonacci 38% retracement of Last Thirsday's high 2x today. It also overlapped Last Wednesday's lows. Overlapping did not occur in the SAP500, so the NASDAQ Composite may be experiencing a leading diagonal A worse wave count has wave 3 of 3 ready to knock 80+ points of the index the rest of this week.

NIKK UP

The rally out of last week's lows look more and more like a zigzag. The zig finished between 50% and 62%. I'm looking to see the zag reach the 62% retracement area (15943) before a wave 3 starts. 16000 is a psychological level.

Rebelman: Today Was Corrective

The bounce of the early morning lows was a zigzag. The NAZ has not made the 38% retracement. This makes the likelihood of a move higher at tomorrow's opening.

The market's could see a deep VEE as a wave 5 completes the first selloff from the Jan '06 highs.

Today was a narrow trading range that doesn't give me the impression the selloff from Jan '06 highs were a zigzag of an ending diagonal.

Nikkei = Hold

It's not conclusive if the bounce from last weeks selloff in the Nikkei has finished The bounce retraced 58%, which is not a fibonacci ratio. It is close to fibonacci ratios of 62% and 66%.

The bearish situation is a minimal drop from 15875 to the 13560 area by the end of the week, if the market is not shut down for several days.

Wait for the Nikkei to fall below 15100 before shorting the wave 3 downtrend

Falling Guillotine:

That was a great table to post. The daily share volume was impressive, and the total $ of shares traded for a particular company was jaw dropping. The top 10 companies in the list had a combined $ volume over $20B for a single day. Since 85% of the trades were to sell orders, $17B stocks were converted to cash. From Trash to Cash.

70 to 80% of trades at the end of December '05 were from computer trading. It will be interesting to see how few real people selling it will take for the glitches in the program trading strategies to appear.

Blissbull is now Blissbear?

I've been away from the board for 1 month and Blissbull has turned bearish. Well, he certainly has been making great bullish calls all this year, so his staunch bearish stance needs to be taken seriously.

Over this past month I accepted a job offer, the first one that was made. The day I started I received a handfull of calls from headhunters for other positions. The last time I experienced this kind of hiring frenzy was in May 2000. We KNOW what followed that. This peak in the job market is macthing up with the stock market peak. Better take profits. This selloff will be similar to the South Sea Bubble where elliott wave 5 of the spike failed and the bubble collapsed immediately, unlike the '89 Nikkei.

SP500 triangle

The rally off the October '05 lows has formed a triangle over the last 2 weeks. I think there is one more little down leg (wave e) over the next 5 days before the final rally (Wave 5) to the top in early Jan '06.


http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...

P/C ratio Bliss

The P/C ratio on the CBOE link you provided is around 0.7. It has not been above 2 for years. On the 3 year weekly chart there is a 1 year cycle bottom forming in the P/C.

http://stockcharts.com/def/servlet/SC.web?c=$CPC,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...

This implies investors are about to turn bearish, and the market sell off the next several months. The P/C average is also rising gradually. This means the long term bearishness is growing while the market climbs. This is not a wall of worry symptom, but a topping one. It's also a divergence since as stocks rise, investors tend to feel more confident and buy fewer put to protect to the downside.

That's a very strong P/C ratio for being so close to a new 52 week high in the Dow Industrials. Usually relatively high P/C ratios occur at bottoms, where fear is the greatest. Maybe the fear is really going to take a grip and not let go this time.

WMT trend reversal.

WMT's rally from $42.31 to 50.87 looks like a Wave 2. The price went from the upper bollinger band very quickly, and the bands are now opening. The larger trend is now down. The stochastics are oversold, so the next couple days should be some consolidation before the move continues lower.

http://stockcharts.com/def/servlet/SC.web?c=wmt,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...

Dow Ondustrial E-waves a little more clear

The move off the Oct' 03 lows looks motive. The divergence between the DJI and the other markets can be explained. The past 2 years the markets have been in a wave 4 triangle consolidation. The DJI formed a symmetrical traingle while the others formed a running triangle. The recent rally off the OCt '05 lows is the final wave 5. Notice how quickly it shot up, as is typical with post triangle moves.

Of the Oct '05 wave 5, it is more than half way complete. The top is very close, and tough to call. The DJI should make new 52 week highs as the other did. Chances are good that it will not make all-time highs. This truncation signals a crash next year.

Black Friday / Monday for WMT and Wall St

In general: the stochastics are way overbought. The e-wave 5's are extending. There is too much euphoria going into the holiday season for the market to be sustained.

