GM Stole The Show, Now The Curtain Call

GM was heavily shorted AFTER the spectacular drop in March '05. The premium Kerkorian was 10%, so GM's price should not have rallied 20%!!! The extra 10% was, I believe, from short covering. Remember, Kerkorian was not going to spend more than $31.50 per share. At a premarket price over $33, there is a great potential for GM's price to give up at least $1.50 over the next week.

A large elliott wave went from late Dec '04 to April '05. The rally off the April '05 lows was a normal countertrend move. There was a gap to the downside that might be closed before resuming the longer downtrend. This morning GM was upgraded, and premarket trading has the stock up 1.5%. This would be wave 5 of a Zag from the April low Zig-Zag rally.

The wave count and excessive premium by the market both signal a near term top.


http://stockcharts.com/def/servlet/SC.web?c=gm,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La1...

SP500 wave count update:

There are two equally valid wave counts for this correction. Wait to see what the opening brings. Sell if the price leaves the 1155 to 1165 range.

Bullish:
The price movement the last two days has been choppy. Yesterday's high indicates a 55% retracement of the mid April wave 1 of 3 down. This is between a fibonacci retracements of 50% and 62%, so the price should march higher to the 1170 level. This would be an incredible bull trap as investors would see the 1164 level of resistance being "clearly" broken.

The pattern unfolding the last 2 weeks pattern would best be counted as a double zigzag. Monday and tuesday of this week were the wave B of the larger Zag. That leaves the wave C of the Zag to complete today or tomorrow.


Bearish:
There is the possibility the post Greenspan surge was wave C of the Zag. Then the fibonacci ratio at play is Zig = Zag. Time wise, zig = zag, another indication of a turn close at hand.

http://charts.barchart.com/chart.asp?sym=$INX&data=Z15&date=050405&den=HIGH&evnt=ADV....

SAP is RED

Low of day has been broken.
There was nothing holding the post GreenSpan gains. This really looks like a Larger Wave 3 has begun.

Toppcats: Intraday wave 5 Push

Yup, intraday wave 5 unfolded this afternoon after intraday wave 4 took the SAP500 into the red. The DOW SP500 and NAZ intraday wave 5's look like they are nearly complete at the close. They may truncate as large wave 2 ZAGS.

One more push:

I'm looking for a quick shot in the SP500 to the 1164 level. The second half of the morning traced out a wave 4 triangle. wave 5 thrusts following wave 4 triangles tend to be very quick and just barely recapture the wave 4 consolidation. I'm anticipating a red afternoon.

Markets Pop and Drop

US futures hit levels that would conclude an Elliott Wave and indicate a reversal.

The German DAX shot higher today and is the ZAG I anticipate. I am still open to the possibility the ZAG will break higher than the ZIG of this WAVE 2 correction. WAVE 3 is about to begin very shortly.

Elliott Wave Counts by Robert McHugh

Since early March '05 McHugh began charging for his market forecasts. This week he posted his forecasts on SafeHaven.com to promote his services. My prefered wave count for the SAP500 is his alternate count. I agree fully with his count for the NAZ as a stairstepping of waves 1 and 2 of smaller and smaller degrees with all those wave 3's to unfold in the following weeks.


http://www.safehaven.com/article-2992.htm

BlissBull: Crazy Ideas

The idea the Chinese are recycling their profits from exports to the US by lending to US consumers was something I read recently on SafeHaven.com or FinancialSense.com. I tried to find the exact story where I read it, but couldn't. I generally save daily stories for later review.

Prechter expressed a similar idea when it comes to equities: buyers and sellers want prices to go higher. Only a rare few understand buyers eventually run out of the ability to bid prices higher.

"immediate effect"

If only the effect of revaluation were that mechanical. Don;t forget that Asians lend money to the US so comsumers will buy Asian products. If US consumers were to buy from other sources, then maybe there would be less incentive for Asians to lend money to US consumers. Does this sound like a good thing for US consumers?

GE: Elliott Wave Count

1 Year, Daily

http://stockcharts.com/def/servlet/SC.web?c=GE,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!La1....

