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GE ready to drop, AGAIN
I propose a distorted zigzag off Friday's lows. Today's opening was not as strong as Friday's bounce off the lows. There are nearly perfect fibonacci ratios of 61.8% price and 50% time that the zag from yesterday's close to today's close make with the full zigzag.
http://charts.barchart.com/chart.asp?sym=ge&data=Z05&date=062805&den=HIGH&evnt=ADV&a....
there is a larger fib ratio in price. The zizag makes a 38% retracement of the wave 1 from June 17 highs to June 24 lows.
http://charts.barchart.com/chart.asp?sym=GE&data=Z15&date=062805&den=HIGH&evnt=ADV&a...
With a multi dollar selloff looming, forget about going long. If you are currently long, sell if the price breaks out of $34.50 to $35.50 range. A safer short entry point would be the opening. Upside is limited. There is still the possibility of a double zigzag or flat, so breaking below Fridays lows still is not confirmation. Tomorrow should be generally down.
38.2% Targets Reached!!!
I underestimated the retracement levels by a very small amount for all 3 indexes. This corrective move was a zigzag. The corrective move may not be finished. There is a still the possibility of a double zigzag ending at a 50 or 61.8% retracement, or flat that breaks below Monday's low only to rally hard for Our Pal Al on Thursday. Either way, tomorrow should be down.
GOOG increases the likelihood small wave 3 begins tomorrow. GOOG finished its rally to alltime highs today and the wave count looks prime for a reversal. GOOG is a bubble echo from the dot-com days. The euphoria levels are concentrated only with GOOG, not the other tech companies, so its one of the key indicators of a market top.
Market Bounce Due:
First upsite targets are the fibonacci 38.2% retracements based on a small 4 day wave one ending on the lows of today.
Dow to 10405
spx to 1198
naz to 2065
Cover, but don't go long. Just get ready to position for next dowwnside ride. Use the time to transfer money.
DOW Industrials Quick Analysis:
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
The DJIA selloff retraced several weeks in just 3 days. Stochastics indicate there are a few more days of downside left. Bollinger bands blossomed with the price breaking below the lower band, indicating sideways movement to get back into the bands. Daily MACD gave a sell signal and momentum should carry it lower over the following days. At the intraday level, the there was a small wave on Thursday 6/23, Friday 6/24 looks to be a slowing of momentum characteristic of a waves 4 and 5. Not certain if a smaller wave 5 is done or not. Early next week small wave 5 complete followed by a bounce of 2 to 3 days. The bounce would be a set up very similar to July 4, 2002, a fibonacci 3 years ago when the DJIA rallied extremely hard (400-500 pts) around the 4th of July just before a multiweek selloff of 2000 pts into the August 2002 lows.
The global markets look to have made the reverse with the DJIA. Consistantt with the idea the DJIA was weakest to rally, it has become the leader to the downside. I finally found a chart for the Shanghai Composite and weas surprised to find it down 50% over 4 years and trending toward more lows. It looks like it is about to drop in a wave 3-3-3 any moment.
This sounds like a trend reversal to me. Short weak Dow components or tech equities above $5.
Profit during the sell off.
Financial Sense Interviews Prechter:
As much as I was tired of Prechter planting a flag at each market high and declaring a top, this interview is a much more comprehensive analysis. It's a good place for market technicians of all skill levels to get a reknown expert's opinion.
Audio
http://www.financialsense.com/Experts/2005/Prechter.html
Transcript
http://www.financialsense.com/transcriptions/Prechter2005.html
Charts
http://www.financialsense.com/fsn/061805charts.html
TOP IS IN. MELTDOWN TIME!!!
US markets gave sell signals in terms of e-waves, candlesticks, and stochastics. E-waves, Bollinger bands, and stochastics indicate there is still a lot of downside left.
UTX and GE were two of the last Dow components to top out. They have retraced enough of preveious wave e to convince me there is no more new 52 week highs left.
