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Crude Comments
Of course I'm talking about oil.
Western Texas Crude looks like it has nearly completed a flat starting from the January 2015 lows. wave c is showing an ending diagonal in wave 4 or 5. The potential timing of its completion aligns with the topping of the rest of western stock markets.
http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=4&dy=0&id=p02468705498
DAX-Waves
The German DAX has 2 near term counts from the October 2014 lows to consider.
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=0&mn=9&dy=0&id=p53974160653
The first is Wave 4 correction from the mid march highs has ended.
Wave 5 is an ending diagonal in wave 4 and will start wave 5 by the end of the week. This is much more in alignment with a potential top in the US markets, but has negative implications (ending diagonal of 2 degrees and a truncation at the larger of the two degrees.
The second is wave 4 correction from the mid march highs is tracing out wave c of flat. wave 5 has not started. This would give the US more time to avoid truncation, but not avoid ending diagonals at 2 degrees.
SPX Ready for Ending Diagonal wave 5 / AAPL
wave 4 triangle may have completed; however, the price still has not broken the upper edge of the triangle. The price is deep into the corner of the triangle, so a >2% move one way or another is about to take place. My bets are on a new high. This is based on the structure of AAPL.
AAPL is finishing a month long triangle. With such a popular stock making new highs, it reflects the mood of market participants that drive other stocks as well.
SPX Triangle Complete.
With SPX futures way down, the triangle pattern looks complete. If the futures continue to slide overnight, the triangle may not have completed. If the futures drop below 2014, then wave c would be the smallest, resulting in a recount.
So I'm looking for a 45 point (ha-ha)rally off the overnight lows to confirm the end of the triangle. A rally that strong would completely retrace triangle wave e zag. It may take a couple days. Another indication would be a couple days of sideways movement out of the price channel.
I don't think Western markets are done. The German DAX has one more little rally to go, then crashes the rest of the year.
http://www.barchart.com/interactive_charts/futures/ESM5
SPX Wave 4 triangle?
The big picture count for the ending diagonal which started last year looks to be making a little wave 5 in a wave 4 triangle. Later this week into next week I would expect a sharp advance to test all-time highs before completing a multi-decade motive wave.
Time to make an SPX forecast.
The rally off Thursday's low looks very corrective.
Wave X - Double zigzag
Wave Y - Triangle, subwave d almost complete
Wave Z - expect another double zigzag.
Target of 2071 based on Wave X = Wave Z.
The most important feature of this pattern is the triangle, which indicates the next wave of the same degree will be the last wave of the larger degree.
http://www.barchart.com/interactive_charts/futures/ESM15
AAPL E-wave
I was expecting a new all-time high after the pullback from the February 24 high. The rally off the March 12 low to March 19 high was motive. The bearish count has a slight preference over the bullish e-wave counts.
The bearish count will be preferred if the price declines below $121.63 with a completed motive wave.
The bullish count will be preferred if the price rises above $129.25. There would be at least one more pullback, but the all-time highs would then be challenged.
Chuck, SPX Breaking Points
1. Above 2178 would make wave 3 the smallest wave.
2. Below 2000 would make the contracting ending diagonal distorted with wave 4 larger than wave 2.
3. Below 1972 would make wave 4 larger than wave 3.
There is a 3rd count I'm really considering.
The SPX ending diagonal is in wave 3c. This would imply a major top much more in sync with the Hang-Seng turning point in Late June 2015 I commented earlier tonight.
Heads Up on Hang-Seng
The Hong Kong Hang-Seng market is about to make a major top.
The rally from the October 2008 has been a corrective WAVE B zigzag.
Wave A from 10676 October 2008 to 24988 November 2010 was motive.
Wave B from 24988 November 2010 to 16170 October 2011 was a corrective zigzag.
Wave C 16170 October 2011 is an ending diagonal in wave 5a.
I have a target of around 25500 by late June 2015.
