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NAZ drops more that 60 points tomorrow
I've got my BEARings on the NAZ wave count.
Today's bounce rally perfectly retraced 38.2% of the 79.45 point drop from Wednesday's opening high. The wave structure looks like a WYZ wave 2 correction.
Highest probability for wave 3's downside target are based on Fibonacci relationships as shown below:
(wave 3 = 1.618 * wave 1 = 128.55 pts, 6.5% ) NAZ = 1764.43
(wave 3 = 2.000 * wave 1 = 158.9 pts, 8%) NAZ = 1734.08
http://charts.barchart.com/chart.asp?sym=$NASX&data=Z05&date=072204&den=HIGH&evnt=of....
FrankP3: MSFT wave count
I covered the MSFT waves Tuesday night when the news broke. I called a gap and crap day for Wednesday. Here is the recap:
Long term WAVE A from year 2000 top is done
Long term WAVE B from 5 year low is probably done. I have a triangle count for it.
LONG term WAVE C started on Tuesday Night/ Wednesday Morning.
European markets find downside support.
The Dax and Ftse gapped lower at the opening and then moved sideways. The level of the gap down are relatively the same as the closing of day long sell off in the US yesterday.
Slight bounce then sideways trading for today in the US. The end of the day could start a selloff to be finished on Friday.
NAZ Bollinger bands opening MORE
The NAZ is about 60 points from touching the lower B Band. The downward momentum is pretty strong. It's very likely the band will be tagged tomorrow.
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[w,a]dacayyay[db][pb50!d20,2][vc60][iLp14,3,3!L...
Market Comments
I'm having difficulties counting the waves from NASDAQ's highs today. There are few if any overlaps to indicate wave 2 or 4s. Could it be a bunch of wave 1's and 2's? That would mean a very strong bear market is under way. 10% drop in 2 weeks? Crash by September '04 ???
The bonds continue their reversal. It looks like there will be a small sell off tomorrow morning and then trading in a range the rest of the day.
SELL MSFT!!! Target Reached
Price in Europe hit $30.65. This is in the area of the upper trendline of the multimonth WAVE B triangle. SELL, SELL, SELL
DOW upside targets.
38.2% retracement = 10225
50% retracement = 10275
61.8% retracement = 10325
The 50 DMA, 200 DMA, and middle of the bollinger bands pose significant overhead resistance around the first target. This rally should test these levels, possibly today, before heading much, much lower.
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!...
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]dacayyay[db][pb50!b200!f][vc60][iLp14,3,3!L...
German DAX upside target.
38.2% retracement = 3905.77
50% retracement = 3943.08
61.8% retracement = 3980.37
The wave structure looks like a zig-zag even though the price is 7 points shy of the first target. There should be and A-B-C rally unless the larger downtrend is super strong.
http://finance.yahoo.com/q/bc?s=^GDAXI&t=5d
http://stockcharts.com/def/servlet/SC.web?c=$DAX,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L...
NASDAQ upside targets:
The short term areas of interest, bear or bull, are
38.2% retracement = 1941
50% retracement = 1963
61.8% retracement = 1984
Since the NASDAQ closed at 1917, there is still a good 25 points to rally before the first target is reached.
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3...
MSFT is a market holdout:
Today's great news from MSFT about big payouts to shareholders gave MSFT a nice lift in afterhours trading.
My elliott wave count indicates the party will be short lived.
Since the lows in July '02, the wave pattern that jumps out for MSFT is a WAVE B triangle.
Wave A is from $30.70 to $29.48 length = $8.78
Wave C is from $22.55 to $30.00 length = $7.45
Wave E is from $24.01 to something less than $31.49
The reason Wave E should end at something less than $31.49 is anything greater would make Wave C the smallest of the motive waves, a violation of the rules.
The line connecting the tops of Waves A and C extend to the $30.50 area over the latter stages of Wave E. After hours price of $29.91 gives limited upside potential the next week or so.
http://stockcharts.com/def/servlet/SC.web?c=MSFT,uu[w,a]dacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!L....
Once MSFT tops, the rest of the market should head lower very quickly.
If my long term wave count is correct, in a year or two, you should be able to load up on MSFT shares in the single digits.