I'm looking at a possible top in GE this weekend. There are two possible wave counts for an ending diagonal. Both indicate the top was at $36.60. Drawing a lower trendline connecting the bottoms of the dips over the last year indicates wave 5 ending diagonal broke below the line beginning in late Feb '05 at $34.90. This is where the price crawled higher with heavy overlapping.

10 Day, 15 minute

http://charts.barchart.com/chart.asp?sym=ge&data=Z15&date=043005&den=HIGH&evnt=ADV&a....

The price since the high of $36.60 on April 26 has traced out a fairly good motive elliott wave 1-1. Individual stocks often don't adhere strictly to elliott rules. The rally in the second half of April 29 counts as a wave 1-2. It has retraced 61.8%. If GE has completed its bear market rally, then wave 1-3 should drop quickly to $34.62 at a minimum. This is below the starting price of the previous wave 5 ending diagonal.

EOM

Still may be on more push up.

Tha past several days have been too choppy for any meaningful advance in the SPX. Bollinger bands are both pointing down, capping upside advance and removing downside support.

2 for 2

1.) 1164.8 was close enough to the 1163 level I called as a turning point.
2.) SAP 500 gapped down today asI called at yesterday's close.

These are the first steps in the drop I called for late last week. The downside SAP 500 will be 7% at a minimum.

SAP500 gaps down tomorrow.

There were several wave 1-2 sequences today. Now come waves 3 of 3 of 3. The lower edge of the triangular shaped consolidation over the last week is close to being broken.

The HOD retraced 50% of the last selloff.

Hasta la vista, sto-cky!

German DAX consolidation is over.

Now down 0.75% today and a clear elliott wave unfolded. The US markets are ready to resume the larger downtrend.

http://finance.yahoo.com/q/bc?s=%5EGDAXI&t=5d

Triangle on SAP too:

Now wave 5 should be under way. This will be a sharp rise to the 1164 level. If the 1160 level is breached, the next downtrend should be confirmed.

Bliss: caution on the rally.

The SAP futures are up 4.5 pts. My e-wave count and projection is to teh 1164 area. that leaves 7 pts of rally to the upside. When you take into consideration that you try to sell ahead of the top, that may reduce the potential to 6 points.

DOW component comments
April 23, 2005

STATS: numbers of companies in each category

Uptrend or topping 7

Downtrend % losses
<10% 3
10-20% 10
20-30% 6
>30% 4

--------------------------
AA ALCOA INC 1.5 year triangle downtrend
E-waves may be several complex waves instead
down 10% since '05 high
--------------------------
AIG AMER INTL GROUP INC
Heavy selling in Nov '04 and Apr '05
Lower Low, lower high.
Last selloff was more than 25%
In new bear market
--------------------------
AXP AMER EXPRESS INC
Started wave 1 down. Ready for a wave 2 bounce
wave 2 would form right shoulder
14% down in stairsteps
--------------------------
BA BOEING CO
Finished its rally now heading down
5% down from top or may still be topping with an ED
--------------------------
C CITIGROUP INC
Truncated bear rally, nearly complete wave 2 of new bear market
down 12.5%
--------------------------
CAT CATERPILLAR INC
started downtrend
Wave 1 17.5 down from top
In wave 2 about to head lower
--------------------------
DD DU PONT E I DE NEM
Downtrend started in 05q1 and sharply
15% drop in 3 months
--------------------------
DIS WALT DISNEY-DISNEY
Started new downtrend 05Q1
Down 12% from top
--------------------------
GE GEN ELECTRIC CO
Finishing a wave 4 down or wave 5 up.
If wave 5 then truncation is very likely
Near beginning of new bear
--------------------------
GM GEN MOTORS
Lost 50% in 16 months downtrend
Bankruptcy rumors will start to surface
--------------------------
HD HOME DEPOT INC
20% drop in during new bear market
--------------------------
HON HONEYWELL INTL INC
New bear started already down 10%
--------------------------
HPQ HEWLETT PACKARD CO
truncated zigzag bear rally, 20% lower than '04 highs. ready to drop.
--------------------------
IBM INTL BUSINESS MACH
Down nearly 30% over a 4 month period.
gave up 50% of bear market rally.
new bear market.
--------------------------
INTC INTEL CP
33% off '04 high
May be forming a long term triangle, or wave C of double zigzag truncated
--------------------------
JNJ JOHNSON AND JOHNS DC
Bear market rally nearly done. little ED forming
--------------------------
JPM JP MORGAN CHASE CO
Top of bear rally in early '04
New bear is 20% from '04 top
--------------------------
KO COCA COLA CO THE
Bear rally topped in early '04
New bear down 25% from top
--------------------------
MCD MCDONALDS CP
zigzag done
New bear market already dropped price 10% from '05 top
--------------------------
MMM 3M COMPANY
Late '04 to early '05 ED
Bear market rally started with 12% drop.
--------------------------
MO ALTRIA GROUP INC
6 year wave 4 triangle
wave 5 finishing up if not already done.

