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Frank: Clues in bonds.
One of the biggest clues is the upper channel created by highs since 1999. This spring the upper channel was broken. It indicates longer term increases in interest rates have begun. Forget the "reasons" for rising interest rates.
A set of higher highs has already formed. It is still to be seen if the yield will form a higher low compared to the lows in 2003.
The larger timeframe of these happenings indicate a longer trend of rising rates could very well be unfolding. Wating for confimation when 10 yr Tnotes turn before 3.8% and break 5.00%.
http://www.bullandbearwise.com/TSYChart.asp
If stock markets are falling, and interest rates are rising, it begins to look like investors are liquidating.
frank - ED
Aug 10 or 11 TO Aug 13 wave A
Aug 13 TO Aug 16 wave B
Aug 16 TO Aug 18 wave C
Aug 18 TO Aug 19 wave D
Aug 19 TO ???
Did wave E end in truncation on Aug 20???
There is clearly a zigzag that unfolded from Aug 19.
Waves A, C, and E took the same time to complete.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z30&date=082104&den=HIGH&evnt=off...
10 yr TSY wave count in question
Possible truncation of the last wave in the ending diagonal.
August 17 and 18th were clearly a zigzag down. August 19th and 20th were clearly a zigzag UP, but never broke the highs on Aug 17.
The best Bullish wave count would be a smaller ending diagonal may have started to end the larger ending diagonal. Another complex wave could be unfolding. If the price drops below the $112-185 level, then the bond rally has probably ended.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z15&date=082004&den=HIGH&evnt=off...
Peg- triple ZigZag looks like it will wrap up by the close.
Monday should be down.
Bonds still in ending diagonal.
The price momentum is trailing and may truncate. Turning point is near.
Price chart below
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z15&date=082004&den=HIGH&evnt=off...
On the yield chart, MACD shows the falling yield momentum is waning and a change of direction is close. The stochastic indicates the same over sold condition and is about to break above the 20 line, signalling a yield buy/ bond sell. Bollinger Bands are still wide. The yield is pulling away from the lower band, indicating a slowing/reversal in downward trend for the yield.
Yield chart below
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[dc][pd20,2!b200][vc60][iLp14,3,3!La...
10 yr Treasury Ending Diagonal
One the price chart
http://charts.barchart.com/chart.asp?sym=tyu4&data=Z15&date=081904&den=HIGH&evnt=off...
And the yield chart
Stochastics about to go from deepy oversold yield to BUY yield.
MACD is showing a loss of momentum.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[m,a]dacayyay[db][pd20,2!b200][vc60][iLp14,3,3!La...
Maybe one or two more days left in the bond rally.
Frank: Choice "A"
I'm biased by the pre-market activity.
NAZ rally closes both downside gaps.
Now could be a good reversal point.
http://charts.barchart.com/chart.asp?sym=$nasx&data=Z30&date=081804&den=HIGH&evnt=of...
Possible ED in 10 yr Treasuries.
http://charts.barchart.com/chart.asp?sym=tyu4&data=Z15&date=081804&den=HIGH&evnt=off...
61.8% retracement is close too.
Note the oversold condition indicated by the stochastics for the yield
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[dd][pd20,2!b200!f][vc60][iut!Lp14,3...
HD bonds:
Nice long term chart.
That chart indicates another corrective wave in yields could evolve over the next 12 months. Bullish
There is another possibility. The recent highs in the yield broke the upper trendline since the generational highs in the early 1980's. Bearish
Bonds may have turned.
Look at the bollinger bands on the yield chart. The yield is pulling away from the lower band and the bands are still widening to allow for more volatility. The Stochastics indicate the yield very oversold, and the yield should rally. The huge rally in the yield is against the larger trend pullback from the 5% area.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Naz Composite Upside Target
I think this rally is corrective in nature. There are gaps that need filling around the 1820 area. That would be close to a fibonacci 50%.
http://charts.barchart.com/chart.asp?sym=$NASX&data=Z60&date=081604&den=MED&evnt=ADV...
Nikkei falling again.
It's getting gappy.
Looks like a possible wave 3
Compare the NASDAQ to the DOW. The lower trendline on the DOW is much lower when connecting the same relative lows. How would that change you view?
Frank- ED
In terms of wave count, are you counting an ending diagonal of a C wave? If the underlying trend is truly down, and ED at this point doesn't make sense. An ED shows a weaker, larger trend and possibly a larger trend reversal.
It's still a corrective move ,
From August 7th, the DOW looks like it is in a complex corrective move. Today's lows did not break the lows of August 7th, But the upper trend channel was broken. The price is near the 33% area. 38% is ideal, so there may be another little 20 pt push.
http://charts.barchart.com/chart.asp?sym=$INDU&data=Z30&date=081104&den=HIGH&evnt=of....