Once the top is in, the Hang-Seng (WAVE C zigzag) should crash at least 60%, which is the low of corrective WAVE A
http://finance.yahoo.com/echarts?s=%5EHSI+Interactive#%7B%22range%22%3A%22max%22%2C%22lineType%22%3A%22candlestick%22%2C%22scale%22%3A%22linear%22%7D
SPX blasts off.
I've got two bullish wave counts. Both are ending diagonals that started in October 2014.
1.) Wave 4 completed last Wednesday at 2039.
Wave 5 in progress.
2.) Wave 3b completed last Wednesday at 2039.
Wave 3c in progress.
Choice 2 would frustrate the most number of market participants (bears who are shorting too early and bulls who would be off the charts complacent); therefore, it would be the most likely outcome.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p52835791613
Chuck UPRO
I'm definitely seeing the large ending diagonal pattern playing out in the RUT and NYA. SPX and INDU are excellent candidates as well. The big picture has not changed since today's close. The debate is has Wave 4 of the ED from the October 2014 lows finished? The open market shows an overlapping advance off Wednesday's close. Is it triangle wave b of Wave 4 zigzag, or a very truncated Wave 5 ending diagonal of the larger ending diagonal?
Breaking below 2006 in the SPX (17222 in the INDU) without a serious challenge of the all-time highs would favor the truncated Wave 5 ED, and signal a new bear market. Breaking 1972 would eliminate the bull market count.
long term momentum has definitely decreased the past 6 months. A long term top is definitely forming. Things are definitely getting choppy as happens at major turns. Daily data is too coarse for the signal processing needed to navigate this type of market. I wouldn't play for the table scraps at this time. Wait for a better set up.
http://www.barchart.com/interactive_charts/stocks/$SPX
SPX crossroads
Overnight the SPX futures looks like a motive wave rally completed. While this eliminates a few counts, there is still no definitive direction, Flat is completing or wave e ending diagonal from October 2014 is under way. consolidation is happening this morning. wait for a break below 2040 to short, and a price above 2050 to go long.
SPX futures E-waves
http://www.barchart.com/chart.php?sym=ESH15&t=BAR&size=M&v=2&g=1&p=I:20&d=M&qb=1&style=technical&template=
Last night and today looks like 3 waves up and 3 waves down to a new low. This could be a flat or a triangle.
Another possibility is 3 waves up, and 5 waves ending diagonal down.
Both counts are calling for some sort of advance into tomorrow's opening, and maybe more.
The larger picture of an ending diagonal from the October 2014 lows remains in tact. Possibly starting wave 5 of the ending diagonal.
SPX Futures E-wave
http://www.barchart.com/interactive_charts/futures/ESH5
From the close on Monday March 2nd to the Wednesday morning low was 5 waves (motive). The rally into today's premarket was a zigzag. During the open market, the futures traced out a zigzag pullback. The choices for the near term are a zigzag to complete a double zigzag, a motive / ending diagonal to complete a flat, or three more zigzags to complete a triangle.
Regardless of which one of the three happens, a day or two of selling taking the SPX below Wednesday's low will follow. A triangle would imply a high probability of one more test of all-time highs. The other two can't guarantee a retest or a new bear market.
SPX 5 Waves up
The SPX intraday chart shows a nearly complete 5 wave move off the beginning of February 2015 lows. A 5% downward move is about to begin.
http://www.barchart.com/interactive_charts/stocks/$SPX
AAPL Long term charts calling for top in 2015.
Using Elliott waves, out of the 2003 low counts nearly complete. The shape of the chart since AAPL went public is a hockey stick. My proprietary digital signal processing filters also call for a top by the end of March 2015. As for the why this will happen, it is simply the change in investor sentiment.
INDU e-wave count eliminated
This morning INDU breached the December 2014 low, which I was counting as wave 2 of an ending diagonal. This eliminates the ending diagonal wave count in the short term. The structure of the chart from December 2014 high to present does not conform to wave c ending diagonal of a flat or wave 4 triangle e-wave rules.