--------------------------
MRK MERCK CO INC
Lost 70% from '01 highs.
still in long term bear market
may bounce higher
--------------------------
MSFT MICROSOFT CP
finishe bear market rally, Wave B triangle
New bear down 20%
--------------------------
PFE PFIZER INC
Double zigzag from truncated top in '00
Completing Wave C-b triangle, Starting Wave C-c an
54% down from end of Wave B, bear market rally
going much lower
--------------------------
PG PROCTER GAMBLE CO
May have truncated alltime high in '05 or still completing
--------------------------
SBC SBC COMMUNICATIONS
Wave B triangle ended in late '04
Now in Wave C and down 15%
Price should fall fast.
--------------------------
UTX UNITED TECH
In Wave e of ED to alltime highs
Target 108- 110
Give it 2 to 4 weeks to top unless rest of market is dropping fast. Then it may truncate.
--------------------------
VZ VERIZON COMMUN
In Wave C
down 20% from end of Wave B
ready for a very little relief rally.
--------------------------
WMT WAL MART STORES
Truncated top in Nov '04 after a 4 year Wave 4 triangle
In wave 3-1 of bear market. down 19%
Down 32% from '00 high
--------------------------
XOM EXXon Mobile
Since wave 5 extended, it could still be extending.
there has been a 15%+ pullback on record setting volume from all time highs, so the top may be in.

SAP E-Waves and other TA

There should be no doubt the SAP topped out at 1229.1 in March '05. My Elliott wave counts to the downside is:

Wave 1 from 1229.1 to 1163.7
Wave 2 from 1163.7 to 1191.9 = 43% of Large Wave 1
Wave 3-1 from 1191.9 to 1136.2
Wave 3-2 from 1136.2 to 1160 = 43% of Large Wave 3-1

The arguments for and against Large Wave 3-2 being finished are very strong. If the price breaks below 1136.2, then sell and short. Otherwise hold since there is still a chance for a test of 1163 as resistance, and an outside chance an ending diagonal could still be unfolding from the late summer '04 lower. Don't buy any rally from this point.

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

Bulls:
1.) SAP will rally to 1164 on Monday so that wave A = wave B and Wave 3-2 retraces 50% of Wave 3-1.
2.) Stochastics are still in oversold area.
3.) MACD looks like it is trying to reverse.
4.) The price will test resistance level of 1163.
5.) The price is pulling away from the lower bollinger bands and will try to tag the center of the bands.
6.) The time spent consolidating was only 2 days. More time is needed to lull investors into a false sense of security (pun intended).

Bears
1.) Since Wave 2 and Wave 3-2 have retraced the same percent, it is unlikely in a trend gaining momentum that pullbacks at lesser degrees will retrace higher percentages than retracements of higher degrees.
2.) MACD is still negative.
3.) The price has been below the 50 day moving avg for 4+ weeks
4.) The price broke below the support level of 1163
5.) The lower bollinger band is opening lower, signalling a continued downtrend.

