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Dow about to make a move.
Bollinger bands have pinched, MACD is rolling over, Stochastics have a ways to go before overold. E-wave count looks motive so far. Surprisingly all the wave 2's have been flats; no zigzag or complex corrections.
Another 150 or so points lower the Dow goes before meaningful support.
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La....
Cancelling E-Wave Subscription
I called to cancel my E-Wave subscription today. The short term forecasts haad limited accuracy since the longer term wave counts were wrong.
Don't get me wrong. I still think E-waves have validitiy. Zoran Gayer's count is turning out to be the best of the Bears. Prechter's accolade should be his Socionomic model. I'm going to buy a Hurst Cycle study course with the E-wave newsletter subscription money. I'm an electrical engineer and should be able to grasp Cycle real quickly.
MrCash's NAZ Comp Ewave count
Cash,
The W1 to W5 count from the Oct '02 lows fits into one of my longer term counts.
The longer term count is open to interpretation. Most E-wavers agree the oct '02 lows was the orthodox low of Bear Wave A. I have as my main count the orthodox low as Sept '01. Bear Wave B could equally be counted as a triangle or expanded flat. There is a Fib time ratio of Bear A = 38% of Bear B. A Fib price ratio can be met if you consider Flat C = 1/3 of Bear Wave B. The end of Flat C would be in the area of Bear A4, a common consolidation area.
If the triangle count is chosen then wave e can be counted complete. NAZ Comp Wave e is just below the trendline of end of waves a and c, but the NDX 100 has clearly broken the line. Throwover is normal, but not required. Wave e zig = 2/3 wave e zag, a fib ratio.
So now there is a time and price convergence happening.
As far as the Dow Industrials go, I count the Oct '04 rally complete. The long term wave count I have for the Dow is completing Wave 5 (started in Oct '02) of the wave that started from the Great Depression. I completely disagree the pullback from the Year 2000 highs is motive. Waves overlap way too much. The pullback was shallow with respect to the rest of the world. The rally from the Oct '02 lows looks like a clear 5 wave sequence, as you argue exists in the NAZ.
The implication is a potential double truncation that should result in a big crash starting any day.
The wave counts for both NAZ and Dow are presently in phase for a turn lower.
The fundamentals are more in line with the onset of a devastating Bear Wave C, which favors a nearly complete triangle or flat over a half complete zigzag.
Low rate of savings
Struggling job market
Mounting debt
Lack of consumer pricing power
Continued growing anger toward the US by the world.
There is nothing in the gas tank and no gas station for miles.
DELL Elliott Waves
The following link to DELL's charts is for reference only. The wave count John T. Piccioni has is his own opinion. My opinion varies and is explained below.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID510946&cmd=show[s26909839]&disp=....
DELL is a tech bellweather company. What happens to it generally happens to the rest of the tech sector. There is tremendous investor participation with Dell's stock, so there is a large enough population for Elliott wave analysis to be a valid tool. It may be some help figuring out the NASDAQ Composite and NDX wave counts.
Long term:
Multi-year Bear Wave A from Mar '00 to Oct '02 $59.69 to $16.01 change = -$43.68 / -73.18%
Multi-year Bear Wave B from Oct '02 to Near end $16.01 to ???
Multi-year Bear Wave B is a complex WYZ wave. The upper and lower trendlines are parallel. The present
rally has pushed the price near the upper trendline.
Here is the breakdown:
Multi-month Wave W from Oct '02 to Dec '02 $16.01 to $30.52 change = $14.51 / 90.63%
Multi-month Wave X1 from Dec '02 to Feb '03 $30.52 to $22.59 change = - $7.93 / -25.98%
Multi-month Wave Y from Feb '03 to Oct '03 $22.59 to $37.18 change = $14.59 / 64.59%
Multi-month Wave X2 from Oct '03 to Oct '04 $37.18 to $31.39 change = - $5.79 / -15.57%, Triangle
Multi-month Wave Z From Oct '04 to present $33.70 to present
The task now is to decompose Multi-month Wave Z into a corrective wave. So far I count a double zig-zag. This is far from textbook. The zig is disproportionally large compared to the zag. To make matters worse, wave c of the zag is trending up yet has a great deal of overlapping mini zig-zags. This signals a pullback of some sort is near.
Other technical indicators indicate DELL is extremely overbought.