The IBM trade I alerted the board to a couple of days ago has a ways to go still. Even though my e-wave count has this sudden price drop as a wave 5 after a trinagle with a target of $70, a general market selloff could drop IBM much lower. IBM would then bound as the market makes a small recovery rally.
GM is starting to gather steam to the downside and Kirk Kerkorian will introduce another animal to Wall St: THE GOAT. GMs 52 week lows will be taken out within 1 year. Are there any opitions on Kerkorian's expiration date?
Bliss: OIL I Fully Agree. eom
BLISS: IBM
A gap up and island reversal isn't in the cards using e-waves. I could agree with clawing a little higher in wave e. Today IBM completed a daytrade triangle so one more little rally is left and should break the upper edge of the triangle briefly before falling.
There is a more bullish corrective count. It's a zigzag correction and zig is connected to zag by a triangle. This is what happened with WalMart WMT. This more bullish corrective count has a much more severe downside. If a triangle has not been developing over the past 3 months, this is not a larger multiday wave 4, but a smaller multiday wave 2. The implies the next larger wave down is most likely NOT a larger multiday wave 5, but a wave 1 or wave 3 of a larger extending wave.
Now the profit potential has increased significantly as the target is well below the $70 area I estimated based on the ave 4 triangle. Oh yeah, Short WMT too.
DJI daytrade triangle
Dow Jones Industrial looks to have completed a triangle that started Friday morning. Whatever the rally tomorrow morning and maybe into Thursday, it should be the last before some sort of profit taking occurs.
http://finance.yahoo.com/q/bc?s=%5EDJI&t=5d
Bliss: I'm still in Prechter Detox ;)
I started to really think for myself after I cancelled my Short Term Update at Elliott Wave Intl in March '05'. One article on SaveHaven.com indicated Prechter is calling the March '05 high THE top. Since mid May '05 I started considering an ending diagonal in the US markets since the Fibonacci time/price ratios didn't look good.
Meltup is more accurate for what the DAX and FTSE have done as they lead the world markets. The rest of the world markets are technically weaker and that's why the DJW is not confirming the DAX and FTSE breakout. Try applying some of the Dow theory to the global markets.
Think systemically in your analysis and how conflicting technical signals can be resolved.
Short IBM.
IBM is definitely tracing out a wave 4 symmetric triangle. Since the price is closer to the upper edge of the triangle, there is little risk to the upside when shorting. The gain shorting is 10% based on the $7.64 drop in January '05 which was a wave 1, and estimating wave 5 = wave 1. Also, wave 5's following trinagle drop the span of the triangle very quickly. This triangle spans $6.24, which is in the ballpark of $7.64. Target price is $70.00
Since the selloff will be a wave 5, a larger wave 2 will most likely take the price back to the $77 area. Take a little shorting and wait for the bounce. If you miss teh opty for this 1-2 punch, you can still hold the short position into the much more profitable larger wave 3 without a great risk pf the price going above $80.
http://stockcharts.com/def/servlet/SC.web?c=IBM,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!La...
BLISS: DJW
http://stockcharts.com/def/servlet/SC.web?c=$djw,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L....
From mid April '05 to early June '05 it looks like a leading diagonal. That could be a wave 1 of a major rally or Wave a of a zigzag. The clue is the a clear triangle in teh first half of June '05. That means the second half of June '05 is the last wave in a rally. Blow off top indicated by the index trading above the Bollinger bands
STochastics are EXTREMELY overbought, the signal fell below the refernce and a SELL should be confirmed when both reference and signalfalls below the 80% level.
MACD Histogram is flattening out, indicating momentum is slowing down.
Start putting on your parachute. The plane is about to fall from the sky.
Bliss: please provide analysis.
I see DJW as having finished Bear rally '03 with a zigzag, and
being in a wave 2 up near in the early stages of Bear '05
German DAX update
6 Month Chart:
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
3 Year Chart:
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
My previous comments about the DAX 3 weeks ago continue to be validated. Here's the update:
The DAX is nearly finished a convincing double zigzag bear market rally out of the March '03 lows. The second zigzag pushed slightly above 4623 this week. This is nearly a perfect Fibonacci Zig to Zag ratio of 2. There is also a Fibonacci ratio in time; the zig and zag are both about 45 weeks long, with the zag slightly shorter. Zooming in on wave c of the zag shows a nearly finished 5 waves up from the April '05 lows. One more week should finish 5 of 5 of c of zag.