GOOG: Blow off top. (eom)

Wavers: Peg

I agree yesterdays high was a wave 3-3-1-4 high. I'm anticipating this is a wave two a larger wave 3 that is extending. Some of the markets then dropped below the beginning of wave 3-3-4 to make a "normal" wave 3-3-1-5 conclusion. The rally today looks like a wave 3-2-2 bounce. It's sharp and gives bulls a false sense of security. This proposed wave 3-3-2 also has rallied to the level of wave 3-3-3-4. Judging by the other wave 2's this one will be a 38.2% retracement. If the retracement is less, then the underlying trend is very strong, waterfall strong.

My forecast for the next week is a strong move to the downside.
SAP 1070
NAZ 1800
INDU 9300

GE in wave 4 traingle.

The price pop on Friday when earnings were released was part of a wave 3. Monday and Tuesday's action looks like an intraday wave 4 triangle. Tomorrow the price should pop, but most likely won't break $36.60. GE would be completing ending diagonals at two different degrees of trend. The larger ending diagonal will truncate. That makes three very bearish elliott wave events converging Wednesday or Thursday. Short at $36.50.

GE forming Ending Diagonal

Today's bounce was very choppy to the upside

http://charts.barchart.com/chart.asp?sym=GE&data=Z15&date=041805&den=HIGH&evnt=ADV&a...

Toppcats: E-wave downside.

I agree there is still more downside the next 1 or 2 weeks in the Dow SPX, NAZ.

10 Yr Tsy Yields

Elliot wave structure and fibonacci have converged today. The wave 2 down from 4.693% is a double zig-zag that retraced 62% of wave 1 up from 3.977%. Bollinger bands are continuing to widen in anticipation of a wave 3 up. Tomorrow or Wednesday should just about do it.

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

Being Right vs Dead Right

The sudden drop in prices of EBAY, FRE and FNM has me concerned that a systemic financial crash is about to take place in the next 6 months. Even though there is plenty of evidence for huge profits to be made to the downside, taking posession of your wealth could be the greater challenge. During the 1929 crash it took about 1 year the Dow to go from all time highs to an 89% loss. Banks collapsed, adding insult to injury. Trading will be extremely difficult as gyrations will be huge, but short lived. It may be a good strategy to start pulling money out of trading accounts now. Banks have only 1% in reserve. The winner in the coming year will be the one who loses the least.

EBAY crashing too.

With a dramatic fibonacci drop of 36.7% fron all time highs, the popular media has not yet picked up on EBAY's demise. That drop completed elliott Wave 1 or A in February. Since then a multi week Wave 2 or B flat completed in Early April. Now comes Wave 3 or C. What makes me uncertain of the larger count is corrective moves can be complex. Also, the Fibonacci ratios would project the target of this next move to the single digit area. For such large moves price ratios are sometimes better replaced with percentage ratios. Either way, the potential profits from this point are tremendous. Short EBAY.

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

GOOG: Massive Island Reversal

There is a potential island reversal shart pattern developing in GOOG. There is a huge gap to the upside in October. Chances are good that there will be a matching gap to the downside. The elliott wave count is large wave 3 is beginning a little over a week ago. Using fiboncci ratios, the downside target is $137 area. This puts the gap up in the middle of the wave 3 selloff. Wave 3 of 3 of 3's are know to be gappy and swift. Short GOOG on Monday.


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

I just shorted GE.

All the technical charts justified it.

Pops after "great" earnings are prime opportunities for shorting a stock. Emotions are at highs and usually wear off.

That's it for GE!!!

Since teh Jan '05 lows GE made higher highs and higher lows in a very choppy advance. Under Elliott Wave rules, wave 3 is never the smallest motive wave. For the proposed ending diagonal wave 1 was $1.65, wave 3 was $1.58, and so far wave 5 is $1.46. If this is in fact an ending diagonal then wave 5 won't break $36.61.


http://stockcharts.com/def/servlet/SC.web?c=GE,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!La1...