The daily stochastic chart has been overbought for the last 20 days. The weekly stochastic chart has been overbought for the last 3 weeks, ending a wedge.
The daily MACD chart has leveled off as the price has moved higher, and the weekly MACD has shot up quickly. The divergence on the daily chart occurs near the end of an elliott wave.
The daily Bollinger Bands sort of pinched after a rather large widening. This foretells a dramatic price change from the present levels, but not the direction. The Weekly Bollinger Bands have widened. The weekly close has been above the upper band for 5 weeks. This is highly unusual. The price is due to make a move below the weekly upper band. The combined Bollinger Band charts indicate DELL will have a sharp selloff over the next 2 weeks. Prices typically move from one band to the other. Presently the lower band is about $37. This is a Fibonacci $5 drop from the latest Fibonacci $8 rally, AND it closes the gap up.
The Bullish case would be multi-month wave Z has not completed.
A near term pullback could potentially be part of a flat in a longer uptrend.
There is still a chance wave Z will move sideways as a multiweek ending diagonal.
The Bear Wave B has retraced 59.5% of Bear Wave A. Dell should top at $43.00 to be a perfect Fibonacci ratio.
The Wave Z took very little time. Another month and a half would make Wave Z = Wave W time.
There is a gap-up in November that should be closed before another rally.
The daily Bollinger Bands offers the possibility of a continued rally.
The Bearish case is very strong.
Bear Wave A and Bear Wave B parallel trendlines are textbook perfect.
The price is very close to the upper trendline and this is the third time the trendline is / has been touched.
The Bear Wave B has retraced 59.5% of Bear Wave A. This is close enough to a perfect Fibonacci ratio of 61.8%.
Wave X2 is a triangle and indicates the next wave is the end of Bear Wave B correction.
wave Z has been advancing with an ending diagonal as wave zag C
Wave Z took half the time of Wave W.
An overwhelming majority of other technical indicators are signaling overbought and imminent reversal.
Regardless of when the start of Multi-year Bear wave C begins, it will drop DELL share prices below $16.
Triangles:
It looks like the Dow started an Ending diagonal on Wednesday. Today a possible wave 5d formed a triangle, or wave 5e is going to truncate. Monday should be a pop and drop, if there is anything left to pop.
The sideways movement indicates investors are hestitant to head into this weekend. This does not bode well for Xmas shopping. Reports over this weekend and monday morning will probably be disappointing.
http://finance.yahoo.com/q/bc?s=^DJI&t=5d
WMT and TGT E-wave
WalMart and Target and target are the two biggest retailer in the industry, so studying these two is a good representation of the entire industry.
Neither is in a good position for going long.
TGT started mulit-year wave 5 in Oct '02 at $24.90.
http://stockcharts.com/def/servlet/SC.web?c=TGT,uu[w,a]wacayyay[df][pb50!d20,2][vc60][iLp14,3,3!La12....
Multimonth wave 1 from Oct '02 to early Jan '03 $24.90 to $37.10
Multimonth wave 2 from early Jan '03 to early March '03 $37.10 to $25.60
Multimonth wave 3 from early March '03 to early June '04 $25.60 to $47.40
Multimonth wave 4 from early June '04 to August '04 $47.40 to $40.03
Multimonth wave 5 from early August '04 to 3 waves done $40.03 to all time highs
http://stockcharts.com/def/servlet/SC.web?c=TGT,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La12....
There is potentially another 2 or 3 dollars of upside for TGT in the next two weeks followed by $5 to $10 pullback.
WMT has only recently broken out of a multiyear wave 4 triangle that began in Dec '99 and finished in Aug '04 at $51.08!!! (you may need to adjust chart settings)
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=wmt&time=&freq=
Since then there looks to be 3 waves up
http://stockcharts.com/def/servlet/SC.web?c=wmt,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La12....
Weekly wave 1 from Aug 9 '04 to Aug 16 '04 $51.08 to $54.97
weekly wave 2 from Aug 16 '04 to Sept 22 '04 $54.97 to $51.10 right should of inverted head and shoulder.
weekly wave 3 from Sept 22 '04 to presently in daily wave 4 $51.10 to ???
Alternatively, weekly wave 3 could be a series of wave 1 and 2's. This is the most bullish.
