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Friday, April 17, 2009

Banking Index Again


It very much looks like a 5 wave structure has played upwards from the triangle. Also it is hitting under stiff resistance. And the 5 wave structure I labeled in pink from the triangle area has very nice Fibonnaci relationships.

18 comments:

  1. I got squeeze the last couple of days on SKF, I was expecting a sell-off base on my own analysis SPX 867 suppose to be good resistance, but now after i review my charting i see 915-920 next resistance, I think we will get there before the end of the month and like they said sell in May and go away seem more likely then anything else or at least test the low 700. What you think do you see 915-920 if yes what are you next resistance I see 200 MA then 1050.

    TD

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  2. I've seen speculation on what event will cause P3 wave down. Some speculate a tragic event. I think it's simple. Equities will be overpriced by the end of P2 and other investments (i.e. real estate, commodities) will probably be cheap by then. P3 might possibly just be a mass exodos of money out of equities into better investments.

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  3. If I remember correctly, that's what happened in the 90's with the Dot Com stocks. They were rediculously overpriced; real estate was bottoming out from the 80's crash and money migrated into real estate for lack of any other good investments. Of course, that started us on the road to where we are today. Will same scenario repeat? Possibly.

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  4. TD yeah thats the next resistance zone

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  5. Daneric,

    First, thanks for FIVE new charts! Man, you are productive!

    Just yesterday, we thought that the ending diagonal on the SPX was complete and the top was in. Today, your new charts show more room to run on both the SPX & the BKX!

    Could the BKX rise to 45-50?

    Could the SPX rise to 885?

    If we "throw-over" 885.36, do you still think we run to 900-920? Or would you short at 887?

    Many said yesterday that next week is down. but today, some say BAC, MS, CS, and big oil will make the market rise some more next week.

    Given all of the above, are you leaning more for a big pullback next week or a big rally?

    Thanks.

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  6. Daneric-I was just looking at Afraid To Trade, and one of Corey's counts made a lot of sense to me.

    He has the move up as a Wave C of an expanded flat on the Nasdaq. It's a beautiful fit.

    http://blog.afraidtotrade.com/possible-updated-elliott-wave-count-on-nasdaq/

    Looking at the same time frame, the S&P looks like it's tracing out a running flat. In a running flat, Wave B extends far past the start of A and Wave C stops short of the top of A.

    Running flats are rare, and I ignored that possibility, but seeing the Nasdaq fit the expanded flat pattern so well makes this seem very likely. A flat in the 4-spot also gives us the right proportion (Wave 4 would be longer in timeframe than wave 2) and alternation (Wave 4 would be mainly horizontal.)

    Here's what the count would look like with a Running Flat for the 4th wave in the S&P.

    http://twitpic.com/3k6dm

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  7. SRS I am short in my trading account with FAZ and QID. I'll cover at 885.

    Steve, I firmly believe this is Primary wave 2. I don't concur with the flats. It may "look" right but when you get under th ehood and look at all the internals it just doesn;t line up at all. Not even close. There was a trend change.

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  8. Daneric,

    Very interesting chart here:

    http://i41.tinypic.com/k54kjl.png

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  9. The chart I just posted that link to is in Uner's post today on StockTock.com.

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  10. Daneric, question! I'm not in EWT.

    If you say that banks are in corrective ABC of downtrend move now while $SPX is in trend 1 wave move -

    does it mean, if confirmed, that banks will severely underperform the market for the next few months?

    I.e., when I go long I buy SPX, when I short I short banks?

    Thanks,

    Roxy

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  11. Yesterday top in BKX, does it look like a head to make the H&S target at around 28 for B wave ?

    Roxy

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  12. Stupid Question! I'm reading this tutorial:

    http://www.elliottwave.com/club/members/tutorial/Lesson3/3-3.htm

    How to tell that we observe not a leading diagonal? Bad breadth?

    Roxy

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  13. A leading daigonal is possible Roxy. But that too should correct back some.

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  14. dan, curious what EWI is saying? Primary 2?

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  15. Eric, just wanted to point out another possible objective around the 48/49 level on the BKX if C is 1.618 of A. Also, that would be around the 23.6% retracement level of the 1993 BKX low to the 2007 BKX high.

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  16. Btw, you can access EWI's Global Market Perspectives with a free sign up at http://www.elliottwave.com/ and the article is http://www.elliottwave.com/club/protected/pdf/0904gmp_club.pdf

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