At a larger degree, there are Fibonacci price and time ratios of the Y2k selloff to the bear market rally. The price ratio is bear rally = 40% of Y2K bear market bubble pop. This pretty close to a fibonacci 38.2%. The time ratio is bear rally = 77.7% of Y2K bear market bubble pop. This is pretty close to a fibonacci 78.6% (= .618 x .618)
Other techincal indicators support a turn in the near future.
The daily stochastics have been overbought for a month and are falling below the 80% line (SELL) and the signal fell below the reference (SELL). The weekly stochastics reached overbought levels about 3 weeks ago and the signal looks to be dropping below the reference. The long and short term stochastics are indicating the DAX heads lower very soon.
The daily MACD signal has turned lower and is about to cross below the reference (SELL). Over the past 3 years the weekly stochastics have been giving false buy signals near major market turns. This time should be no different. It is interesting to note the weekly MACD has formed a 3 yerar symmetric triangle and is wrapping up wave e.
Daily Bollinger bands pinched this week and are opening wider. This indicates a big move is about to occur. This is the second pinch since the move off the April '05 lows. Pinches occur when the market consolidates and and becomes less volatile such as wave 2's and 4's. So in this situation the first pinch maps to wave 2, and the second pinch maps to a wave 4 of a motive elliott wave. The wave principle take precedence over bollinger bands. Through May '05 the DAX kept breaking the upper band in a steady climb higher. This maps to a wave 3. So the near term bollinger bands are calling for a possible wave 5 (maybe a daytrade long, definitely a long term SELL). As the bands widen,
the lower band will become support for the DAX as it heads lower. You can see there is a 200 pt difference already, so the pullback should be of a larger order than the April '05 rally. The Weekly bollinger bands have been opening for several weeks now. The DAX has broken the upper bands the past 4 consecutive weeks on weekly gains. This NEVER happened since the '03 Bear market rally began. It represents a market blowoff.
These Elliott wave structures, fibonacci ratios, and other technical indicators are giving strong signals a market top is near, and an extremely strong move to the downside is imminent. I estimate the top will be in place within 2 weeks as time and price converge a little more.
The basic analysis applies to the FTSE. However, the DJIA, SP500, NASDAQ, Nikkei, and Hang Seng look more like a triangle or ending diagonal of a flat. The Nikkei, Hang Seng, NASDAQ, DJIA, and SP500 have not confirmed the DAX rally. The US markets are trying to rally to avoid truncation. The Nikkei looks to have started its Bear Market '05 while the Hang Seng is in waves d, e or Bear '05. Too difficult to tell.
Technically the European markets have been the strongest, the US markets in the middle, and the Asian markets are the weakest. This is quite a contrast to the reports of European economy being the worst, the US economy being firm, and Japan/Taiwan being in the middle.
The cliff is close. One more step and down you fall.
DJIA and SPX little ending diagonal.
The markets are ready to make a turn as indicated by the choppy advance the last 2 weeks.
Stochastics are near overbought without having dropped into deep oversold.
Bollinger bands are pinching close, indicating a BIG move is coming. Buy straddle options.
MACD has turned up, but ever so slowly. A bull trap buy signal.
The markets are converging to a turning point.
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!...
GM about to turn lower.
Fibonacci ratios and e-waves are looking text book.
GM nearly finished a zigzag consolidation.
50% rally from 52 week lows
38.2% retracement of Dec '04 high
And as far as what happens to GM happens for the larger markets, the DOW and SPX are showing a vey choppy rally over the last 5-9 days. It's either a downside move to complete a longer consolidation, or it's ending diagonal + truncation.
The German DAX and london FTSE reversed sharply today as the US markets inched higher. The next wave of fear is showing stronger signs in Europe.
http://stockcharts.com/def/servlet/SC.web?c=$FTSE,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!...