Price action following a triangle is usually a sharp rise in price the width of the triangle. WMT's trianlge width is $27.50. This gives a theoretical target of $78. This is quite a jump in share price considering TGT's wave is nearly done. Undermining the surge is the flat holiday sales for WMT yet the overall retail sector made sales gains of 10%. If WMT drops below $54.38 daily wave 4 will have overlapped daily wave 1. There is some flexibility counting waves of individual companies when it comes to overlapping waves. A drop below $51.91 would be too much of a drop to be flexible.
Dow triangle looks complete.
And today there appears to be a head and shoulder intraday top. Looking for Monday and Tuesday next week to drop below the 10400 level.
http://finance.yahoo.com/q/bc?s=^DJI&t=5d&l=on&z=m&q=l&c=
Belaboring Initial Unemployment Claims
The Dept of Labor has FREE initial unemployment claims data at their website: www.dol.gov.
This data dates back to the year 1968. And can be loaded into a spreadsheet to create charts. When I did this I saw how erratic the unadjusted numbers (The TRUE numbers) really were. The second week in January is ALWAYS the time of the year when the most initial claims are made. September is the time of the year when the fewest initial claims are made.
What amazes me is that in the early 1980's the alltime high were an unadjusted 1 MILLION initial claims in a single week, but the seasonally adjusted number was lower by at least 20%!!!
Just as amazing were the year over year gains in claims made in January during the 1990s and y-o-y Sept numbers declined!!!. This formed an expanding envelope. This was a huge divergence from the stock market and e-conomy. That should have set off alarms that the bubble would burst.
The lows in the 1990's are just slightly lower than the lows in the 1980's. This is a line of resistance that the present recovery is about to meet. I would be surprised if this recovery breaks this line.
As far as the adjusted number following the unadjusted trend, it captures the longterm trend. Neither the adjusted nor unadjusted number provide conclusive long term e-waves, unless the pattern is an ending diagonalthat began in the early 19080's.
Dow making triangle?
http://charts.barchart.com/chart.asp?sym=$INDU&data=Z10&date=112404&den=HIGH&evnt=AD...
Normally a triangle indicates there is one more wave in larger trend. The pullback from 10600 should still drop farther. Look for a support around 10260. This is a 38% retracement of the fibonacci 890 point october rally.
GOOG Dec 18 date:
Some of these investors could buy a whole bunch of puts. After all, what is a few dollars of insurance per share to lock in all that profit.
Cash, you're at step 4.
You gave too much e-wave analysis, hah hah hah.
The orthodox turning point I was refering to was a bottom. It is very possible that this rally from Oct' 02 lows will be an orthodox top of the wave started 30 years ago.
General Market E-Waves.
This is a weekly column I read at www.safehaven.com
The analysis implies the Dow tops before the NAZ and SAP. The analyst views Oct '02 as the orthodox low for all three markets.
http://www.safehaven.com/article-2235.htm
I'm still looking at the long term wave count for the NAZ and Dow. Last week I started feeling optimistic about the market. This week I'm having doubts. An alternate bearish count in the NAZ caught my attention after a quick glance.
I made a comment about orthodox turning points a few days ago. The alternate count for the NAZ has an orthodox end of NAZ Bear Wave A was around 9/11/01. Since then NAZ Bear Wave B formed a running triangle. The upper edge of the triangle is the 2100 to 2200 level The Oct '02 and March '03 lows form the lower edge. Notice the NAZ bounced off the lower edge in Aug '04. There is a fibonacci time ratio of NAZ Bear Wave B to A of 2.08. The total time of 166 weeks is 3 time a fibbonacci 55 weeks. The price at this point is in the range of NAZ Bear Wave A4. The updated count puts the NAZ in Bear B Triangle wave E. An alternate wave from the 9/11/01 starting point is an incomplete expanding flat. NAZ Bear B Triangle wave E has not broken the upper edge of the triangle. This is not required since the structure is in place. The only weakness in the triangle scenario is that the NAZ Bear Wave B only retraced 19.4%. This is hardly a Fibonacci relationship.
One strong wave count for the Dow is at the end of Super Cycle Wave (V). The price pattern from the y2k top to Oct '02 lows has too much wave overlap to be motive, so I'm labeling it a SuperCycle Wave (IV). While the Dow dropped a fibonacci 38%, it dropped the least of most, if not all, of the world indices. The wave from the Oct'02 lows looks very motive on the weekly and monthly charts. Supercycle Wave (V) is 111 weeks old or 2 times a fibonacci 55 weeks long. Focus now on the Primary 5 of Cycle wave 5 from the October '04 lows. A pretty clear 5 wave pattern has formed. The Dow gained 890 (10 x Fib 89) points in roughly 21 (Fib) trading days. The challenge is to determine if this completes Primary 5, or if there are 4 more Intermediate waves to go. The implcations are significant bearish or bullish. The bearish implication is a double truncation predicts a dramatic price drop. The bullish implication is a new all time high, or pretty close to it.