NASDAQ composite could be an expanding flat with waves 3c, 4c and 5c to be completed. A more bearish count would be wave 2 of 3 of 3 and a big drop tomorrow.
http://charts.barchart.com/chart.asp?sym=$nasx&data=Z30&date=081104&den=HIGH&evnt=of....
Looks like today's bounce is a little wave 2 rally fast approaching a massive wave 3 gravity field by tomorrow.
Comments by CSCO are not helping any. They are at odds with the gov't's view of the economy.
UHHHHGLY
Jazz- Good call
NAZ composite futures are 27 pts lower. That's a lot for overnight/premarket.
Initial Jobless Claims.
Initial Jobless Claims continue to battle the 350K level as resistance to the upside. The wave count looks like a 1 and 2 to the upside. Confirmation has not been made. The upper channel formed by the highs between 5/03 and 4/04 has been broken as the number of claims have moved sideways.
http://www.bullandbearwise.com/InitialJoblessChart.asp
This chart and ewave analysis should have left economists with no "surprises" this past week. The surprise from my view is these people and the Bureau of Labor Statistics are still allowed to have jobs.
Bonds are a surprise.
I thought for certain that the bond rally was over in July. Nope! This week proved there is panic buy despite the FED's position to raise rates "measurably".
The Bank of England's decision to raise short term rates has to put some pressure on Greenspan to do the same. World investors seeking the best return would look at the difference between yields in the UK and the USA and choose the UK since it has a greater return.
Fighting among the Ewave Bears
McHugh has published his bearish wave count at Safe Haven. He views the end of July as a truncated wave 5 of C
http://www.safehaven.com/article-1840.htm
Others view wave C finished earlier this year at the high of the year, without truncation.
Maybe the only confirmation needed is that bears agree multi month WAVE 3 is under way.
Frank: ED/TD
The NAZ looks a little stronger than the DOW. It could be a very quick rotation from Blue Chips to Techs. Wave D looks disproportional and should probably drop one day before wave E starts.
The DOW looks more and more like and ED. Wave D was today, a descending triangle. The wave D triangle looks disproportional compared to wave B, The late day rally could have ended in the after hours.
Getting close to a big market reversal.
200 DMA Retesting
Many of the world markets are retesting the 200 DMA. The NASDAQ is by far the laggard. If the ending diagonal Frank and I think will play out wraps up today, the 36% retracement will have been from the wave a of the running flat.
With the bond prices set to turn down, that may be viewed by investors as inflationary. Higher borrowing costs would diminish future stock values with little pricing pressure.
Stocks and Bond prices are more or less starting to move in phase. This is long term bearish for financial markets. Money rotation is being replaced by being in or out of the market.
10 yr TSY target = $107 26/32
Over the next several trading days
This is based on fibonacci ratio of 1.618 and wave 1 of 3 extended = $1.375.
Bonds' Ewaves Getting Exciting.
Today's rally in 10 yr TSY prices gave the market more air for the next sudden drop in prices. The wave structure looks like a fully completed zig-zag wave 2 of extended 3. The earlier retracement looks like a zigzag too. It is unusual, Prechter would say never, for waves 2 and 4 to both be zig-zags. This favors a wave 3 extension taking place. The futures market has a slightly downward bias that has broken the zag's lower channel support line.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z30&date=071804&den=HIGH&evnt=off...
Now switch to the yield chart for other technicals.
The MACD is giving a yield buy/ bond sell.
The Bollinger bands have slowed it's rate of pinching and is about to blossom. The yield penetrated the upper band a second day in a row, and with a relatively tight range for the day.
However, the stochastics indicate the yield is overbought, the bond oversold. Long trends will produce over--- conditions for a long time.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]daclyyay[db][pb50!d20,2][vc60][iLp14,3,3!La1...
Frank: Ending Diagonal
I agree with the ED possibility, and as a Wave C in a running flat. Let's save the debate on the flat as Wave 2 or Wave B to a later time. For now, let's prepare for the slide about to unfold.
What are Cycles for DAX and FTSE?
How do cycles for the DAX and FTSE compare with the DOW or SAP in the US? The elliott waves are choppy in the US, but better defined in Europe.
Retest Rally.
Since moday's lows, the Dow has made a strong move to the upside. It looks like a zig-zag. Overnight, europe played catch up, and a very strong one. This rally may be the final test of the 200 day moving avg before the long slide.
Bonds come up for air
It looks like the next move for bond prices will be down. The chart shows two distinct waves to the downside. They could be waves 1 and 3 since today's rally did not overlap wave 2.
The first retracement was 50% of the wave falling from the 111-120 area.
Or they could be even more bearish wave 1 larger and wave 1 of an extendeing wave three. The motive waves are about the same length of $1.375. The rally after the morning gap down retraced nearly 38.2% of the wave 1 of wave 3 extending falling from the 110-240 area.