No Change: Markets Still Topping
None of the US markets have confirmed newe highs in the DAX. Worse yet, the US markets are not in synch with the DAX making new rally highs from the April '05 lows. This is a very bearish divergence that has been going on for a couple weeks.
Bonds are showing signs of a major long term sell off. I'm looking for a higher degree of Elliott wave to confirm a reversal.
I will be off line for the next week or two.
WMT Short Opportunity
WMT is near the end of a triangle, most likely a wave 4. The downside target is below $46. This should be a fairly quick move. Followed by a reversal back to the $48 area.
http://stockcharts.com/def/servlet/SC.web?c=wmt,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La...
BLISS: TREN
Those charts show a textbook case of a triangle. Wave e of the triangle is also a triangle. The explosive move that followed might be about half over. The chart has gone vertical, probably in a wave 3 of 5, or wave 5 of 5 if an extended wave. Sell 25% of holdings and place stops at $1.75.
SAP500 Intraday Trinagle?
Yesterday's drop from the Noon to the close looks like a motive wave. From the opening bell today something very triangular has formed. It doesn't make sense that a triangle occurs in a wave 2 position. This creates two wave counts.
1.) The triangle is wave b of a zigzag correction.
2.) It's not technically a triangle, be a complex wave 2 correction.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=SP500&sid=3377
DJIA Sell signals
Daily Stochastics dropped below the 80% levels after the signal crossed the reference. The MACD histogram has been heading much lower to the point where it's about to go negative. Momentum has slowed and about to go into reverse. Relatively, the bollinger bands are now expanding, signalling a dramatic price change. The upper band is flattening to limit upside movement. The lower band is flat and rolling over, removing support to the downside.
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La...
GOOG To Retest $300
GOOG made a larger intraday (Wave 4) triangle yesterday, so today there will be a rally retesting $300. This rally should be like yesterday morning's spike higher, followed by a move to the downside.
Sell if GOOG rises above $300 or falls below $290.
Short if GOOG drops below $285.
Perfect Storm
Multimonth Triangle/Ending Diagonal
Multiday Truncation
Multiday Extension -NAZ only
Multihour truncation - DJIA only
These wave patterns are in play for the DJIA, SPX and NAZ. They all imply the initial stages of the trend change will be sharp. A sharp drop will be hard to trade, and getting caught on the wrong side can be painful.
SELL!!!
30 yr Tsy and 10 yr Tsy divergence
30 Yr Tsy is very close to making a new multiyear low, but the 10 Yr Tsy has a ways to go. Both have shown more of a ZigZag since May/June '04 than motive waves.
http://stockcharts.com/def/servlet/SC.web?c=$TYX,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
http://stockcharts.com/def/servlet/SC.web?c=$Tnx,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
BOND MELTDOWN is imminent.
German DAX new 52 week high
US markets are not confirming the DAX breakout.
I heard on one of the late night news channels that Italy was considering dumping the Euro and going back to the Lira. It will most likely happen, but not for at least 2 years. More noise is always made before the public generates enough support for the idea to be implemented.
BLISS: Cover GOOG short, Melt-up
Today looks like a wave 3 in the parabola. The minimum upside is $313 based on fibonacci ratio wave 3 = 1.612 * wave 1.
The markets are acting like a melt-up in terms of stochastics, but the volume and momentum don't suppport it. The US market indexes should have made new 52 week highs if this were a serious meltup.
Global and US stock markets Near Top.
=== DAX ===
http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
The German DAX rallied hard to make another bear market high this week to 4551.89. This is a handfull of points above a perfect Fibonacci retracement of 38.2% to 4523. The Elliott wave count for the bear market rally from March '03 can be counted as two-double zigzags or a triangle. Both wave counts indicate a top; however, the two-double zizags count matches up with Fibonacci ratios. Each double zigzag has taken nearly equal time (10.5 months/ 43 weeks) to complete. The second double zigzag covered a little less than half the move in terms of point as the first double zigzag. Each double zigzag has well formed trend channels. On the daily chart, the stochastics have been in overbought territory for the last 2 weeks. The MACD has shot up. The MACD difference was diverging with price highs, a sign at least the May '05 rally is nearly over. Long term upside is limited. Look for selling pressure to start.