Santa Arrived Early

As I reviewed major US, European, and Asian markets this evening, I noticed something very consistent: An Elliott wave 5 that started from the October '05 lows has unfolded. The daily stochastics have been above 90 (very overbought) for several days, confirming the wave count. World markets are due for a net loss this week, regardless of what the holiday crowds do.

Michael: housing stocks

They have already taken a hit. I doubt they will make new highs.

BNI

The motive waves are not clear for the last 6 months, but the overall pattern looks parabolic. There is a fair chance of a few more rallies and pullbacks before the final top is in.

Dow Transports About To Slam On The Brakes

In 1999 the Dow Transports started a 5 year consolidation that ended in March '03 This is probably a Huge Wave 4 when viewed from a 35 year chart of monthly ticks. Sorry, Big Charts is Java based and the link won't copy the way that will show what I mean.

The Huge Wave 5 started at the March '03 lows.
Large Wave 1 ended Jan '04
Large Wave 3 started April '04
Large Wave 5 started Oct '05
http://stockcharts.com/def/servlet/SC.web?c=$TRAN,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!...

Short term you can see a the Large Wave 4 triangle that started in March '05 and ended at the Oct '06 lows. Since then Large Wave 5 has formed a fairly clear 5 wave sequence. Even I can see this!!! One of the e-wave guidelines is wave 5s following triangles are short thrusts that equal the width of the triangle. The Oct '05 fits both structure and price ratio. A major turn in the Dow Transports is about to happen.

http://stockcharts.com/def/servlet/SC.web?c=$TRAN,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!...

From a Dow theory view, neither the transports and industrials have confirmed each other. The industrials were not confirmed by the transports in 2000. The transports new all time highs are not confirmed by all time highs in the industrials. Non-confirmation of this magnitude is signaling a major downtrend is about to happed in both markets.

French CAC 40 forming Right Shoulder

This is a fairly symmetrical head and shoulder formation. Notice how investors have been fairly unphased by the news of rioting. The CAC40 was rallying by the time the rioting was worthy enough to be reported on the evening news in the US. Remind people of this fact when they blame the riots on the CAC 40 crash.

http://stockcharts.com/def/servlet/SC.web?c=$cac,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...

Real Estate Crash in Wave 3-3

Look at Pulte Homes: It finished waves 1-2-(1-2). The gap lower on Toll Brother's lowered forecast is typical wave 3 behavior. There is much more downside from here.

http://stockcharts.com/def/servlet/SC.web?c=Phm,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...

Turn Date

I think the elliott-wave count is wave e of triangle that
started in August '04. I've been using ratio analysis to get a time and price projections, not fibonacci ratio, in the Nasdaq Composite. Late November/ early December is the time for a top around 2275. This fits in well with Lexus300's reported turn dates. I believe the first part of a double zizag of the october '05 lows just finished and consolidation will follow.

It will be very interesting to see if the DJIA, Nasdaq composite and SP500 confirm the Nasdaq 100 new 52 week high made this week. Robert McHugh pointed out only 1/3 of the Dow components faired well during the "Hindenburg Omen" timeframe.

Yields and FNM

The yield on the 10 yr Treasury continued its march higher. This is despite overbought stochastics. The yield remains along the upper edge of the uptrending bollinger bands. This steady pace should be fairly sustainable, and has been at a "measurable pace".


Fannie Mae has lost steam. The sideways trading the last few day pushed the price below the lower trendline of the October rally. Stochastics are giving a sell signal. The MACD is rolling over and about to confirm the sell signal. The price didn't bounce off a fibonacci ratio, but the down day last week on huge volume doesn't bode well for future rallies.

http://stockcharts.com/def/servlet/SC.web?c=fnm,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...

BONDS MELTING DOWN


The gap higher in ten year treasury yields has not been retraced. Today the yield finished at its highest since the gap. Bollinger bands have been fairly parallel, though a hint of widening has started. Stochastics indicate the yield is completely overbought. The MACD paused for a while and has started pulling away.


http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[da][pb50!d20,2!f][vc60][iLp14,3,3!L...


The longer term charts also indicate the yield is overbought. Bollinger bands have opened and the yield should continue higher. It should be more clearly observable the yield broke the upper trendline of the consolidation from the 4.9% area.

http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...

The short term gap to break the 2 year upper consolidation trend line is a very strong signal yields will continue higher long term.

Hang Seng Asian Contagion

The panda bear market begins.

Short term charts show a double top that is difficult to make a definative e-wave count. Both moves from tops are motive (5 segments) The move from the second top looks like it had an extremely weak wave 2 bounce and started a wave 3 this week. Today the market gapped, as typically happens in a wave 3.

Bollinger Bands are both still pointing down. MACD shows continued downward momentum. The stochastics are oversold, but tried to issue a buy, instead hooked to remain in oversold.

