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Initial Jobless claims:
The jobless claims are still forming a bottom. The bottom may be in.
The chart is showing a possible inverted head and shoulders the last 3-4 months. With all the seasonal adjustments, I find it amazing the chart has nearly perfect wave characteristics and chart patterns.
http://www.bullandbearwise.com/InitialJoblessChart.asp
Something's fishy
The Nazdaq is rallying, but the Dow is moving sideways.
Bonds had two+ days of strong rallying, but formed what looks like a failed 5 wave on the price chart. The price reversed hard midway thru today.
Mr Cash, Yes, Triangle in NAZ
The Dow looks more like a zig-zag. Wave B of the zigzag looks like a trangle.
US markets are rallying fast. Look for a sharp reverse around the highs of the past 7 days.
Pop And Drop
Premarket Futures indicate a strong open for US markets. The best E-Wave count is a wave 4 triangle ending yesterday. Triangles are followed by swift moves typically the height of the triangle. This where the pop comes from.
This is opposed by DAX, FTSE, and Nikkei being decidedly down. The US markets have also have overbought stochcahstics and weakening MACD (momentum). This is where the drop comes from.
Mr. Cash: Mixed signals.
Decompose the general markets into the sectors. You may find tech analysis works a little better. Part of the problem I think is happening is money is rotating too fast to get clean signals using the DOW, NASDAQ, or SPX. The only signal those three are giving is the DOW and SPX have had a stronger rally off the August 13 lows than the NASDAQ. It reflects a flight to quality. Investors are hopping (and hoping) through the risk spectrum.
Airedale: Bond data
No, you have to copy/paste the data into a spreadsheet. I've been having difficulties accessing the Federal Reserve Website. I don't take that as a very good sign.
FTSE testing 52 week highs
The FTSE is about 45 points from making a new 52 week high. The CAC, DAX, DOW, NASDAQ, and SPX are struggling to keep up with the FTSE. Take this as a bearish nonconfirmation, much like the relationship between the DOW Industrials and the Dow Transports. Get ready to short any of the world market laggards.
http://stockcharts.com/def/servlet/SC.web?c=$FTSE,uu[w,a]dacayyay[dd][pb50!d20,2!f][vc60][iLp14,3,3!...
Bond site:
www.federalreserve.gov
It has monthly data going back to the 1920's for class A and B bonds. I think daily data goes back to 1980. That's still a lot of data.
Bond Cycles?
Has anyone done cycle work on bonds? It would be a good idea to see what the complete financial system is doing by studying enough of the larger parts.
I see Dow in intraday wave 5 off Aug 31 lows:
http://charts.barchart.com/chart.asp?sym=$indu&data=Z10&date=090704&den=HIGH&evnt=of...
The Dax and Nikkei made solid gains on Monday and Tuesday when the US markets were closed. The US markets didn't pop to play catch-up. It's indicating a turn.
I'm surprised
Looks like the DOW truncated during the 2:30PM rally. The selloff into the close retraced too much for the DOW to start a small wave 3 on Tuesday.
DOW making a late rally
Wouldn't surprise me if a new high of day is made. It would complete a convincing 5 wave sequence that started on Aug 31.
http://charts.barchart.com/chart.asp?sym=$indu&data=Z60&date=090304&den=MEDLO&evnt=o...
Interest Rates Turning.
The Bollinger bands are pinched really tight on the 10 yr Tsy yield. This means volatility should increase. The MACD crossed to the upside. This means yields should rise. Stochastics are moving off lows. This means yields should continue to rise the next week. These three chart indicators collectively indicate higher interest rates ahead.
The 200 Day Moving average is directly above the yield, and teh 50 DMA is not too far above. I would expect a test of resistance next week, and then a tests of support into mid September.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
QQQ: Possible Ending Diagonal
from Tuesday.
The DOW dropped lower at the opening, and has rallied back. The QQQ dropped much harder and overlapped Wednesday's highs.
It seems there is still some life left in the overall markets. Maybe just for today.
Initial Jobless Claims Surge Higher
Today's report broke through the 350K barrier convincingly. This was the first line of resistance. The channel resistance was broken with sideways movement over the last 2 months.
From what headhunters are telling me, hiring activity is being put on hold until after the election.