=== FTSE ===
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!...
The London FTSE made a choppy rally (probably and ending diagonal this week to 5016.6 in an effort to retest bear market highs. There are two Elliott wave counts for the bear market rally from March '03. The first count (Bearish) is the bear market rally ended in Feb '05 at 5077.8. The fibonacci time ratio is 0.5 and price ratio is just short of 0.62 at 0.588. The May '05 rally can be counted as a multiday Wave 2 zigzag that has retraced 80% (78.6% is fibonacci). The second count (Bullish) is two-complex waves joined by a Wave X triangle in mid 2004. Time and price do not form Fibonacci ratios at this time. Fibonacci ratios are approaching 0.786 for time and 0.618 for price. This gives the FTSE another 3-4 weeks to break the Feb '05 high of 5077.8. For this scenario to work out, the FTSE will have to drop sharply and spike to new bear highs. Regardless of the wave count chosen, other technical indicators are signalling a selloff. On the daily chart, the stochastics have been in overbought territory for the last 2 weeks. The MACD is flattening and about to give a sell signal. The MACD difference was diverging with price highs, a sign at least the May '05 rally is nearly over. Long term upside is limited. Look for selling pressure to start. A drop below 4820 would be a strong indicator a new bear market is underway. A drop below 4773 would confirm the new bear market.
=== NIKKEI ===
http://stockcharts.com/def/servlet/SC.web?c=$nikk,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!...
The best Elliott wave count for Nikkei indicates the bear rally from April '03 lows to April '05 highs was a triangle. It took a Fibonacci 3 years to complete. Wave 5 of the triangle was an ending diagonal that truncated. Wave 5 of the ending diagonal also truncated. The swift selloff is a characteristic following an ending diagonal or truncation. The rally from the April '05 lows has been very choppy and retraced a little more than a fibonacci 0.50. Other technical indicators are signalling a selloff. The price bounced off the upper bollinger band and the 50 DMA. Bollinger bands continue to widen in anticipation of a dramatic price move. The Stocastics are overbought and the signal has crossed below the reference (SELL). Both signal and reference are poised to fall below the 80% line, another sell indicator. Tha MACD difference is starting a downtrend, signalling waning momentum even as the MACD is still pointing higher. Look for continued long term selling pressure. First target for wave 3 is 9550, where wave 3 = 1.618 x wave 1. It gets worse from there. The drop from 11975 has signalled a new bear market is underway. A drop below 10700 would confirm the new bear market.
=== Hang Seng ===
http://stockcharts.com/def/servlet/SC.web?c=$hsi,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
The Hang Seng topped out in Mid Y2K. Since then Bear A wave took the HSI down to 8894 after 9/11/01. The bear market rally took shape as an expanding flat. Presently the HSI is finishing the Wave C (ending diagonal) of the expanding flat that started in April '03. The end date of the ending diagonal's wave 4 is debatable. If wave d ended in mid April '05, then wave 5 (zigzag) is close to done with possible truncation at 2 degrees of waves. If wave 4 ended in late May'05, then wave 5 is in the zig of a zigzag with more rally left. Further support of a turning point is a fibonacci time ratio of Bear A = 38.3% Flat. The price ratio is about 400 points short of a fibonacci 62% retracement. MACD is giving a buy signal as the signal crosses above the reference and both are crossing the 0.0 level. MACD difference is still pointing higher to indicate upside potential. The stochastics are in neutral territory, and the signal is about to cross the reference (SELL). A drop below 13541 would be a strong indicator a new bear market is underway.
A drop below 13100 would confirm the new bear market.