Bond-zai!! BondsAway!!
This is the type of hard reversal in the yield I was looking for. Interest rates should have a prety good rally since as ALL tech charts are sending the same message. The yield chart is leading the indicators by a day or two.
The Stochastics look like they will exit the "oversold" area and signal a buy on yields / sell the bonds tomorror or Thurs.
MACD has come very close to crossing the signal twice in the past few trading session. The MACD is also bottoming and set for a reversal.
The yield is pulling away from the bollinger bands. The Bands have been parallel and both pointing down. The price should rise quickly to the upper band and pause. This will give the bands time to pinch, and reverse course.
This area of consolidation will also be near the 50 DMA. The yield chart will test the 50 DMA as resistance. Once broken it will be tested for support.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[db][pb50!d20,2!f][vc60][iLp14,3,3!L...
Bond meltdown continues.
MR_USA_1992: your charts.
What were those averages, channels or bands on the last chart you posted? It looks like a 50 DMA using just the daily lows, and another using just the daily highs.
How does this work as an indicator. What signals BUY or SELL?
TIA
Nikkei Gapped below 50 DMA.
The Nikkei has been flirting with the the 50 DMA for a few weeks. I think the 50 DMA finally broke down as support. This could be a wave 3 of 3 of 1 underway. If so should drop another 750 points quickly.
http://stockcharts.com/def/servlet/SC.web?c=$NIKK,uu[w,a]daclyyay[db][pb50!b200][vc60][iUb14!La12,26...
Battle line on the DOW
The 50 and 200 DMAs are converging at what looks to be the wave 4 of the sell off from the 10500 levels around June 21. If in fact a wave 4, then a larger wave 2 bounce in the coming days would retest the DMAs now as resistance. This could get interesting.
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu[w,a]dacayyay[dc][pb50!b200][vc60][iLp14,3,3!La1...
10 yr Treasuries:
Both the yield and price charts for 10 yr treasuries indicate extreme overbought conditions on the stochastics. This condition has lasted for 3 trading weeks now. On the price chart stochastics you can see a 5 wave rally sequence from April '04
On the yield chart you can see the 200 DMA supporting the yield. Being so close to the 200 DMA the yield may make one last effort to test it. It the yield fails to touch the 200 DMA, then the underying bullish trend in yields (bearish trend in price) is very strong.
http://charts.barchart.com/chart.asp?sym=TYU4&data=A&date=071804&den=MEDHI&evnt=off&...
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]daclyyay[dc][pb50!b200][vc60][iLp14,3,3!La12...
Judging by the eroding price in GS LEH MWD JPM, I would say there is a financial meltdown in the works.
China placing $1B bond offer.
Instead of selling the us treasuries they are buying at low yields, they are borrowing at a higher interest rate. The article goes on to say China admits it doesn't need to borrow the money. As usual, things are not as they appear, and editorials have to spell out what the front page story omits.
There is sufficient financial evidence China is trying to strangle the US financially. They control a large portion of our debt and they are now competing with the US for international investments. The US should be experiencing sharply rising interest rates any day now. I doubt they are do the US any favor by borrowing at high rates and lending at low rates. That's the US gov'ts problem.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=108...
World markets and 200 DMA
Japan's Nikkei tested the 200 DMA in May '04. The index is about to drop below the 50 DMA. The 200 DMA is about 250 points below. The 50 DMA is sloping downward indicating it will cross below in the near future. This is in the best shape.
http://stockcharts.com/def/servlet/SC.web?c=$nikk,uu[m,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&...
America's DJIA shows the 50 DMA, index, and 200 DMA all converging. The index did break below the 200 DMA for 2 days, but confirmation is needed. A further drop below the 200 DMA will probably startle investors. Prgrammed trading undoubtedly will used the 50 DMA crossing the 200 DMA to take some sort of action.
http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[m,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&...
Germany's DAX has broken brlow the 50 DMA decisively and penetrated the 200 DMA. The price tried to rise above and bounced back. The DAX has only spent 2 days below the 200 DMA, so more confirmation is needed to this bearish warning. The 50 DMA is getting close to approaching falling below the 200 DMA. Now that would be very bearish.
http://stockcharts.com/def/servlet/SC.web?c=$dax,uu[m,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&a...