Bearish wave counts of 1-2, 1-2 are favorable at this time.
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p33545644312
SPX futures show Flat e-wave
The SPX futures intraday chart shows 3 degrees of waves 1-2 since late Monday night. All the wave 1's overlap. The next degree of wave 1 or wave 3 will NOT overlap the previous degree wave 1. I count a nearly completed wave 2 flat overnight. Flats occur at the beginning or end of the largest move of the wave. This wave 3 that is about to start has the potential to drop more than 100 points (5%) in less than 2 day's time. A move like this would eliminate a bunch of bullish wave counts.
http://www.barchart.com/interactive_charts/futures/ESH5
Time to CACkle in French.
The French CAC index made a new 52 week high within the past week while I wasn't looking. This helps to clarify its E-wave count.
Wave 4 Triangle: This is a big one, 7 months long. June 2014 high to first early January 2015 pullback. I originally counted this as a bunch of wave 1-2 combinations, but now must change it.
Wave 5 Motive thrust: Classic post-triangle behavior. Last chance to get off the elevator. The wave looks complete, but the bullish count has not been eliminated. Falling below 4500 would be a hint of the top being in since the price would have broken its lower trendline. Falling below 4200 would confirm the top and reversal.
http://stockcharts.com/h-sc/ui?s=$CAC&p=D&yr=1&mn=0&dy=0&id=p24181651555
But lets step WAY back and look at the BIG picture.
Count 1:
WAVE 4 Triangle from Year 2000 high to Year 2011 low.
WAVE 5 in Wave 5. Truncating with respect to WAVE 3.
Count 2:
WAVE 4 Flat from Year 2000 high to Year 2009 low.
WAVE 5 in Wave 5. Ending Diagonal and truncating with respect to WAVE 3.
Both portend major crashes. Count 2 implies a faster crash than Count 1.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=fr%3A1804546&time=20&startdate=1%2F4%2F1999&enddate=1%2F4%2F2013&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=8&x=17&y=18
SBUX Ending Diagonal near completion
Days away from a top. And that would complete the larger degree wave that started off the 2008 lows, way down at the $7.50 area. Short now and pay for the grandkids college later.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=sbux&time=13&startdate=1%2F4%2F1999&enddate=1%2F4%2F2013&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=8&x=32&y=20
SPX Ending Diagonal morphed, but it can still be counted as a complete ED. The sharp pullback after the sharp opening overlapped wave 1, and wave 5 is still shorter than wave 3. Friday looks promising for a reversal in the US markets. The DAX may have another day or two to complete wave 5.
SPX & INDU possible ending diagonal
From Friday's low to now, there are 4 zig-zags. wave 5 started this afternoon. The ED should end by tomorrow's close.
What does that imply about the larger e-wave count?
A strong downward move to SPX 1990 initially.
Bullish case 1: The ED is actually part of a larger ED challenging all-time highs.
Bullish to Bearish case: The ED is a large degree that is failing to test all-time highs. Sharp drop to SPX 1850 over the next 2-3 weeks. I prefer this count because it is the most synchronized with the German e-wave count.
Bearish case: The ED is wave c of wave 2 flat that started in early January 2015. No precise target, other than wave 3 will be more than 160 points (Fibonacci ratio with wave 1 that started at all-time highs.
SPX Futures UH-OH.
SPX futures broke below the January 6 lows earlier today during open trading and again in the after hours trading. The choppy sell off from the late December high to present could be a wave 4 triangle of an ending diagonal. It is getting dangerously close to breaking the December 2014 low, and if broken, would negate the ending diagonal count.
It should have set off alarms that European markets RALLIED nearly 2% today while US markets sold off solidly.
US markets are looking like a waterfall crash has started and 4% moves to the downside could happen any day now.