=== SPX ===
http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
The SPX has probably wrapped up a Wave B triangle that started in March '03. From the mid April '05 lows it is possible to count a double zigzag. A double zigzag indicates the bear market rally is structurally complete. The bullish wave count is selloff followed by another double zigzag to make new highs. The bearish wave count is the start the second bear market from a truncated rally. This implies a very strong selloff started Friday. Stochastics have been overbought for the last 2 weeks after a false sell signal. MACD has been rallying and is about to roll over. The Volume and MACD difference declined the past two weeks as the price made a choppy advance, a divergence signalling a selloff. I'm looking at every angle to find fibonacci ratios, but am having difficulties. A drop below 1136 would be a strong indicator a new bear market is underway. A drop below 1060 would confirm the new bear market.
=== DJIA ===
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!...
The DJIA is in a slightly different situation as the SPX. It is debatable if the DJIA is in a Wave 5 (ending diagonal Bull mkt count) or Wave B (triangle Bear mkt count) that started in April '03 because the DJIA only fell 38.6% from y2K highs and came relatively close to making a new alltime high with a 78 retracement. A drop below 10000 would be a strong indicator a new bear market is underway. A drop below 9700 would confirm the new bear market.
=== NASDAQ ===
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3...
The Nasdaq looks like its in a nearly complete Bear rally triangle. The rally off the April '05 low does not look like a zogzag, so there may be a near term pullback for a week and then one last rally. The alternate count is the rally off the April '05 low is a complete wave e zigzag that truncated. A move below 1900 would be a strong signal Bear 2 has begun,
=== AMEX ===
http://stockcharts.com/def/servlet/SC.web?c=$xax,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L...
The AMEX was the lone US stock index that has rallied above y2k highs. It netted a whopping 40%!!! Multi month wave 5 started in early '03 and may have ended in March '05. The wave pattern between the March '05 high and April '05 low is difficult to read. The waves out of the April '05 low look like a double zigzag that has retraced 74.4%, nearly a fibonacci 78.6% It doesn't make sense that the only US index that made a post y2k high be the first market to turn. Generally weaker stocks in a rally are the leaders in to the downside.
=== Summary ===
The HSI is exhibiting textbook elliott waves. This gives me great confidence the other world markets are very close to their tops. In several markets fibonacci ratios occur in both price and time. Some markets may be / have truncated, or topped out already. Upside is limited, and the selling pressure is growing.
The FTSE, NIKK, AMEX, SPX, DJIA, HSI are NOT confiming the breakout in the DAX.
Lunch wager:
I should get in on this bet. I need a double honey ;)
Bliss: GOOG
This afternoon was a triangle. I don't know if it is a wave 4 in a new bear market, or a wave b in a bull correction. Either way there is still more downside before a retest of all time highs.
Peg: Supt Brkdwn, 10 yr TSY, GOOG.
I agree the DJIA, SP, and NAZ fell hard today. intraday support lines have been broken. That last push higher may be in jeopardy now.
I've been following GOOG this week and thought it would break $300 before topping. If not, GOOG has and extended Larger Wave 5 and truncated smaller wave 5. Both indicate a $30 dollar selloff. This would be a crash event since GOOG was the last dotcom to top.
I also think the 10 yr TSY has another rally left. This 2% swing in todays price may be a small wave 2 of a larger 3 of 3 of 3. Any failure of bonds to rally would imply a long term truncation took place and a bond market crash is in the works.
Who's watching 10 yr Tsy bonds.
There has been a nice breakout of a multi year triangle in the 10 yr Tsy. The media is treating it like chopped liver. It is turning out to be a very strong rally to retest 5 year lows as expected using elliott wave guidelines.
I'm interpreting this bond rally as a leading indicator of a major shift toward risk aversion in stocks.
Markets make choppy advance.
I think this is an ending diagonal over the past 5-10 days.
The upper trend line of the rally off the April '05 lows is fairly strong resistance.
http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L...
Ford- A good short Candidate
Ford has nearly completed a wave 4 Triangle. Wave 5 down should be a quick drop to the $9 area for a minimal 10% gain.
60 Min Ticks
http://charts.barchart.com/chart.asp?sym=f&data=Z60&date=060205&den=HIGH&evnt=ADV&am...
