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London FTSE in Crash Mode
For most of October the FTSE has been trending lower agressively. The elliott waves show three price drops. Normally this would be conted asa completed wave. In this case the proportionality of the middle drop (started on the 10th) to the other two is nearly equal. Under elliott rules the 3rd wave is not the smallest. Chances are this is not a completed elliott wave sequence, but a series of 1-2's. Further indications are the zigzag nature of the bounces instead of flats or triangles. There should be a very sharp drop over the next week and a half as wave 3-3-3 unravel.
On the continent the French CAC and German DAX gapped down today. Look out below.
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!...
GOOG Update.
Bearish count is either in wave 2 of 1 of 1 with a downside target below $280, or it's in wave 4 of 1 with a downside target around $285. The recent bounce off the $290 is about to reverse tomorrow. Falling below $300 tomorrow would favor the bear counts.
Bullish count: wave 1 of maybe the last set of wave 5's. Rising above $310 favors the bull count and a target above the 52 week highs.
FDIC:
The FDIC strengthens the US financial system only in the confience depositors have in its ability cover for banks that close. Depositors will realize how foolish they were to think such thoughts as the FDIC does not specify WHEN the insurance will be paid. The FDIC was designed for small scale bank failures. With mergers and acquisitions, the smallest bank now is too big. All the eggs aer in one basked. The banking system is no longer diversified.
Wouldn't YOU like to be able to buy groceries instead of worrying when you will be reimbursed.
Who insures the insurance company???!!!
This is financial chess where you need to think 10 moves ahead, not 2.
Sky is Falling
Did the Refco shock catch everybody off guard? This is a real problem that surfaced out of nowhere. Investors in Refco had a 1 day warning, and that was accompanied by a sharp drop in price. Let's not forget that within the last two weeks I advised withdrawing green cash from bank accounts and placing it in a mattress. The account freeze wasn't at MY bank, but the Refco freeze raises the chances.
FNM Waves 3-3-3-3-3-3 Waterfall
Take a look at the weekly 3 yr chart for FNM. The last 2.5 months have been a classic waterfall pattern. This is typical crash mode behavior. FNM is forming a larger waterfall on the scope of months. The larger waterfall is ready for heavy acceleration to the downside.
The timing couldn't be perfect as the 10 yr Tnote yield recently finished a triangle that began in August '03. Zooming in on the daily chart, the new yield rally took off from the reversal in early Septenber '05 in a series of waves 1-2. The bond market is also signaling a crash.
FNM chart
http://stockcharts.com/def/servlet/SC.web?c=FNM,uu[w,a]waclyyay[df][pb50!d20,2!f][vc60][iLp14,3,3!La...
10 Yr Tnote Yield chart
http://stockcharts.com/def/servlet/SC.web?c=$Tnx,uu[w,a]waclyyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
http://stockcharts.com/def/servlet/SC.web?c=$Tnx,uu[w,a]waclyyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
Optionking: GOOG and AOL
The possibility of GOOG buying a piece of AOL wasn't even part of my consciousness when I looked at the charts. There could still be one more rally in GOOG to get the price up so fewer GOOG shares will be needed to buy part of AOL. The day GOOG does make an offer I fully expect GOOG shares to sell off.
We'll see.
Bond Yields Rally
The past 2 months on the bond yield charts show a potential series on elliott wave 1-2 of several degrees. This portends a yield spike and credit choke. This is being driven more by the fear of default than inflation. If 10yr yields break 4.90%, LOOK OUT!!! The bond market will be crashing, as well as the stock market.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
GOOG ROLLOVER CONTINUES.
The trajectory for GOOG looks like a $25 drop by next Friday. The bollinger bands are just starting to open, so several more days of selling are due. Due to the gentleness of this rollover very few are suspecting a drop in the next couple of days.
http://stockcharts.com/def/servlet/SC.web?c=goog,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
AAPL Bubble Over
Larger Wave 5 in AAPL started in march '03. The next smaller wave 5 started in may '05. Both degrees of wave 5 ended LAST WEEK!!! Another tech company's bubble is bursting.
http://stockcharts.com/def/servlet/SC.web?c=aapl,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
GOOG Rollover - Short It!
