I 'll just say that Elliott Wave International just issued an update that the whole month of April was a correction in the form of running triangle. I have suggested several times over the last few updates (indeed my last night's update on the DOW seemed to be mirrored in EWI's update tonight verbatim - I think they read my blog) that these appear to be triangle waves and indeed I have offered a few variations on what that triangle could be.
The yeast keeps rising.
Permabears want that nice pullback. They want affirmation that they aren't somehow "screwy in the head". There is no way to do a 3 day settlement short swing trade as the market has not had 3 down days in a row since the 666 low.
If April was a big triangle, then the next moves are upwards and onwards to 900 and above. Indeed the SPX was only 18 points shy of 900 and once 875 breaks up for good, whats to stop a run to 950-960 and the 200DMA? Someone said the 200DMA just keeps acting like a magnet on the markets. I agree, but even I expected a brief moment of pullback, sprinkled with a bit of doubt, of fear. Will it come? or will it only come after the 200DMA is hit?
Regardless I am 80% long. So I am profiting nicely and won't think of selling until the 200DMA on the SPX is hit. I have a couple of short term shorts but I'm thinking of bailing after doubling up today on QID. I bailed on FAZ at $9. Small profit but the market wasn't behaving correctly so I dumped the poison. QID is more tamer.
The short term waves are just nothing but higher highs even the damn triangle was a "running" type which means higher triangle waves to begin with.
Overall I'll wait til Monday to completely jump on the bull bandwagon. I want to see what a new month brings and if Friday will be bullish or bearish.
A break above today's high of 882 confirms EWI's count. A break below 845 confirms a bearish pullback. How deep and how far I don;t have a good read just yet. Just educated guesses.
Its a difficult count on the short term. But stepping back, I have no doubt this is a Primary wave 2 and the ultimate targets are much higher and that all the 200DMA's will be hit. The SPX 200DMA is residing around 969 at the moment. It is still dropping which means this is still a bear market.
I will however wait until May comes. No need to get long on the last day of the month.
Wednesday, April 29, 2009
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They are wrong! Down before up! Wait until next week to make a decision.
ReplyDeleteI am waiting until next late Monday/Tuesday to reevaluate everything
ReplyDeletehttps://www.technicalindicatorindex.com/newslet...
ReplyDeletescroll down to page 6, it shows a 2nd rising bearish wedge with the E wave being completed today, also in which completed the "B" of the ABC from the fall from last monday
Daneric if this is P2 then could the poster above be correct and we are headed for a C wave which will take us downwards significantly?
ReplyDeleteExactly what the big boyz want to hear. The last of the bears going over to the long side. They will pull the rug out soon. This is how bear market rallies end. When the news is all UP UP UP, and there are NO MORE BEARS remaining. Mission accomplished.
ReplyDeleteyes, yes, yes!! no more bears remaining. so many shorts have been covered with the stops placed on the technical levels that were overthrown today. there will be that correction to the down side (may not be large though). people are too bullish for the market to take off again, which it will in due time since this is showing w-x-y.
ReplyDelete"Regardless I am 80% long"
ReplyDeleteTypical, indexes up ~30% from their march lows,
with nay a pullback.
Then the bear throughout it all now states he is 80% long !?
To Dan From Max Cherry
ReplyDeleteThis is my view on the last several weeks if correct the "B" should be shallow followed by a rally towards 950
http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=1&dy=27&id=p51497950143&a=166391089&listNum=12
Anon, I can show you about 20 places where I have wrote about my 401K and having bought long mutual funds sub 700 and I will not sell until the 200DMA is hit.
ReplyDeleteI even said as much before the early March turn.
I do however have a separate trading account and other than the first rise to 775, I mostly have been playing short plays here and there. Most have not ended well but a few have been profitable. I have not played anything big except recently went I went big short prior to the 50 point drop from 875 to 826 because it was an ending diagonal.
I certainly have not been a bear thoughout this rally. However I have forecasted at least a 38% pullback to happen in April as has everyone else on the planet and it hasn't happened. But even thru any pullback, I will hold my 401k longs. I hedged them recently with a bit of SDS expecting a 38% pullback but it still it never came. The 200DMA on the SPX is the spot I will consider dumping some. Hope that clarifies my trading position.
clearly it would appear that Elliot Waves have no predictive capability ..........
ReplyDeletethe dialog that I have read here are a fine example of a largely academic discussion of past history. reminds me of the discussion of archaeology as the close study of very small walls
Anon, EW does have predictive capabilities. The 200DMA will be hit. That I can assure you and that is a result of EW principles.
ReplyDeleteI said as much when the market was 689.
When the market was chugging at 1100, we predicted 700 range. It happened. That was EWP.