Daily Ticks
http://stockcharts.com/def/servlet/SC.web?c=F,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La12...
Re: Prechter
I cancelled my subscription because the short term forecasts were inaccurate. I would have to say my forecasts are no better or worse, so I should start my own investment news letter.
I see a great value in Prechters work on Socionomics. Those forecasts are coming true:
1.) increased gov't control
2.) discord
3.) surge in horror movies
4.) increased trade barriers / import taxes
Lexus: GOOG
My technical comments this weekend about GOOG being near a major tuning point have been confirmed by analysts raising their targets to $350. This is pure excitement. GOOG has a stratospheric PE of 109.59. That implies GOOG is 200% overpriced. PE of 33 is about the historic limit for tech. You would be better off buying 2 yr Treasury bonds. This smells like Y2K all over again. Resist the urge to buy long. Wait for a very sharp pullback on GOOG before shorting.
Very Close To The Top.
The German DAX is the best candidate for examination as its bear rally is very close (~50 pts) to a Fibonacci 38.2% retracement with the first Bear leg that began in Y2K. This latest wave from the April '05 Lows looks like a nearly motive wave.
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L....
The DJIA has a 78.6% Fib retracement at 10974, and just went over that mark in March '05 at 10984. That does not leave much upside potential if the DJIA is in Bear Wave B5 triangle or a BULL Wave 5 of 5 ending diagonal from the March '03 Lows.
The SPX has a 61.8% Fib retracement at 1237, and nearly missed it in March '05 at 1229. That does not leave much upside potential if the SPX is in Bear Wave B5 triangle or a BULL Wave 5 of 5 ending diagonal from the October '02 Lows.
The NAZ has a 23.6% Fib retracement at 2212, and nearly missed it in Jan '05 at 2191. That does not leave much upside potential since the NAZ is in Bear Wave B5 triangle from the March '03 Lows or it has already topped out.
I realize I'm using different start dates for the 2.5 year rally. This gives the best fibonacci relations, and shows how ALL markets are set to turn lower in the near future. This next turn is so major that all stocks will be affected.
Bliss: GOOG
The trouble with applying Ewaves to IPOs such as GOOG is that the first couple months you don't know what large degreee wave to begin with. My assumption is GOOG started somewhere in a large degree Wave 3. It looks like Wave 4 took place somewhere between Dec '04 to Mar '05. Now GOOG should be in a large degree Wave 5 that is nearly complete. Looking at EBAY and AMZN, I see neither are anywhere close to making new alltime highs like GOOG has/ is doing. This is a technical divergence. From the E-wave point of view, GOOG is in a Large BULL Wave 5 and EBAY is in a Large BEAR Wave 2 or B. Those are the warning signs I'm seeing. There is about to be a huge trend change in the market in the coming days.
http://stockcharts.com/def/servlet/SC.web?c=GOOG,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!L...
GOOG: Parabolic Blowoff Top.
It's too dangerous to try to trade GOOG as it is in parabolic mode. I think there is still some more upside to go, but not enough long term price data do determine how high the spike will go. EBAY, another dotcom, is not confirming GOOG's breakout rally. In fact EBAHY dropped nearly 50% from highs in Late Dec '04/ Jan '05.
The best strategy would be to exit long positions. Wait for prices to fall back to the $200 level to confirm the top. Then enter a short after a 38% retracement of the first selling wave.
ARE WE THERE YET?!!!
I'll have an extra day this weekend and one trading session in Europe to see where things are going. Folk's, we've got to be close to topping since there have been no deep retracements in a couple weeks. The Stochastics are well into the overbought region, so I'm looking for some sort of pullback in the coming days.
German DAX Top
I count 5 waves up from the late April '05 lows. Today a new 52 week high was recorded. The DJIA, SAP500, and FTSE did not confirm this as a long term breakout. If my larger view of SAP500 and DJIA being in a wave 5 of a 3 year ending diagonal is correct, then it is also truncating. These are two indications of a strong reversal ahead.
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...