These two factors, one on the input and the other at the output of the jobmarket, should contribute to a decreasing payroll number into the election.
http://www.bullandbearwise.com/InitialJoblessChart.asp
Permabear says. "GRRRR"
My permabear position is for the long and intermediate terms. Down markets can drop suddenly and voliently, catching those with long position completely off guard. Since the major social mood/ behavior is in disintegration mode, I would be extremely cautious going long even for a little scalp here and there.
We'll see if that sharp sell off mid day on Wednesday was a kneejerk in little wave 3 of a motive down wave, or part of a corrective wave with more upside the next few days.
Thanx, MrCash. Terror events
What today's action shows is how edgy investors are. They want to sell and are looking for a "reason" to justify doing so. They have their finger on the mouse ready to click to sell. I don't see long term upside potential from here based on the fear factor.
Sudden loss of cabin pressure.
Any event triggering the selloff?
Put to Call Ratio
The ratio is at 0.66. The last several selloffs began from these levels, so much more downside is expected.
http://stockcharts.com/gallery?$CPC
Trigger Events This Week.
Don't forget the protesting in NYC. Negative emotions are heating up, and that does not bode well for the financial markets. A long term rising market needs a society that feels good. I don't believe the depths of negativity have been reached.
WoW! Bonds Rally.
It could be a blowoff, or maybe it's a "flight to quality" indicative of a more dramatic selloff in the equities market.
Bond prices forming ED
Pattern begins on August 24. Just a little more rally left until teh reversal.
http://charts.barchart.com/chart.asp?sym=tyu4&data=Z30&date=083004&den=HIGH&evnt=off...
Frenchee: Nice chart.
The monthly bollinger bands jump out as giving a very important signal. They have pinched and indicate a big change is about to occur.
Frank: I see an ED too
The 1867 area of the NAZ composite was my target for the end of this rally. It should be close.
I called 10218 for the DOW at the same time. Again, it's close.
Bond prices forming triangle, not ED
Early morning trading gapped up, but did not hit new highs. Selling pressure immediately drove bond prices lower.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z30&date=082704&den=HIGH&evnt=off...
DOW end Diagonal 2PM to close.
NAZ breaking down too.
hopeful10: FED intervention:
What kind of investors are they if they buy high and sell low?Interest payments on this liquidity shot only increase the total losses.
Is this liquidity injection signalling a terrorist attack?
The FED can't support the rest of the world markets either. It's only a matter of time before the thing collapses.
Triangle fizzled?
It's possible the rally after triangle tip was a failed 5th. The trading has been choppy since.
Intraday triangles forming.
On both the DOW and NAZ. The NAZ one is descending while the DOW is symmetrical.
The last little push should begin any moment and will be sharp. Start selling at Dow 10200 and forget about the last 20 pts the DOW could rally, it might truncate.
Just sell the NAZ at 1857. Don't bother for it to break 1860 because it might truncate.
One more little rally
Both Dow and NAZ are close to a turn.
In the Dow 10200 is the 61.2% retracement of the late June to mid August selloff.
In the NAZ 1867.28 is the 38.2% retracement for the same timeframe.
The lagging in retracement % by the NAZ could indicate a "flight to quality". Money is shifting out of tech and into bonds and bluechips.
NASDAQ: a little more upside tomorrow.
I could a clean wave 1 off the bottom of Tuesday's trading and a clean wave 3 up from today's lows with a possible wave 4 into the close. I'm expecting a wave 5 tomorrow morning.
SP500:
With the bank index set to begin a multi week wave 3 decline any moment, and the SP500 having a 25% weight of bank/financial stocks, I would be very cautious about going long with the SP500.
Bond Yield: Possible Inverted Head and Shoulders
This pattern has been going on the last 3-4 weeks. The stochastics and MACD are in good position for a sharp rise in yields. The Bollinger Bands are closing, indicating a big change is about to happen.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]daclyyay[db][pb50!d20,2][vc60][iLp14,3,3!La1....
Messy DOW, SPX, and NASDAQ
These major indecise have proven difficult for both bulls and bears to count E-waves. Some investors throw out tools when they don't apply without trying to figure out why the model doesn't appear to be working. Let's take a few steps back for a moment to figure out why things are working better for industry indexes and not the broader markets. I'd like to entertain the idea that money is rotating within the major market indexes to give a very choppy chart. When looking at sectors, the waves have more clarity. Maybe trading the sectors with the clearest wave patterns will be the most profitable for now. Trade the broader markets when the money rotation has slowed down.