England's FTSE bounced along top of the 200 DMA for two or three months, gave a head fake to the upside, and has spent the last 2 weeks below the 200 DMA. The 50 DMA is poised to drop below the 200 DMA.
http://stockcharts.com/def/servlet/SC.web?c=$ftse,uu[m,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&...
China's Hang Seng has been trading under the 200 DMA since May '04. There was one failed retest rally of the 200 DMA. What's worse is the 50 DMA has been under the 200 DMA for several weeks now. This is the most bearish of the charts in terms of the 200 DMA. The irony is the world thinks China's economy is doing the best.
http://stockcharts.com/def/servlet/SC.web?c=$hsi,uu[m,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&a...
PHI time relationships in DOW
There are about 12 of these relations since the 2000 top.
Next low is anticipated on 9/7/04.
More importantly, this report looks at multiple charts as a system.
http://www.safehaven.com/article-1773.htm
Financial Sector falling off cliff
The following is a chart of LEH, but the chart is very similar for JPM, GS, and C. Wave 2 looks done, and a motive wave to the downside indicates Wave 3 is under way. There is still a chance for wave c if wave 2 needed more time to consolidate. Ironically FRE is making new 52 week highs this week, but FNM is finishing wave 2 ZigZag up of its new bear market.
During Wave 1 the stochastics stayed in the oversold are for about 6 weeks. The stochastics are showing very similar conditions now.
MACD indicates momentum is to the downside.
The price is riding the lower bollinger band lower as the bands expand to accomodate more volatility.
http://stockcharts.com/def/servlet/SC.web?c=LEH,uu[w,a]dacayyay[dc][pd20,2!f][vc60][iLp14,3,3!La12,2...
Wow, this is going to get ugly fast.
DOW 10yr/monthly chart
This first thing I notice is the Bollinger band, while pointing up in parallel, the price tagged and bounced off the upper band after a considerable rally. I think the index will continue to move to the mid channel in the near term. That would be about DOW 9500. Parallel trendline channels from Oct '02 would still look good. This keeps some of the bullish wave counts active. A break below 9100 would pretty much invalidate the bullish wave count.
The next thing I noticed was the MACD. It ticked down the first time in 17 months. Upward momentum is definitely slowing. MACD can give false buy/sell signals. Coupling MACD with e-waves would be better for both.
On Balance Volume OBV is rolling over as selling pressure increases. There is a lot of overlap of volume trends, just like the DOW. There is no real increase of holdings as the DOW moved sideways the last 4 years. It's distribution, not accumulation.
The Relative Strength Index RSI is crossed into the strong area and then reversed after a few months. The index is pointing down and close to entering the weak area again.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=djia&time=8&freq=1
ClearStation Charts info
I tried annotating Clearstation charts, but they only have support/resistance levels and trendline capability. I saw no indication of inserting test into a graph. I looked at Mathais' post and recognized a graph that was generated by Yahoo tools. Maybe Clearstation allows graph insertion similar to the way InvestorHub does. That means you would still have to pay a membership fee to Stockchart to be able to save annotated charts for any time scale. :o(
Lana: Mathais
If this selloff turns out to be a fibonacci raelation of the Move from the Jan '04 highs, there may be a chance of a rally to a new high. The index has to drop further first.
If Mathais can edit graphs on Clearstation, then I'm going to try. It's much easier to convey patterns graphically.
BONDS RALLY HARD
Yesterday around 11 AM the 10 yr Trsy started wave 1 of the "one for the road" rally. This morning wave 3 started and ended. It looks like wave 4 started at 10:30 and ended around noon. The rest of day was wave 5. There may still be a little more rally into Monday.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z05&date=071604&den=MEDHI&evnt=of...
On the yield chart, the Stochastics are still very oversold. The yield just missed tagging the lower Bollinger band. The MACD histogram has been going steady for 2 months. The signals are at extreme and giving conflicting buy and sell signals, so there may still be more drop in the yield next week.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]dacayyay[dc][pb50!d20,2!f][vc60][iLp14,3,3!L...
This is a good example of a post triangle rally. The triangle started on July 2. Wave e of the triangle is also a triangle.