DAX E-waves
From the December 2014 high to some intraday point Friday January 9 or 12 I see a Wave 4 triangle. Wave 5 thrust has started. Look for a new all-time high. These markets won't hold up much longer.
http://stockcharts.com/h-sc/ui?s=$DAX&p=D&yr=0&mn=6&dy=0&id=p08938443277
SPX futures up overnight.
It looks like the rally off Friday's bottom is a nearly complete double zigzag. Get ready for selling today.
http://www.barchart.com/chart.php?sym=ESH15&t=BAR&size=M&v=2&g=1&p=I:20&d=M&qb=1&style=technical&template=
Nasaravi - SPX
There is still a chance of a new SPX high in the next 30 days, but it would not be a breakout by any means. E-waves could still produce an ending diagonal or flat. The SPX would have to remain above 1973 to keep the ending diagonal wave count in play.
My spectral model indicates at least one more down day before calling a short term bottom. I need to update it 2x a day with these fast moving markets, especially this close to a turn.
The spectral models for the RUT and NYA averages have already topped and rolled over. This signals a >90% chance of a >20% drop.
SPX Futures Overnight Looks Like a Flat
wave c is in progress. Then Wave 5, and couple days of consolidation.
http://www.barchart.com/chart.php?sym=ESH15&t=BAR&size=M&v=2&g=1&p=I:20&d=M&qb=1&style=technical&template=
Model indicates markets still heading lower next couple of days.
The sharp reversal in the December bottom put some bumps in the signals I've been looking at. For short term trading, signals have cleared up, and I feel they have good enough quality to make a forecast. The 23 day scope indicates a 2-3 day consolidation while the 32 day scope indicates 3-4 days to the downside before a tradable bottom. There is still a general downside bias in the near term.
In the long term, the SPX is still in the timeframe where THE top will occur. The long term model for the NYA shows a top in place. It's often been observed that stronger stocks top later than weaker stocks. Since the NYA includes SPX and small caps stocks, and SPX model has not topped, then the small caps have made their top. This divergence among groups of stocks forms a divergence warning of a top in the SPX in the near future. Little upside left.
RUT - Best E-wave count.
From the July 2014 high to the December 2014 lows this week was a complex WXY wave in the Wave 4 position. Wave 5 is underway to complete the Bull Market. This is the type of price fluctuation at major tops.
Chuck, What a mess.
The SPX futures chart is very choppy, the open market less so. INDU has the best signal to count wave (1-2-1-2 to the downside). RUT has sold off the least of the US markets in the past ~2 weeks.
INTC has had several days in a row of opening lower, rallying to positive territory and closing lower than the open. This is incredible weakness and maybe many wave 1-2 degrees forming before a big gap down day.
IBM has started a larger wave 3.
My short term model predictor says things for the next 2-3 days are still to the downside. The predictor will need to be updated this Thursday. Longer term predictors continue to indicate at least a 20% move to the downside is in play. It's reassuring that Hindenberg Omen watchers are seeing the same potential.
On the funnymentals side of analysis. The selloff in oil is not bad because it means less profits for the oil companies. It is bad because of all the derivatives using borrowed money that have to be honored. The only way to honor those contracts at this point is to sell other investments. This has created a domino effect in global equities and currencies. It shouldn't be much longer until margin calls force more selling.
Whipsaw Action
This whipsaw action in US markets off Tuesday's low until Today's high looks like a giant flat e-wave. Drop to 1960 area of SPX has already started.
T/A Software Update
This weekend I did some scanning of the SPX spectrum. What I found were a few more active regions. I initially reported the topping of a long term (>4 yr) composite cycle expected to occur in the next 30 trading days (by end of December 2014). That hasn't changed. What I found this weekend were 3 shorter term composite cycles (34, 55, 89 days) topping. The 144 day and 223 day cycles were just starting to form the first cycle in their wave packets. So there are a whole bunch of cycles topping. They are not topping exactly on the same day; the shorter cycles should top first, and the longer cycles will top last. Most of us can understand this concept because we have read about Hurst cycles. The amazing observation is all these cycles are nearly perfect Fibonacci numbers. This begs further historical exploration of cycle activity at major market turns and crashes.