Bollinger bands pinched hard and now opening to accomodate more volatility, Price crossed into lower band and lower band dropping faster, both bearish. There is stillplenty of room for the stochastics to fall before reaching oversold territory. MACD rolled over and gave a sell signal a couple weeks ago.
Ewaves indicate the last few weeks have been and ending diagonal that truncated. The price should drop rapidly from this point.
http://stockcharts.com/def/servlet/SC.web?c=goog,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
Double Trouble: FRE and FNM
FRE closed strongly up today. The high entered well into the previous wave 4 area. The price and structure support the beginning of a massive wave 3-3-3-3-3-3. A crash situation. There is still the possibility of a double zigzag to form. This is what I was expecting FNM to do since both were in wave 2's.
http://stockcharts.com/def/servlet/SC.web?c=fre,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
FNM couldn't muster the strength to retrace to $50. Bollinger bands are widening again with the price hugging the lower band. The MACD is in negative territory and looking to diverge negatively at a quicker pace.
http://stockcharts.com/def/servlet/SC.web?c=FNM,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
Folks, This is as close to the edge as you want to get. It will be painfully obvious that FRE and FNM are crashing. Go your bank and take out whatever cash you can. I'm fairly sure the entire banking system will be collateral carnage when FRE and FNM file for bankruptcy.
SPX Waves and Frequencies
Best wave count has April's low as the beginning of an ending diagnonal. Today could have finished a wave D triange.
The frequency over oscilation is speeding up. This week should mark the low from which a norrow trading range wil climb to a new 52 week high near the end of the year.
Waves and Cycles in synch.
http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]dacayyay[de][pb50!d20,2!f][vc60][iLp14,3,3!L...
GOOG - More Upside
Today's trading was too close to the 52 week high for a small wave 2 retracement of small wave 1 down. Keeping an eye on this one.
Oil Ready To Gush
Hurst or not, a triangle wave has formed at some degree. Triangles in commodities generally lead to explosive moves to the upside. Bollinger bands are pinching. This means a dramatic price change is in store. The MACD is near neutral with a slight upward bias. This is a great indiator of a consolidation before a move to the upside.
http://stockcharts.com/def/servlet/SC.web?c=$wtic,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
LEN Funnymentals:
With the approaches of Katrina and Rita a LEN speculator would drive the price UP. The charts showed just the opposite. After Katrina hit LEN did rise, but the next sell off more than erased those gains. The post Rita rally has had quite a delay in any rally attempt. Neither situation shows support for the idea that these hurricanes will help LEN share price.
There is still the possibility of a larger degree Wave 5 to unfold in LEN. A drop from $68.70 to $53.34 in less than 2 months in a sector that has been one of the leaders is signaling much more long term selling. A 20% drop in 2 months compounds to more than a 100% annual loss.
FRE starts 3 weeks on a wave 2
http://stockcharts.com/def/servlet/SC.web?c=Fre,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
FNM is probably in the wave 2 of 3 of 3 of 3 of 3. The 10% drop yesterday looks more like it finished a smaller wave 5, and not the start of all those wave 3's. %50 target is now back in play.
WMT poised for a bounce back (very small wave 2) to $45-$46 before it shares get discounted more than its merchadise (Several degrees of wave 3's unfolding).
http://stockcharts.com/def/servlet/SC.web?c=wmt,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
GOOG Top definitely in.
Today's pullback was a small wave 3 of the larger wave 1 down. There is still some downside left of the larger wave 1 down before a wave 2 bounce occurs. Get ready to short the top of the wave 2 bounce or buy puts at that time.
http://stockcharts.com/def/servlet/SC.web?c=goog,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!L...