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z45&date=071604&den=HIGH&evnt=off...
Too much Wave Overlap
In the late June to early July time, the NASDAQ composite shows well formed sell off motive waves. The last week and a half is difficult to detect sell off motive waves due to overlapping. Even though there are lower lows and lower highs, the lows are starting to flatten. Momentum is waning to the downside. A relief rally is probably due. Stochastics are still oversold.
http://charts.barchart.com/chart.asp?sym=$NASX&data=Z60&date=071604&den=MED&evnt=off....
Jazz,
You build a good case at the intraday level. The FED has been printing a lot of money lately. At the larger timeframe, the DOW has been making lower highs and lower lows. This is bearish.
http://charts.barchart.com/chart.asp?sym=$indu&data=A&date=071504&den=MEDHI&evnt=off...
I wonder if the FED finds any value in Elliott waves? Their timing for printing more money co-relates fairly well with market tops so it is ready when the market starts to slip. The FED wrote a white paper using adaptive system parameter estimation to model the economy so 5 year plans could be made accurately. The result was the model was only accurate for predicting 2 years in advanced. Anyone who has taken signal processing classes should be able to explain what is happening.
Initial Jobless Claims
Last week saw the Initial Jobless Claims make a sharp new multi year low. This week nearly retraced all the gains from the prior week. The upper channel resistance line connecting the highs over the last year may have been broken. It's close. Another week to two could do it. It's sort of like a "blowoff top".
http://www.bullandbearwise.com/InitialJoblessChart.asp
Bond price triangle
This indicates the 10 yr treasury price is about to break out of consolidation mode. The lower trendline was broken, so this throw-under indicates a rally. Price movements following triangles can be short and swift, or just monstrously prolonged. The short and swift target is around $111.
http://charts.barchart.com/chart.asp?sym=tyu4&data=Z10&date=071504&den=HIGH&evnt=off...
Chris: More GE
GE long term waves indicate multimonth wave 2 could still be under way. The first fibonacci retracement (38.2%) has not been reached; however, the retracement has made it into the middle of multimonth wave 1's multiweek wave 4.
A classic Fibonacci retracement would be a price of $36.49. A 5-10% gain in a couple weeks might feel great, but the rest of the world's markets are tugging lower. Sell/short if the price rises above $36.00 or falls below $32.20. Hold anywhere between.
Chris- GE:
It's tough to say. There is a case to me made for limited bull or new bear. The stochastics are getting close to overbought. The wave count from late June to July lows cuold be counted as a 5 wave bearish motive, or 3 wave bull correction. From the July lows, GE has retraced more than Fibonacci levels, this gives gives an unconfirmed bullish bias. The wave off the July lows looks like a zig-zag consolidation in a new bearinsh trend, or waves 1 thru 3 in the last bull rally. A bearish count will break $32.20 without making a new high. A bearish cont will not break $32.50 before making a new july high.
Even if the January highs are breached, I don't see GE rallying the rest of the year.
http://charts.barchart.com/chart.asp?sym=GE&data=Z30&date=071404&den=HIGH&evnt=off&a...
Bond yields closer to turn:
The MACD started moving higher today. Crossing over the signal would be a Buy Yield/ Sell Bonds. The stochastics are forming a rounded bottom, indicating a coming trend change. The Bollinger bands are opening wider and to the downside as if to say, "One more yield sell off for olde tyme's sake."
It could be a very sharp yield sell off and new multi week yield rally any day now.
http://stockcharts.com/def/servlet/SC.web?c=$TNX,uu[w,a]daclyyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
AMD in wave 3 of 3 of 1
Wave 1 0f 1 started around 6/30/04
Wave 3 of 1 started around 7/9/04
AMD is now set to start wave 3 of 3 of 1.
Using fibonacci ratios (1.618), AMDs price has a good chance of falling at least to the $13.00 level by the end of the week.
http://clearstation.etrade.com/cgi-bin/intra?tic=1-month&cs=&ci=None&Symbol1=AMD&i1=...
Did Bonds Truncate?
The yield chart shows the yield to be extremely overbought. Today the Stochastic crossed the trigger. Confirmation should be made when the signal and trigger rise above the 20% line.