WMT wave 5 Pop - Go Short!!!
wave 5 approached and turned away from the upper line of resistance formed by the tops of waves 1 and 3. Since the price gapped up at the open, it is difficult to count 5 complete waves coming out of wave 4. Strong gaps such as this indicate wave 5 is nearly complete. With the SPX being in an ending diagonal, and WMT's ewave count at the end of 3 large degrees of trend, now would be a great time to short WMT.
WMT Intraday Update
So far, WMT is fulfilling the E-wave forecast.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=wmt&time=18&startdate=1%2F4%2F1999&enddate=1%2F4%2F2013&freq=9&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=8&x=0&y=0
The past 5-6 days WMT has made a wave 4 triangle. It looks complete. WMT may start its final rally Friday, and end early next week.
Technical Analysis Software Project
Back in April this year I wrote a Technical Analysis Software package based on spectral analysis, not Hurst Cycles. I used a spreadsheet to project the group of dominant signals. I got bored with the software and set it aside until this week. When I loaded all that market data I got quite the surprise when the projections of the model were extremely accurate to what actually happened. The model caught the major trend, but not the October dip. I wouldn't expect it to.
To the point, I recalculated the model projections. The trajectory shows nearly flat activity / top within the next 30 trading days, and heading lower over the remaining 140 days. There is no more long term upside potential. Since the SPX is above the trajectory, and expected to fall below it, now is an excellent time to short or go double inverse fund.
This model has a 90% chance of calling a direction change resulting in a market move greater than 20%. So this model is very useful for intermediate term buy-and-hold. I would need months of 1 minute data to be able to begin studies to see if the algorithms are useful for day-trading.
Agree- ED
I see it the SPX futures http://www.barchart.com/interactive_charts/futures/ESZ14 starting on November 20. Today was wave 4 triangle.
EBAY & WMT
EBAY is showing a well-defined Wave 4 flat from August 2014 highs to October 2014 lows. Since then Wave 5 is nearly completed. Today may have been smaller wave 4 pullback, or the start of EBAY's bear market. A drop the next couple of days to the low $52 area would favor the odds EBAY has topped.
http://stockcharts.com/h-sc/ui?s=EBAY&p=D&yr=0&mn=6&dy=0&id=p72357987660
WMT is showing a nearly completed five wave sequence from the 2007 lows. The ends of WAVES 1 and 3 have provided resistance to WAVE 5 that shot up the past couple of months. The rally off the October 2014 lows has completed 3 waves. This means consolidation until Thanksgiving, a pop on Cyber Monday, and finally a reversal.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=wmt&time=13&startdate=1%2F4%2F1999&enddate=1%2F4%2F2013&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=8&x=67&y=6
Choppy advance in INDU from May lows is a possible ending diagonal ( in wave 5). Volume is low and steady. Volatility is near historical lows.
The European markets are lagging the US advanced to the point where one could argue a negative divergence is occurring. France is testing its 200 DMA, as is FTSE.
Definitely a global topping process.
Ending diagonal is now very doubtful
I think US markets count best with a corrective triangle, most prominent in the NDX and SPX, which started with the January pullback. From the mid-May lows in NDX, SPX, INDU I count 5 waves up, forming at least an intermediate top. Since triangles preceed the last move of the larger degree of trend, prices should retreat at least to those mid-May lows.
SPX futures have triangles everywhere.
June 1 to June 4 morning
June 4 afternoon and overnight.
June 5 afternoon into evening
The June 4 and 5 triangles are parts of a double zigzag. The last thrust after the June 5 triangle still needs to take place.
Volume was nothing spectacular today. The VIX dropped, but did not make a new low with the market's new high. Markets are at upper trendline resistance.
Maybe Friday will be THE top?