FNM CRASH IN PROGRESS
The bounce back to $50 I was calling for ain't gonna happen. FNM is in a wave 3-3-3-3 expect gaps to the downside, and the rest of the market to follow.
http://stockcharts.com/def/servlet/SC.web?c=fnm,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
Playing the Popping Housing Bubble.
Lennar (LEN) has topped and is in a corrective wave 2. So far LEN has formed a larger wave 1-2 and smaller wave 1-2 sequence. The next major downturn will drop the price more than $15 before support is found. That's going to be a nice 20 to 30% return in a matter of a months time.
http://stockcharts.com/def/servlet/SC.web?c=len,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
Read most of Hurst Profit Magic Book.
It wasn't clear how to form channels, but the use of moving averages was very helpful. I tried finding some of the larger cycles. How did I do?
6 year topped in Early 2000, and is topping now
12 year lasted about 14 years and topped in November/ December 2001, and is about to drop fast.
It looks like the shorter term cycles since Spring '03 are shortening. Longer term cycles now dominate.
My conclusion is a little down, then meandering rally to the years end, followed by a selloff/ crash over the next 1 to 2 years.
GOOG top is in.
Today was definitely a reversal day. The opening spike was not sustainable, and the close was for a loss. The elliott wave count looks complete. There is a chance the markets may have a 2 week rally in which case GOOG could have a wave 5 extension. Short GOOG when it falls below $300, the area where the rally of the past 6-7 days began. It would negate the wave 5 extension possibility.
Withdraw Cash From Bank:
I'm telling you the banks are short on currency. Just like buying stocks, if you want to acquire a relatively large amount, you break up the order so as not to generate demand, and fast enough before the once in a lifetime opportunity takes place.
EWAVE Scream GOOG top.
Only a couple of points higher and GOOG will have made its top.
IBM, GE, WMT, UTX, LMT look like they are just starting multiweek wave 3. The market is rolling over. Stay away from tall buildings.
Withdraw what cash you can from the bank. This weekend I asked for $5K and the teller gave me a dirty look, "You need to call ahead if you want to withdraw large sume of money." I agreed as she counted the cash. Theoretically there is supposed to be at least 1% of deposits kept in reserve. I hardly believe my bank only has $500K in deposits. If a run on the bank by one person can cause pressure on a bank, then think how badly the situation will be when numbers swell to thousands of people showing up unannounced to withdraw $5K apiece!!!
I've found Mchugh's forecasts better than Prechter's over the last 2 years
I'm seeing the same thing as McHugh, but based on FNM.
It has 4 degrees of elliott wave 1-2s. It is wound up for a crash as indicated by lower highs and lower lows. I would expect a 2 week rally above $50 to complete wave 2 of the smallest degree wave 1-2 pair. Then wave 3-3-3-3 is unleashed, a convincing crash below $40.
http://stockcharts.com/def/servlet/SC.web?c=FNM,uu[w,a]dacayyay[de][pb50!d20,2!f][vc60][iLp14,3,3!La....
Started reading Hurst's "Profit Magic"
So far I like it, and understand it. It didn't take me long to map Elliott wave 3's to the part of the Hurst cycle crossing zero. Hurst cycle and Elliott waves have 12 or 13 degrees of trend. Both are based on human psychology: Hurst refers to "motivation" while Prechter refers to "social mood". I'm impressed with the possibility of 90% accuracy. For an engineer like me, that is a sufficient "proof of concept" I still have much more to read, and will reread as board members have suggested. Give me a month to fully digest and apply the concepts before I post Elliott-Cycles or Hurst-Wave weekly updates.
Bliss: Program Trading
It could be those options were a program trade. The percentage of trades made by programs has grown since Y2K, yet total market volume of share has declined. People are doing less trading. The market is running more and more on autopilot. Systems break when machines compete against machines. This info I found on Elliott Wave Intl. They do a great job reporting changes of this nature. Unfortunately it's not at your fingertips when you want to provide links.