Take a look at the bank index. There is a very clear bear market wave the month of April '04 into early May. Since then a clear ABC (zigzag) has unfolded, and is near a turning point. The importance of the banks is that it represents perceived financial structure strength. Without a sound structure, the rest of the business world become a non-issue.
http://stockcharts.com/gallery?$BKX
The SOX has fairly clear bear market waves.
http://stockcharts.com/gallery?$SOX
The Airlines chart doesn't show the waves as clearly, but shows overhead resistance at the 50 day moving average. Also bearish is the large retracement of the rally that started in Spring '03
http://stockcharts.com/gallery?$XAL
Weekly stochastics:
Be careful about using the weekly stochastics for buy/sell signals. The INDU gave some false sell signals last year.
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]wacayyay[df][pb50!d20,2][vc60][iLp14,3,3!La...
PEGwatcher
Eventually US debt AND currency will become unattractive to foreign investors. Foreign investors and the US are in a dysfunctional relatinoship. Foreign investors have indicated there is a problem. The European Central Bank issued "SELL" recommendations for US mortgage backed securitites to regional banks in Europe in spring '03. The US is in denial game of having a problem, and the rest of the world is having troubles justifying getting out of the relationship. This is going to be an ugly divorce.
I would be cautious investing in Euros. Over the next year or so things should be profitable. Longer term I expect another rise in nationalism which will undo the politcal unity that give credance to the euro as a currency. Anti semitism is growing quickly as indicated by the burned synagog.
Going to Asian currency is a gamble insofar as getting out of a profitable trade. If the US confiscates foreign currency its citizens hold, then the investment is a loss. If forecign travel restrictions are placed, then converting the foreign currency back to US$ again becomes a problem.
Globe Trotting
Nikkei:
The Godzilla market is about to appear in Japan. The chart has been gappy the last 2 months. Gaps to the upside were eventually closed, and then some, very rapidly. There were gaps up last week, so the Nikkei is ready for a sudden drop. The Bulls just can get the market to follow through with a meaningful rally.
http://stockcharts.com/def/servlet/SC.web?c=$nikk,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La...
FTSE:
The FTSE is the closest European market to the DOW in terms fo retracing the drop from early August highs.
http://stockcharts.com/def/servlet/SC.web?c=$FTSE,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La...
DAX:
The DAX has only retraced about half the drop from early August highs. The general shape is the same as the FTSE. A bearish nonconfirmation may be setting up.
http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Hang Seng:
The HSI has been flat for the last couple months. The least bullish is and ending diagonal finishing the next week or two. The more bullish is a Wave C covering the same timeframe to the 13000 area to close a gap down made in early April.
http://stockcharts.com/def/servlet/SC.web?c=$hsi,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
The global markets are getting ready for a turn.
Question: Bonds vs oil.
What does the board have to say about falling oil prices possibly being offset by sharply rising interest rates? What will the news headlines be?
E-wavers don't really care since each market has a life of its own. But "the herd" could very well be startled as their mechanized model of finances fails to meet expectations.
Bonds selling off.
Price gap to the downside after a monthlong rally is not good. Looking for confirmation of trend reversal.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z45&date=082304&den=HIGH&evnt=off...
Initial Jobless Claims
Jobless Claims still is forming a bottom. The last 3-4 months has been sideways. After what appears to be an A-B-C wave that started in 9/01, downward momentum in claims has slowed. Confirmation of Elliott wave uptrend is still to be seen.
Anecdotally, this week was the second time in a year the hiring manager wanted to make me an offer, but the position was cancelled by someone above him. Other employers are setting the bar so high that nobody could fill the position. The defaltionary symptoms in the job market are reflected by advertised positions which seek individuals to perform the work of multiple people at the same or lower compensation of a single position.
My friend interviewed with a company he worked with at one time. He was well received and felt like a homecoming. After his interview, word came from above that hiring freeze had just been put in place due to a reorganization, but not a downsizing.
This is not only in the tech and medical environments. One manager at a clothes retailer could not decide which outside candidate to bring on board. The indecisiveness reflects insecurity on the part of the manager. If the candidates were that close in skills and ability, then the manager should have no fear of making the wrong decision.
http://www.bullandbearwise.com/InitialJoblessChart.asp