Downward momentum is slowing according to the MACD Histogram. That's the blue chart overlayed upon the MACD and its signal. Again, confirmation of the MACD and the signal to rise above the 0 line.
The bottom bollinger band ticked up, as if to prevent the yiels from fallinf further. Both bands are now in the pinching process.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1....
The price chart for bonds since the June lows is advancing, but just doesn't have the 5 wave segments common to motive waves. Today's gap is in the wrong direction for an exhaustion gap. The downward force on bond prices may be too much to make new highs. Best bull count is today completed a consolidation, and one more run to new highs. The others are bearish
http://charts.barchart.com/chart.asp?sym=TYU4&data=Z60&date=071304&den=HIGH&evnt=off....
Ziggy: Money Rotation.
I chose to profile GE and LMT, but they are somewhat indicative of the larger market. If the larger market looks like it has a limited upside, and bonds are showing a limited upside, then money really isn't completely rotating. It's polarizing in sync. This is not a good indication for financial markets. Once both stocks and bonds begin to sell off, each camp will see the other falling and go to cash.
10 yr Tsy yields. More
The Lower Bollinger Band is opening at an even faster rate today. I've seen in the past a price of index will drop quickly to the band. This late in the trend would be a shakeout/blowoff, especially with the curving path yields have taken the past several weeks.
Though oversold, the Stochastics are pointing lower.
The MACD indicates momentum is still strong to the downside.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
Bonds are so close to making a major trend change.
LMT and GE updates:
GE's rally blew past the 38.3% retracement levels and edged past the 50% retracement level. Elliott wave structure looks like a nearly complete zag of a zig-zag. $32.73 is the target area coresponding to a 61.8% retracement.
http://charts.barchart.com/chart.asp?sym=GE&data=Z60&date=071204&den=HIGH&evnt=off&a....
LMT's momentum is waning as it approaches the $55 level. The last two days have been upward, but a clear 5 wave pattern is difficult to detect, as would be leading up to a rounded top.
http://charts.barchart.com/chart.asp?sym=lmt&data=Z60&date=071204&den=HIGH&evnt=off&....
Maybe a day or 2 for these patterns to finish.
10 yr Tsy yields
Just look how oversold the yield is on the daily stochastic!!! I think the yield shakeout lasts the rest of this week only to get very ugly after that.
http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[dc][pb50!d20,2][vc60][iLp14,3,3!La1...
BZH: Housing bubble popping
Take a look at the huge ending diagonal wave for Beazer Homes from March '03 to March '04. Support in the high $80s is about to be taken out, then a freefall.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=msft&time=&freq=
MSFT wave count
==========
Long term:
==========
Bear market wave 1: all of year 2000.
"Bull" market rally:
Wave A: first 6 months of 2001
Wave B: mid 2001 to mid 2002
Wave C: mid 2002 to mid 2004:
Notice the wave time progressing in the "Bull" market rally: .5 yr, 1 yr, 2 yr. This is purely parabolic. y = x^2
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=msft&time=&freq=
===========
Short term:
===========
"Bull" Wave C mid 2002 to mid 2004:
ending diagonal, or complex WYZ. Since Wave Z or wave e of C has not moved above Wave Y or wave c of C, there may be some near term upside. If the pattern is complete, then it is a truncation and prices should move lower very quickly.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=msft&time=&freq=
Sorry, Mr. Gates.
LMT update:
LMT has two strong wave counts:
Case 1) LMT retraced 50% early in its consolidation. The stochastics presently show overbought conditions. The price could very well test $55.00 again before starting multimonth wave 3.
Case 2) LMT could retrace to the $59 area. This would be a 61.8% retracement, and make wave 2A = 2C. Stochastics can remain overbough for some time before the real sell signal is made.
http://stockcharts.com/def/servlet/SC.web?c=LMT,uu[w,a]wacayyay[df][pb50!d20,2!f][vc60][iLp14,3,3!La...
Denmo: compq chart
There is another set of channel line I'd like you to add.
Start with the April '04 highs and draw a downward sloping line through the Mid-June consolidation around 1980 level. Draw a parallel line starting at the May '04 lows.
This channel would show the market gave a head fake higher and is returning to a longer term downtrend.