Considering the NAZ and Dow bullish cases, the problem to resolve is how the Dow can have a single wave off the Oct '04 lows, yet the NAZ have 3 waves (maybe a zigzag?) off the August '04 lows. It is possible the NAZ and Dow will have different turn dates as occurred in y2k when the NAZ topped weeks after the Dow. The bearish cases for NAZ and Dow indicate simultaneous turning points. The weak 19% NAZ retracement is sends the same message a double truncated Dow sends. The near term trend is down, but how far?
QQQ and SMH.
QQQ is overbought and the stochastics are poised to give a sell signal today or tomorrow. One wave count I have for it indicates a small ending diagonal SMH will probably follow given it is tech as well.
I'm going to post a more specific analysis this weekend, as I did last weekend. This one is Bearish, and is based on my comments of unorthodox prices in counting elliott waves.
Markets topping.
The DIA momentum is rolling over. The bollinger bands are gaping wide. The price is failing to keep up with the upper bollinger bnad. Stochastics are rolling over in extremely overbought levels.
I think the past few days have been an ending diagonal. A little push above 10600 in the DOW should do it. Action following an ending diagonal is sharp drop. Immediate downsize bounce level is 10400.
http://www.investorshub.com/boards/post_new.asp?board_id=2593
Orthodox tops.
It comes as a surprise to many that an elliott wave may end sooner than the date the price trend ends. What I'm suggesting is Wave A down from y2k ended around 9/11/01 for both the NAZ and SP500. Since then a TRIANGLE may have unfolded. The wave from y2K down to the Oct '02 lows in the Dow should be counted as a Wave 4 expanding triangle. The Dow rally from Oct '02 to present would be Wave 5 which so far has truncated twice. Double implies a much greater price change.
These wave counts help explain the count differences such as a zig zag in the NAZ from Aug '04 to present and the Dow's clear 5 segment motive wave. It also helps clear up counts in the FTSE and the DAX. These counts negate Pechters "expanding leading diagonal" he proposes and favors Zoran Gayer's view.
I'm getting sea sick.
There are so many different ways to count waves on index charts, both bullish and bearish. At the heart of the matter is be correct at multiple degrees of trend. The largest trend is the wave from the 1932 lows. The debatable question is did y2K mark the end of the 68 year wave? Since the Dow tracking stock is DIA(monds), I'm going to call the proposed timefram a Diamond wave.
Diamond Wave 1 from 1932 to 1934
Diamond Wave 2 from 1924 to 1942ish: ZigZag
Diamond wave 3 from 1942 to 1964ish: extended
Diamond wave 4 from 1964ish to 1974: expanding triangle
Diamond wave 5 from 1973 to 2000???
It's possible to count Diamond wave 5 as
Multiyear Wave 1 from 1974 to 1976
Multiyear Wave 2 from 1976 to 1982
Multiyear Wave 3 from 1982 to 1987
Multiyear Wave 4 Crash in 1987
Multiyear Wave 5 from 1987 to 2000
Let's introduce a second count for Diamond wave 5:
Multiyear Wave 1 from 1974 to 1976
Multiyear Wave 2 from 1976 to 1978
Multiyear Wave 3 from 1978 to 2000: Extended
Multiyear Wave 4 from 2000 to 2002: Complex Crash
Multiyear Wave 5 from 2002 to 20041112?
Under the second count, the Dow is at a critical point. On Friday Wave 5 of Multi 5 completed a clean 5 wave sequence in the pre-election rally. There is no indication either way of being finished or not. The implications of this being the last wave is it would be a truncation at two degrees of trend. This is a good condition for a crash.
I don't think SuperBear is in the phone booth yet. The SAP500 and NAZ waves off the August'04 lows only counts as two motive waves. A less severe bearish situation for the NAZ and SAP500 I have not yet seen in print is the Wave 1 of the Bubble burst ended on 9/11/01. The wave since then has been a flat. Since the Dow is so close to its y2k high, I would lean toward the second Multiyear wave case. The only thing technically consistent among ALL indexes is that they are overbought on the daily chart AND they have completed a motive wave at some degree. For the three markets to top simultaneously in the timeframe projected by the boards cycle analysts, the SAP500 and Naz form an ending diagonal, and the Dow makes a motive wave (probably truncates). Stochastics on the weekly charts are only entering overbought, so more time is needed to reach longer term overbought.