EBAY Leads The Way

It's been awhile since I looked at the EBAY chart. Since then an unmistakable wave 1 down erased 30% of the stock's price. I still don't know if wave 2 has finished. If not, wave b of a flat bounced off the 50% retracement of all-time highs. That's still scary for an economy that is supposed to be improving. If EBAY is in a wave 3, look out below. there is about to a huge dropping the price below $20. in the coming weeks.



http://stockcharts.com/def/servlet/SC.web?c=ebay,uu[w,a]wacayyay[df][pb50!d20,2][vc60][iLp14,3,3!La1....

Gold Trends:
Down
Down
And further down.

Solver would be a better play. I see a 40% gain over the nex 2-3 months starting and day now.

Why is gold falling, along with oil housing, and equities?
My rationalization is the deflationary forces are so strong that gold is losing its market value due to future liquidity fears. If a loaf of bread winds up at 5c a loaf, who is going to have change for anounce of gold? Silver proportional to gold is pocket change. Gold was also confiscated during the Great Depression. Fool me once shame on you...;)

GE ready to rollover.

A couple weeks ago I suggested GE was forming an ending diagonal that would not have enough momentum to make a new 52 week high. Today's surge could very well be the end of the ending diagonal, two more days at most. I'm now looking for confirmation of GE's turning point. The upside is limited and the initial downside should be a sharp drop just below $35. This risk assesment favors taking a short position.

http://stockcharts.com/def/servlet/SC.web?c=ge,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La12,...

Lenar (LEN) Topped out

Long term Elliott waves show a clear WAVE 3 of 5 through most of 2003 and early 2004. WAVE 4 lasted into late 2004. WAVE 5 ended in Late February 2005.

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


The first drop from the high is a clear 5 wave sequence followed by choppy advance of recent lows. This is a high probability confirmation. Bollinger Bands are pinching, signalling a dramatic change ahead. Ewaves and Bbands are in agreement. Happy shorting!!!

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

WMT continues slide.

This is the stuff WAVE 3's are known for

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

Dow and SPX topped in March.

I'm making the call for the top to be in place. The DAX is making a choppy advance despite FTSE experiencing a bump in the new downtrend. The Dow and SPX have failed to rally in sync with the DAX. Today's trading pattern in the conpletes a truncated zigzag wave 2 a larger WAVE 1 down. There is still a possibility of wave 2 will continue two more weeks. A retracement of fibonacci 38% and a truncation imply wave 3 will be longer than 1.62 times the amount wave 1 moved. SPX target for the next 3 weeks is 1060.

Bollinger bands are pinching as happens before a dramatic price move. RSI recovered from oversold areas, but not entered the overbought; further indication of weakness.

http://finance.yahoo.com/q/bc?s=%5EGSPC&t=5d

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

WMT Breakdown.

The price drop into the upper $40s fell below the lower triangle support edge of the wave 4 triangle that began in year 2000. wave 4 ended in the middle of 2004. Wave 5 was a thrust that ended in November 2004, which truncated. The ensuing sellof was fast as expected. WMT is now in a wave 3 of something down. The selloff is gaining momentum and should continue over the next couple of weeks.

http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=DE:1876534&sid=125284&time=

SP500 gives buy signal

The Stochastics have turned up and crossed above the lower limits of deeply oversold. The price ahs been moving away from the lower bollinger band that has been trending down. The MACD is still in a sell area, but moving sideways. The 50 day moving avg is being tested as resistance. Breaking to the upside of this line on the chart should comfort bull, and maybe even trigger programmed buying. The Elliot wave count best counts as a wave 4 flat complete in the August '04 rally. Channeling formed by tops of waves 1 and 3 and bottoms of waves 2 and 4 is pretty good. Look for a new test of yearly highs in the next 3 to 6 weeks. I'm holding cash and getting ready to short. I'm not going long.


http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...

denmo83: SPX chart

There are two telling signs of a new bear market. The elliott waves are looking good indicated by a strong intraday drop in the middle of the longer sell off. The 38% bounce over the last couple of days is typical fibonacci event.

Denmo83: GE

The price has been hugging that trend line the last couple weeks. There's not enough momentum to carry the stock away from the trend line for a major rally higher. Be on guard.