The retracements are imbalanced. The first one took longer to complete and retraced more of the prior wave than the second one. You would almost expect that with wave 2s of different degree.
These are some really solid fibonacci ratios in the bonds.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z15&date=071804&den=HIGH&evnt=off....
Three things are holding back the bond selloff:
1.) The 50 Day moving avg in the yield chart is immediate resistance.
2.) Upper bollinger band in the yield chart is immediate resistance.
3.) Stochastics indicate the yield is nearly overbought levels and is due to consolidate.
The yield poked above both at the opening, but closed below both. More testing may be going one the next day or two.
THe alternative bullish wave count is a zigzag with another test of highs. This is low probability, since the retest of the 200 DMA failed miserably.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[db][pd20,2!b50][vc60][iLp14,3,3!La1....
The DAX and FTSE look like they are near the end of a running flat. The DOW and NASDAQ should advanced a little more today to complete their flats.
The world markets are split on the 50 day moving average crossing the 200 dma. Toronto, DAX, Nikkei, and CAC40 have their 50 dma above the 200 dma. The NAZ, HangSeng FTSE, and DOW have the 50 dma crossing below the 200 dma. There is a lot of weakness in the major world markets.
10 yr TSY price target
$108-16/32 most likely tomorrow. This is based on today's selloff being an unfinished wave 3 of 3 and fibonacci ratio of 1.618 with wave 1 of 3.
This pullback of recent price highs in the bond market has been kind of quick. I wonder how long it will be until the stock markets "react" to it?
Bonds Gone Wild:
Today was pure wave 3 action in the bond market. Yields on the 10 year Tsy shot up more than 2.5%
http://finance.yahoo.com/q/bc?s=^TNX&t=5d&l=on&z=l&q=l&c=
There is some resistance ahead by the upper bollinger band and the 50 day moving average. The consolidation will consist of a small wave 4 and eventually a larger wave 2.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
The long term bearish indicator is the "test" of the 200 day moving average wasn't even close. Bonds are going through a summer meltdown.
NASDAQ intraday chart
The past several days has formed a triangular shaped pattern. It it not an Elliott wave triangle though. The upper edge of the triangle has continued to should strong resistance, but the lower edge ( made by lows on 7/19, 7/22, and 7/23 )failed as support today. The lower edge is now resistance. The closing rally hit this resistance.
Let's see how strong the resistance is tomorrow. Keep in mind that the upper edge is also resistance.
http://charts.barchart.com/chart.asp?sym=$NASX&data=Z15&date=071804&den=HIGH&evnt=of...
10 YR TSY Yields
The bollinger bands continue to close durign this relative bottom. In a few days the yields should make a noticeable move to the upside.
The MACD rose above the signal, giving a "BUY YIELD/SELL BONDS". This is after many weeks of consistent downward movement.
The Stochastics gave a "BUY YIELD/SELL BONDS" a few days ago. There is still room to go until yields are overbought/ bonds oversold.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]daclyyay[dc][pd20,2!b200][vc60][iLp14,3,3!La...
Frank: Can't pull trigger.
Maybe this is one of the larger moves to the downside about to happen where "everyone" gets caught off guard. The feelings you shared as an experienced trader supports this position.
The tech chart that best shows this balance of emotion is the NASDAQ Bollinger bands. The B. bands are now sloping down in parallel on the NASDAQ. The price continues to move down in the lower channel, but isn't breaking below the band. This is the same type of strength seen in long running rallies. Now that the trend is down, the trend should continue a while longer.
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[w,a]daclyyay[dc][pd20,2!b200][vc60][iLp14,3,3!...
xe2dy: Protimer
There are some very bearish technical indicators for gold and bonds at odds with the results from ProTimer. It might be a good idea to take a wait-and-see approach with those investments.
Thanks, Cash.
That's the type of intro I really wanted to see.
Market Cycles Intro:
I found an introduction to cycle analysis by Tim Woods. It may be helpful to others, like myself, unfamiliar with cycle analysis.
http://www.financialsense.com/Market/wood/2004/0507.html
Market Cycles Intro:
I found an introduction to cycle analysis by Tim Woods. It may be helpful to others, like myself, unfamiliar with cycle analysis.
http://www.financialsense.com/Market/wood/2004/0507.html
Naz was choppy today.
The Naz only dropped 45 point of the 60 points I called for. The good news is the wave count is still in play for more downside next week. It looks more like several wave 1's and 2's getting ready for a massive 3. Or it's a continuation of consolidation for the next move down.
The Stochastics are completely oversold. The price keeps coming close to tagging the lower bollinger band, but just doesn't have the momentum behind it. The market may very well take a bounce.