The 50 day moving average is pointing down.

http://stockcharts.com/def/servlet/SC.web?c=$hsi,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...


The long term charts clearly show a 3 years rising wedge whose lower trend line has recently been broken. The bollinger bands are pinching and the price crossed from the upper band to the lower band = bearish. The price is testing the 50 week moving avg. MACD issued a sell signal in late September '05. Stochastics are half way to being oversold.

http://stockcharts.com/def/servlet/SC.web?c=$HSI,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...

Tag, FRE is it!!!

FRE just retraced 61.8% of its $13 drop from late June '05. Hmmm, come to think of it, $13 is a fibonacci number, as is the $8 retracement. The daily stochastics gave a SELL signal. The price pierced the upper bollinger band and retreated. MACD is still heading north.

http://stockcharts.com/def/servlet/SC.web?c=fre,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...

DJIA at Fibonacci Resistance.

The drop from 10609 to 10156 has been retraced 61.8%. Look for a turn lower. The drop was motive and covered 450 points. The next segment could fall about 728 pts(1.618 * 450). This would breach the psychological 10,000 level,

10 Yr Treasury Yield Gapped UP
AND.. penetrated the upper trend line of this 2 year sideways trading. Look for confirmation as the yield retests the upper trendline as support.

THIS IS A VERY BEARISH SITUATION DEVELOPING.


The best Elliott wave count is a bunch of 1-2, 1-2's

http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[de][pb50!d20,2!f][vc60][iLp14,3,3!L...

MrCash: Cycle Variance

I'm very well aware of cycle variances. It's one of the reasons a highly selective bandpass filter has inaccuracies. Infitnite impulse response filters have inertial problem to deal with. It can take 4 to 5 cycles of a pure sine wave before the transient response has settled. Hurst uses a moving average which is a finite impulse response filter. The problem with that is it lags in time by half the number days in the average.

I tried using Fourier Series last night. It takes little time when using a spreadsheet. The problem with Fourier Series signal analysis is the largest period is equal to the number of samples. If you didn't know there was a 4.5 year cycle, you could mis it. Another problem is the next largest cycle is half the number of days of samples. Hurst shows how the cycles are generally separated between 33% and 50%, Fourier would miss those cycles. Gibbs phenomena introduces overshoot at the ends of the sample range. Truncating the series above some frequency would reduce the ringing, but there is still a more fundamental problem. Fourier series is it is based on the pattern of the samples repeating. The market does not repeat that way. If it did, we would not need analysis. This invalidates the curve approximatino at the very end of the sample range where highly accurate prediction is most desired.

Hurst Model:

Then the 37 week cycle I pointed out is really the nominal 40 week cycle that arrived early?

FNM $50 bounce still in play

The 37 week cycle has bottomed. It's bounnce has already started. The trendline from the longer cycle looks to cap the rally to $50 if that with a time target of 2 weeks before it tops and goes down hard. The 72 month moving average shows all cycles longer than 6 years topped and are half way down. This is where the descent gets very steep and prices crash, especially when several cycles are in their steepest descent. When FNM bubbled, the 37 week cycle was so overshadowed by the long term trends that its consolidation was hardly detectible. It was right translated. This time the larger trend could cause the 37 week to be left translated, limiting the bounce to less than $50.

Elliott waves indicate the past 2 weeks FNM has been in a wave 2 bounce. There is some signal noise due to the sudden drop to $41.34. Does wave 5 end there, or a week later? Ending wave 5 at $41.34 implies the bounce is days away from being over. Starting a week later indicates a waves b and c of a zigzag still need to unfold over the next 2 weeks.

If $42 is broken, SELL.

http://stockcharts.com/def/servlet/SC.web?c=FNM,uu[w,a]wacayyay[de][pb11!d20,2!f][vc60][iLp14,3,3!La....

GOOG: Wow!

After hours trading sure was exciting. It feels like Y2K all over, except the spike is localized to GOOG. The spike last night to the $330 area is very close to an upper trendline. GOOG should pop and drop.

Vestor_2000: Hurst

I bought the book about 2 months ago. I've been brewing my own band pass filters since I'm an electrical engineer. Hurst claims 90% accuracy. An artical I read by a Hurst practicianer claimed to be able to track the market with 94-98% accuracy over the short term.

The stuff in the back of the book made my head spin because it wasn't in the format I'm used to. Math has a dialect. Moving averages should work just fine. Download market data from Yahoo in spreadsheet format and then you can plot charts of the different moving averages properly shifted in time. The 6 year cycle was pretty clear to see that it topped in 2000 and topped with this bear market rally. Simple and amazing!!!