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Friday, April 18, 2014

E-minis


Thursday, April 17, 2014

Elliott Wave Update ~ 17 April 2014

There is not yet a 5 wave impulse pattern down on any of the major indexes. Except the banking sector is looking better as an impulse down than not. So we must use wave counting theory and assume a new high could be coming.
In light of the short term wave evidence, prices point to a new, perhaps only a marginal high in likely the SPX and Wilshire5000. The NASDAQ and other indexes? Not so sure.
Or a potential new high could count like this if it achieves a more classic "extended [v] of 5" look. Price target: Yes, 2000 SPX.

E-minis


Wednesday, April 16, 2014

Elliott Wave Update ~ 16 April 2014

Three waves down since the all-time high. That is corrective by Elliott Wave rules (unless it is a series of ones and twos down).  So the primary count has to strongly consider that new highs are coming:
We have a more classic extended wave [v] of 5 count shown in the SPX. Either way, both charts suggest the same thing so don't get hung up in the squiggles. Target 2000 SPX if this count pans out.
The count of a series of ones and twos down is not likely because the subwave two is bigger than the higher degree wave two which is less than ideal in EW theory.  You can see this with simple channel line overlays. In a nutshell, the second wave two rebound is bigger than the first wave two which makes it not likely a second wave two and thus the count is suspect.
The best bear count I can come up with since the all-time Wilshire500 high is an expanding leading diagonal triangle count and it would look something like this below:
Here is the gold updated chart. I noticed MISH was pounding the table for gold and linking an article on how Goldman was saying gold is going to $1050 yet you shouldn't listen to Goldman Sachs because they frontrun the "muppets" (public). This is of course probably true that GS does frontrun the muppets but in the case of GS's $1050 target for gold there is an EW pattern that does indeed point to this $1050 price target.

Is everything a contrarian play with GS's calls as Zero Hedge often suggest (and prove to be mostly right)? If Goldman Sachs says gold is going to $1050 should you take the opposite stance? In this case the wave pattern suggests that GS may be perfectly correct in an eventual downside target of $1050 in gold. That is where support lies.

A price rise above $1392 would invalidate the wave 4 triangle.


E-minis


Tuesday, April 15, 2014

Elliott Wave Update ~ 15 April 2014

Still holding the channel line. Prices have tried to rapidly advance up and away from this channel line. That means the market likely deems it important.
Consolidating for a further decline or establishing yet another pivot low and continuing the 2 year uptrend? Some sub indexes look pretty sickly so the bears definitely have a case to be made. However we need 5 wave impulse patterns down on some oif the main indexes before we can count the market as going lower in an impulse pattern. Don't see it yet on the INDU, SPX nor Wilshire5000.
Wilshire 5 minute chart shows the conundrum the market is in.  Basing for a move up or consolidating prices for a big lurch lower?  The most bearish count is shown below (series on ones and twos down)
This weekly says it all. If the lower red channel line is broken, then we can say an EW channel has finished and a new structure is probably beginning.. Thats it in a nutshell really. There has been some sort of Elliott Wave Structure in place since the pivot low in June of 2012. One degree or two above that there has been an EW structure since the 2009 low. And that EW structure since the 2009 low still takes the form of a "three", which is corrective by rules of Elliott Wave theory.

Monday, April 14, 2014

Elliott Wave Update ~ 14 April 2014

The overall 2 year uptrend is still intact. We certainly have a count if new highs are coming. Its certainly curious that the opening gap up today was filled and then prices rose vigorously. We shall see what that portends. Sometimes I take a covered gap as the one that occurred today as a signal that market makers are covering their tracks so that further advances don't present those bear target big open gap fill price moves later on.  In other words, they mean to take prices higher.
Or using the SPX weekly we still have a valid extended Minor wave 5 count as the last Zweig Breadth thrust may not yet be "expended". This ZBT event is still important in my book. I dismissed the first two too quickly and the third has managed to maintain a certain momentum also. 

Oh the ZBT will eventually exhaust but when is what we count waves for.
Simply put, we don't yet have a 5 wave pattern down - even on the all-hours e-minis - to indicate a trend change (nor has the uptrend channel or previous pivot supports yet been broken.)
One bearish possible count that will yield a "five down" is shown here on the Wilshire 5 minute chart:
Elliott Wave International's top count is a series of ones and twos down. That count has rarely worked in the past but just because it has failed too many times to mention as a viable count from the top, doesn't mean that this time might not yield something different.

Conclusion. They bought the gap close today quite vigorously. It also happened to be major lower channel support so its not surprising.
If lower channel support is smashed through - such as in the bearish [i]-[ii], (i) - (ii) count just above, then yes might have some serious selling coming at us.

In the end we have to let the market show us its hand. It has kept it hidden, as it usually does, quite nicely. We have options on the next major counts and we eagerly await.