Do not let the trees block the forest.
the only problem with those statements is that EW demonstrates that it has no real world time factor - to say that those examples demonstrate predictive capability misses the point since they are not connected to any specific point in time - in much the same way your posts here seem to also have had no connection to a point in time rather they amount to a general swirl of events which to my mind is a largely academic exercise - yes perhaps there will be a depression **SOMETIME** the rest is simply based not on ew but on other technicals
ReplyDeletemore to the point for ew to state the April was a correction is not predictive at the end of the month ...........
ReplyDeleteDaneric,
ReplyDeleteI agree that we are approaching a pivotal point, Mon/Tue. However, I will be focusing on both levels (such as 882+) *AND VOLUME*
Past few days were very low volume both up and down. You could interpret it as bears are scared and hiding, not willing to commit, while bulls are lacking much conviction. In fact a lot of these new high moves like today to 882 are spikey and very short on low volume. I hardly had any time to consider the move and they already pulled back.
I guess my point is that I *EXPECT* SPX to go higher, maybe even 890, make a run for 900, but on low volume. Big boys will manipulate indices to generate false signals like 900+ move. Only *IF* them 882+ move is done on a high volume I will accept it. Otherwise it is a fake.
Therefore, Thu/Fri SPX has to confirm 880+ move on high volume. Oherwise Mon we have stress test results that bears can use for a pullback and they should be bolder, commiting more. Also there is flu scare, etc.
BTW, don't worry about comments. You have been always consistent and I appriciate your thoughts. Readers just have to pay attention to what timeframes you are talking about. Clearly 401K is a long term timeframe.
Huh??? Dano, very confused. Just an hour ago you were saying we were headed to 800, maybe lower. Now you are in full bear mode. I am losing respect for you quickly. You play both sides so you can't be wrong???? Come on dude. pick a side and stop switching every hour.
ReplyDeleteIn fact, an hour ago you say sell in may and go away. Here you say, I am going totally bullish on Monday.
Be clear man. Stop screwing around with people. Seriously
The whole month of April was a correction? That is a bunch of crap. That is just a freaking excuse to explain why Elliott Wave Analysis isn't perfect and never will be. Yes it worked well from the October 2007 high to the 667 bottom but that doesn't mean the market is always going to work that way in the future. Go look at the Dow from 2000-2002 which wasn't a perfect 5 Wave down to the bottom in October of 2002.
ReplyDeleteU were talking about S&P will retrace to 750 since it was 800. Now it is at 875. We missed the boat.
ReplyDeleteDoubtful Anon,
ReplyDeleteElliot wave analysis explains so much but it is still a new theory and could of course be better, I think all of us want that. It represents the repetition of the form of price action and gets down to the core of markets, the thought patterns of people. It speaks to the beauty of the markets and society and tells us what actually drives the markets.
There are no other technical indicators that can do this, Elliott wave stands alone amongst all other technical indicators.
Timing is a very new study for the theory and is something that we all hope can be improved upon and learned. It's not all about retracements.
But this is all in many of the Elliott books that at least I find quite interesting and revealing. If you aren't amazed by the patterns that you see in the markets and inspired to learn more about the world around you then perhaps a deep study of this theory is not for you. But just understand that we all want answers too and we all get frustrated when we don't know where the market is going.
Dan - don't get discouraged by some of these posters. I've been reading your blog for a long time now and I never have relied solely upon your charts to make any investment decisions. I read your blog and others and come up with my own decisions. I have been posting on here for several weeks that market wants to move higher. I read your blog with an open mind, but make my own decisions in the end. Thanks for all the work you do!
ReplyDeleteThe Nasdaq hit its 200day average today, value line has as well. Value line is up 60% in less than two months. I have a hard time seeing the SPmaking it to its 200 average which is around 965 right now. I think today is the day the bears capitulated. I know that I was discouraged that the SP and Dow took out of the Feb highs but they did pullback below that key resistance. But many other indices have been lagging and the negative divergences and momentum continue. Martin Armstrong's turn date was April 19th and it has still held for the banking index and soon we will be leaving the favorable seasonal period for the stock market. The longest bear rally in 1929-1932 lasted two months so we have a couple weeks left for that analog but I wouldn't be surprised to see the market close down the next couple of days so we get a "spikey" formation on the monthly chart. The McClellan oscillator came very close to dropping below the 0line which was averted by today's rally. So many sell signal set-ups are close to being triggered. I am still looking for 50%bulls on the AAII poll; that would be the kiss of death. ---Mr. Panic of 1907
ReplyDeleteCheck out this link about banks' equity:
ReplyDeletehttp://pragcap.com/bank-equities-are-worthless