OptionKing: GOOG Target
I'm really looking for a structure more than a price when using elliott wave theory. Fibonacci ratios often accompany elliott waves in time and price. Using fibonacci ratios I get an initial target around $315. The rally could just make new highs and then reverse. Another possibility is a parabolic trajectory for wave 5. Last week's rally was kind of sharp for a wave 3 and gives the larger wave 5 aparabolic look. No upside target is available because wave 5 can extend unbounded.
Don't Buy!
Sell at $315, or when the price drops below $290.
Hold while the price is between $290 and $315.
Don't $hort ju$t yet.
GE Wave count
$37 was the bear market top (WAVE B).
WAVE C has started
Daily Wave 1 down May high to June low
Daily Wave 2 FLAT June low to this week. The flat has completed.
Daily Wave 3 has started. This is a great time to initiate a short position, especially now that airline companies DAL and NWAC have gone/going into bankruptcy. Fewer aircraft engines will be sold.
http://stockcharts.com/def/servlet/SC.web?c=ge,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La1....
GOOG started last wave 4 today.
Probably a zig of a zigzag. 2 to 3 more days of consolidation before the wave 5 tests all-time highs. Get ready to short this one because it will be a strong selloff like Y2K tech crash.
http://stockcharts.com/def/servlet/SC.web?c=goog,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L...
Bad Omen in the Amex
The low of yesterday is a huge crash.
http://stockcharts.com/def/servlet/SC.web?c=$XAX,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
The small wave 5 from late August '05 lows looks complete
The wave 5 from the April '05 low looks complete.
The wave of the Oct '02 low looks complete.
http://stockcharts.com/def/servlet/SC.web?c=$XAX,uu[w,a]dacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
Be on guard for confirmation of a top in the AMEX
DAX drops from top
The wave from the late April '05 lows look like a complete motive elliott wave. Chances are this is the end of the Bear market rally. The 3 advances segment from the April '05 lows are progressively shorter. Wave 3 cannot be the shortest wave of the sequence. With Wave 1 > Wave 3, Wave 5 is limited to the 5270 area.
The 3yr chart shows a complete double zigzag correction. The micro and macro are supporting each other. Look out below!!! Under the Europen Commercial Union participating governments are limited to the amount of debt they may take on, so I doubt a plunge protection team exists in Europe.
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
There is an outside chance of just starting a wave 3 of 3 advance of a blow off top in the zag of the zag.
http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
GOOG and AMZN have another week or so left in Wave 5 of larger WAVE 5 to the upside. They are still in smaller wave 3, so a scalp is possible and small wave 4 drop will limit downside losses until smaller wave 5 completes. Then reverse gears and go short.
Bliss: Glad I didn't buy it.
It's the Profit Magic book.
I didn't buy the full course, even though Amazon is selling it at $500, 1/2 off.
Airdale: Initial Jobless claims cycles.
Next weekend I'm going to take delivery on the Hurst Cycle books, and be able to chart any data on Excel. I had a whole bunch of data from the BLS website, but lost confidence in the accuracy of the data as previous months kept being revised.
I was just interested to see how quickly someone could apply hurst analysis.
When I read the Hurst book, I'm hoping to find a link between cycles and e-waves. Knowing expected time projections and price projections is key to risk reduction/ profit maximization in speculation.
Help on Cycles for Jobless Claims
What are the cycles predicting for the monthly Initial Jobless Claims chart?
http://www.bullandbearwise.com/InitialJoblessChart.asp
German DAX and US AMEX Broke 52 week highs.
DAX has maybe another week of upside to complete smaller waves 4 and 5 of this terminal 5
The AMEX could have finished its terminal 5 today. Channeling from the late August lows looks perfect.
The FTSE is lagging the DAX.
Other US markets are lagging Europe. Truncation is a possibility.
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
Global Markets
They all look like they will rally another week or two. They are all in late stages of their elliott waves. Not much upside left. Wait to short.