I'm not the only one whose head is spinning. Robert D. McHugh, Jr. Ph.D. of Main Line Investors, Inc. http://www.technicalindicatorindex.com came up with a chart of the Ratio of the Dow Jones Industrial Average vs. the 30 Year U.S. Treasury. He points out a head and shoulders pattern and its implication. He concludes "There is no resolution to this pattern that is positive for the economy."
Expect the markets to head lower this week.
NAZ target 1900 50% retracement of 5A
SAP target 1125 50% retracement of 5A
DOW target 10222 38% retracement of 51
A break below the lows of the year would be a high probability the beginning of the next major bear market wave was under way.
Bear Turning Bull Here.
Nikkei chart is showing a triangle formed over much of this year. That means one more wave up.
FTSE and DAX have a complex correction this year.
DOW looks like a 5 wave sequence off the October '02 lows and has a realistic chance of new all time highs this year.
This wave count is more in line with cycle analysis others are providing on this board. I could see the market topping within 20 to 40 weeks. It would have good time proportionality with the early '03 pullback, and price proportionality with the late autumn rally of '02.
GOOG pulls back near turm and breaks above $200.
Deva: GOOG wave counts
The Wave count from the $200 area has three possible counts.
The first is
Wave 1 started and ended at the price high and vol spike between 14:00 11/02 and 13:30 11/03.
Wave 2 was a flat that ended $197.50 just before 13:30 11/02
Wave 3 ended at the low $184 between 13:30 11/03 and 13:00 11/04
Wave 4 a zigzag ended $190 shortly after 13:00 11/04
Wave 5 ended at $169 12:30 11/05
Since then a corrective flat is unfolding
Wave A is $169 to $175
Wave B is $175 to $165
Wave C is $165 to ??? May not have completed since wave C2 looks like a flat and wave C4 looks like a zigzag.
The Second is
Wave 1 started at $202 and ended at $184
Wave 2 was a zigzag from $184 and $190.
Wave 3 had a gap as is drop from $190 to $169
Wave 4 a traingle between $169 and $172
Wave 5 ended just below $169 between 12:30 11/05 and 12:00 11/08
Since then a corrective flat is unfolding (pretty much the same as in the first case)
Wave A is $169 to $175
Wave B is $175 to $165
Wave C is $165 to ??? May not have completed since wave C2 looks like a flat and wave C4 looks like a zigzag.
The Third is
Wave 1 started at $202 and ended at $184
Wave 2 was a zigzag from $184 and $190.
Wave 3 had a gap as is drop from $190 to $169
Wave 4 a traingle between $169 and $175
Wave 5 ended at $165 11:30 11/09
Since then a corrective zigzag is unfolding
Wave A is $165 to $172.50
Wave B is $172.50 to $167.50
Wave C is $167.50 to $190
Multiday wave 3 is beginning to unfold.
So which is the "Best" count?
My preference is the third situation.
The channel lines for the wave from $202 to $165 look good.
There is a well formed inverted head and shoulders.
The gap occurred in wave 3
Triangle generally occur in wave 4 positions
The zigzag retraced 67.5%, though 61.2% would have been ideal.
The wave ratio of zig to zag is 1:3 nearly perfectly.
The beginning of wave 3 was resistance at $190 for the zag.
It would be a tuning point on the same day the broader markets look to have topped.
My next best choice is the second situation.
The channel lines for the wave from $202 to $169 look good.
The channel lines for wave C look good.
The gap occurred in wave 3
The flat has retraced at least 67.5%. The upside target of $194 would be a 78% retracement.
The wave ratio of C1 to C3 is 1:3 nearly perfectly.
The resistance at $190 would be retested by C5.
Should the move $202 to $165 actually be a corrective wave, then the zigzag would be relabeled waves 51 through 54 with 55 left to retest the all time highs.
http://charts.barchart.com/chart.asp?sym=goog&data=Z15&date=111204&den=HIGH&evnt=ADV...
GOOG to consolidate.
