AI
| Followers | 0 |
| Posts | 148553 |
| Boards Moderated | 7 |
| Alias Born | 03/10/2004 |
Tuesday, August 20, 2013 10:14:05 AM
For those who follow Elliott Wave analysis:
Is the S&P 500 ‘crashing’ now?
* Monday, August 19, 2013
This market will not likely die easily, and still has some potential moves that can yet shake the bears, assuming there are any devoted ones left. I mean, this past week, even David Rosenburg, the noted deflationist, has switched sides. But, as I have suggested for the last several weeks, we have been building a top, and our primary target for this correction is still in the low 1500 region.
When I published my last article on MarketWatch, based upon the comments I received, it was clear that everyone has bought into the infallibility of the "Bernanke put" hook, line and sinker. Many even believe that there will be no "taper" event. There is also a bullish camp out there with the perception that inflation is coming back in vogue.
But many of you now know that I not only don't believe any of it, I even view it all as irrelevant. The market will do what the market will do, and it gives us clues all the time into what it will do, if we are willing to open our minds and know how to listen.
Over this last week, we saw bulls and bears battle it out — even on the MarketWatch home page, with the bulls unwilling or unable to see the top that was recently forming, and many of the bears calling for a "crash."
As for me, I have been taking the "goldilocks" approach for weeks now. In fact, well before this debate even began, I have been calling for us to revisit the 1500 region, even though many did not believe me. But, as always, when the market enters any decline, the bears start coming out of hibernation, and the word "crash" seems to be bantered about. But let's try to put this into context, so one may understand what we are looking for in our ideal pattern setup.
After I prepared you for the June Swoon in May, for which I expected at least a 100-point decline (the decline was 127 points), and then told you to prepare for a rally a day or two before it began at the end of June, I continually cautioned that, once we moved over the 1680 region, trading further upside meant taking a higher-than-usual risk.
hree weeks ago, before we began the final push into the high of 1705ES, I noted that the ideal topping region for this move up was in the 1708ES region. However, we came up 3 points shy of that target in a truncated pattern.
With the high we have made so far, we really only completed 3 waves up in the S&P500. This classifies the top as a higher b-wave top, as it currently stands. After a b-wave, we expect a c-wave decline, which is an impulsive 5 wave pattern. While we are currently only trying to complete wave 1 of that 5 wave decline, this wave 1 will not be the "crash" which some are expecting.
Rather, this current drop will likely set up a countertrend rally which will take many out of the crash mode, especially if the market can rally up into the 1680ES region once again. It is from that top that we will see a 3rd wave down, which will feel like a crash to most market participants. But, most will no longer expect it due to the rally back towards 1680ES, which we will likely see at the end of the month.
Continued...Click here
George.
Click on "In reply to", for Authors past commentaries.
Is the S&P 500 ‘crashing’ now?
* Monday, August 19, 2013
This market will not likely die easily, and still has some potential moves that can yet shake the bears, assuming there are any devoted ones left. I mean, this past week, even David Rosenburg, the noted deflationist, has switched sides. But, as I have suggested for the last several weeks, we have been building a top, and our primary target for this correction is still in the low 1500 region.
When I published my last article on MarketWatch, based upon the comments I received, it was clear that everyone has bought into the infallibility of the "Bernanke put" hook, line and sinker. Many even believe that there will be no "taper" event. There is also a bullish camp out there with the perception that inflation is coming back in vogue.
But many of you now know that I not only don't believe any of it, I even view it all as irrelevant. The market will do what the market will do, and it gives us clues all the time into what it will do, if we are willing to open our minds and know how to listen.
Over this last week, we saw bulls and bears battle it out — even on the MarketWatch home page, with the bulls unwilling or unable to see the top that was recently forming, and many of the bears calling for a "crash."
As for me, I have been taking the "goldilocks" approach for weeks now. In fact, well before this debate even began, I have been calling for us to revisit the 1500 region, even though many did not believe me. But, as always, when the market enters any decline, the bears start coming out of hibernation, and the word "crash" seems to be bantered about. But let's try to put this into context, so one may understand what we are looking for in our ideal pattern setup.
After I prepared you for the June Swoon in May, for which I expected at least a 100-point decline (the decline was 127 points), and then told you to prepare for a rally a day or two before it began at the end of June, I continually cautioned that, once we moved over the 1680 region, trading further upside meant taking a higher-than-usual risk.
hree weeks ago, before we began the final push into the high of 1705ES, I noted that the ideal topping region for this move up was in the 1708ES region. However, we came up 3 points shy of that target in a truncated pattern.
With the high we have made so far, we really only completed 3 waves up in the S&P500. This classifies the top as a higher b-wave top, as it currently stands. After a b-wave, we expect a c-wave decline, which is an impulsive 5 wave pattern. While we are currently only trying to complete wave 1 of that 5 wave decline, this wave 1 will not be the "crash" which some are expecting.
Rather, this current drop will likely set up a countertrend rally which will take many out of the crash mode, especially if the market can rally up into the 1680ES region once again. It is from that top that we will see a 3rd wave down, which will feel like a crash to most market participants. But, most will no longer expect it due to the rally back towards 1680ES, which we will likely see at the end of the month.
Continued...Click here
George.
Click on "In reply to", for Authors past commentaries.
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