GOOG finished a wave 3 today with a 9% gain. Wait a day for some intraday consolidation and the last rally should occur in what I believe to be wave C fo a flat. This may not be a good rally to trade to the upside since it could be the end of a corrective move. The wave down from $200 looks like a complete 5 wave sequence.
5 day
http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=goog
16 day/ 60 min
http://charts.barchart.com/chart.asp?sym=GOOG&data=Z60&date=111104&den=MED&evnt=ADV&...
UGNE
This stock looks like it will make one last advance to a new high. The price target is around $1.90. This is based on the observation that triangle has occurred in the wave 4 position. Price action after a triangle typically moves very quickly and rises the width of the triangle.
The benefit of this HOT LEAD is the clear trend in the highly specultive category of stocks. A major turn in the market should be days away.
FRE and Hang Seng
The near term chart for the Hang Seng is getting pretty toppy: wave 5 of 5 of Zag. This is nearly text book motive wave on the Zig. It's going to be close whether the Zag breaks 14000.
6 month chart
http://stockcharts.com/def/servlet/SC.web?c=$HSI,uu[m,a]daclyyay[dc][pb50!b200][vc60][iUb14!La12,26,...
3yr chart
http://stockcharts.com/def/servlet/SC.web?c=$HSI,uu[w,a]daclyyay[df][pb50!b200][vc60][iUb14!La12,26,...
FRE: Yes I agree that bullish case is another month forming the ending diagonal. The wave proportionality would be better that way. And who knows, maybe there will be a second ED.
Maybe a multi month Wave 5 in the Dow?
The Dow's fall from the Y2K highs looks more like corrective with all the overlapping rallies and selloffs. Multi month Wave 4.
The rally that started off the Oct '02 lows is looking more like a motive wave than a corrective wave. Multi month wave 5. An within this multi month wave 5, multi week wave 4 formed through much of this year with sideways trading.
What may be happening is a nonconfirmation by the NAZ as the Dow could be setting new all time highs over the next several months. This is the Zoran Gayer wave count. Prechter's count uses the Y2K highs as the start of a multi year crash. I'm splitting the difference of them both: a truncated wave 5 rally. People are still easily swayed into "investing".
Bonds Yields Breaks Bollinger Bands
and the bands have started to widen. There is much more volatility ahead.
The MACD has been in an uptrend while the yield has moved down and sideways. The Stochastic is nearly overbought, though you shouldn't bite on the first overbought/sold with this oscillator.
This could be the start of the next big wave of selling in bonds. G'bye home refi's! G'bye world stock markets.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Real Estate ED
Wave 1 of Large 5: May '04 to mid July '04
Wave 3 of Large 5: late July '04 to early Sept '04
Wave 5 ED of Large 5: Late Sept '04 to present
This count in wave 5 ED of 5 is in wave D. This week real estate should make it's top. The UK and US housing bubbles have been in synch, and prices are starting to fall in both places.
http://stockcharts.com/def/servlet/SC.web?c=$rms,uu[w,a]dacayyay[dd][pb50!d20,2][vc60][iLp14,3,3!La1...
Over the Horizon RADAR: FRE.
FRE is Freddy MAC, the government sponsored entity tasked with making mortgages affordable to americans, appears to be making an ending diagonal that started in June of 2003. The current price is flirting with new all-time highs. The last Fibonacci ratio has been broken, so the likelihood of the last 18 months being a Wave 2 or a B Wave have diminished dramatically. The tip of this diagonal converges 2 to 3 months in the future. 21 months would be a Fib number. The long term charts show congestion starting in 1999.
There is another count that is even worse. The ED could have ended in truncation in September '04. Under this scenario, FRE is set for a rapid drop over the next several weeks. Since FRE is so interest rate sensitive, FRE could follow the bond market that is rolling over.
3 year weekly chart:
http://stockcharts.com/def/servlet/SC.web?c=FRE,uu[w,a]wacayyay[df][pb50!d20,2][vc60][iLp14,3,3!La12...
10 year chart:
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=DE:1876534&sid=125284&time=
E-Waves.
The NASDAQ move off the August lows has too many overlaps to convince me of a longer term motive wave. Upper channel line of resistance from the '04 high has been very strong.
Deja Vu. The DOW topped before the NASDAQ in 2000. This is happening to a smaller degree right now.
The global mood in the late 1990's was very upbeat. Now the US faces one of its worst popularity polls in decades. These feelings do not encourage investors, and since the US stock markets have not dropped yet, there is some catching up to do as foreign investors cash out of the US. These negative feelings hurt US exports. The falling dollar isn't enough to convince the world to buy america. If the sentiment worsens, US based companies could start closing shop.
Depending on which happens first, the dollar could strengthen as US companies sell foreign currencies and buy to US$. Or foreign investors could sell US stocks and bonds and then sell US$ for their local currency. With the large amounts of US capital in the form of factories located oversees, it's difficult to determine who has the stronger hold on the other. It's more of a financial MAD (mutually assured destruction).
1929 Crash Fibonacci Time Ratio
75 years is 900 months. This is factored into 5*5*3*3*2*2, all of which are fib numbers.
75 years is 3900 weeks. This is factored into 13*5*5*3*2*2, all of which are fib numbers.
Either way you look at it, there is a time confluence. Maybe the cyclists can look at the generational length cycles ( Kondratieff cycle?)
Happy 75th Anniversary
On the 1929 Stock Market Crash. Diamonds are forever, but peoples' memories are not. If the ending diagonal in the NAZ holds true, then there will be a sharp drop next week.
ED in 10 yr Treasuries
Price chart:
http://charts.barchart.com/chart.asp?sym=TYZ4&data=Z30&date=102504&den=HIGH&evnt=ADV...
Stochastics are way oversold on the yield and set to move higher. The Bollinger bands are opening and the yield is showing slowing downward momentum. Could be a big turn.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Great Cycle Charts
Those charts really show me what the basic concept in cycle analysis. This is similar to graduate level signal analysis in electrical engineering I've taken. What I did about a year ago was design a bandpass filter to scan the market for dominant frequencies. What I initially saw were imperfect sinusoids. The phases would would change, and the amplitudes would decay in an envelope within about 5 cycles. In building an adaptive filter, the system's natural frequencies will be locked on. These stratgies work as long as the system is linear time-invariant.
The Federal Reserve did a study with an adaptive filter to help them in their planning. Even though they concluded there was no predictive value beyond 2 years, it was a great first guess. The reason longer timeframes are difficult to track is that the financial system's natural tendencies are constantly changing.
Frank: DOW, NAZ
It sure looks that way. It's about time the market rolled over. Really, how many times does it take before a stock or market makes lower lows and lower highs before investors stop their buys?
For the last two weeks teh NAZ and Treasuries have been strong. This is a polarization of risk. Both groups of investors can't be right. Now that the NAZ is down much sharper today relative to bonds and the DOW, it's a strong signal that investors are becoming risk averse.
DAX on GOOG
The German markets showed positive reaction to GOOG earnings, but nothing of a rocket as markets did in the 1999-2000 timeframe.
This is a great time to sell the rally. Maybe a pop and drop.
Running flat.
Yes, it's rare. It is corrective in very strong markets.
Mr Cash: DOW
Yesterday's lows to this afternoon highs looks like a running flat. Tomorrow could be a very strong down day.
http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=%5Edji
SP500 / Dow
And the NASDAQ to a lesser extent.
So far they are showing a double zigZag from yesterday's lows to today's highs. There was just a burst of buying, so be on guard for a new high of day.
Bonds still in rally
This morning's early trading pushed the yield of the 10 yr Treasury to new multiweek lows. The best eWave count is a double zigZag. The end of the Zig being in Mid Aug '04, and the beginning of the Zag in Mid Sept '04.
The Oct high in the Stochastic breaks the resistance line formed by the highs since May.
The MACD is diverging momentum as the momentum favors higher yield despite the yield making new lows.
Bonds are getting ready to turn.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Chuck, see your point
That's what I'm seeing in my rear view mirror for the NAZ.
There may be a turn this afternoon.
I still see the Dow making new lows this year in the near future. The lows today were about 30 pts away. BBands indicate a price slide.
NAZ to retrace a little of the drop from yesterday.
This morning's sharp opening looks like it completed a clean 5 waves down from yesterday's highs. Looking for resistance around 1930. This is a 38% retracement AND the area of wave 4 of yesterday's drop.
Similar resistance at the wave 4 level appears in the DAX today.
Approaching YTD lows for Dow
With a little more than 100 point separating yesterday's close from a new year to date low, I am surprised the media has not placed such a fact in front of the public. What the media is feeding is the story of post-election market action when a major technical signal is highly likely to be given BEFORE the election.
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!....