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Monday, June 8, 2009

P2 Target - 999 SPX

EDIT: Took out the preachy part heh. The market always humbles. That I have learned the hard way many times.

Not meant to be hyperbole (maybe a little), but its my actual target via what the short term and long term waves are tracing out. If this is a B wave Minor triangle as I proposed in tonight's update, and if C = A, then another 5 wave move will take it to the cusp of 1000. So yes, 999 is my new upper target based on C = A of the final ABC zig zag.

P1 ended at 666, why not 999 for a top with that elusive 1000 never reached....keepin everyone lurching in the wrong direction for quite some time when we head down. That would be a 50% rally. And NASDAQ would be close to an actual 50% Fibonnaci retrace if it hit above 2000.

Do you suppose it has to run higher than 999? I don't. All my fanciful guesses at how P2 might trace out via a 6 or even 10 month rally, doesn't seem to be panning out. We never got much of a pullback. Just the bullhorns thru and thru. P2 has a sense of urgency about it. Maybe it only has a small window of opportunity.
The (X) wave triangle and then another ABC zig zag means a double zig zag which means P2 is over. That's straight out of the book, not something I am guessing at. There won't be no fancy flat nor some 50% retrace and then another bull run.

Fear has been correcting for almost 8 months. Soon it will be unable to correct downward anymore. The falling wedge in the VIX will result in a move HIGHER than where the falling wedge started. That's the deal.

P2 is over near mid to end of June.

Maybe they take P3 down to 333....


  1. nice work, dan. do you have super cycle count for BKX. I know they are in a different count. I can see extrapolating 999 to whatever bkx ends up with, but I am more interested in the count at the top.
    if spx =P2, what does BKX equals
    thank you for all that you do.

  2. BKX may or may not squeak out a new high.

  3. exactly my thoughts. I think the high it made few days maybe it.
    spx does not influence it in a major way. as you can see it did not move down this am with spx and it did not move up in the pm either.
    bkx is looking at spx but not able to decide. if you look at the top banks, they are at major highs and pe 's of 30s and 40s. i think that is why. imho, bkx may have down as path of least resistance.

  4. Beautiful chart. I've moved all the IRA out of stocks and don't have access to shorts via that account. Let's hope bonds and money markets can pick up some 3-5% over the next couple years

  5. Nice Chart Dan.
    Do you have a EW count for Shanghai or Hang Seng?

  6. Love your chart because I do agree that bull actually ended more or less with millenium allready. Everything since is just corrective by nature. I know tons of stocks never reached anything even close high with next 7 years not to mention how many disappears forever with that dotcom & tech burst.

    I have to confess that is not very beautifull chart for long way to come (years) for bullside, but it seems it does not make that more easy for bears either. It´s the open issue where that next impulse opens and that W2 zigzags ends, it could appear as double or triple zigzag for instance.

    You see, it´s not necessary we end this W2 in here, first at all it can surprize all and go higher and all this would be like playing with fire to hold it. On the other hand, that W2 could come extreme complex in here meaning we don´t go anywhere in the large perspective for years to come instead zigzag this W2 as 0-78,6% road for many years to come before next "tsunami" waves opens down. This would put as for yearly "flat" charts like tennis ball, you hit it and it goes from one wall to another - but at the end of day nowhere.

    I suppose market tends to rest most of the time with these zigzag´s while impulse waves of cource and certainly are quick and furious like autumn 2008 & year 2008 (and 1998-2001).

    This seems to be issue also in FX side, everything there in montly and weekly chart are more or less just corrective phases.

    I am afraid Prechter will be right one day. We really end that Dow to 400 or perhaps there´s even one zero less after the first 2 numbers and when that happens, world will be very different.

    The most interesting sector I believe in the decade to come are agri´s now.

  7. The Agri's is due for a big correction...

  8. Interesting! Wed. is going to be a big down day...

  9. Tomorrow is going to be a big test for the Bull

  10. I agree with Dan. As every analist is calling for 950-60 to be the IT Top, it wouldn't surprise me they force a short squezze to the 1K barrier. At that time, there won't be almost any Bear left out there. So we tank hard. We need max pain to Bears before any sizeable drop. 950 resistance brakout will do the trick.

    But, I can't imagine SPX trading 333. I think labeling this as a 2 is quite premature.

    1025 is 38.2% retracement.

  11. S&P 333 should be achieve when Oil, USD both topped out. No more value investing in U.S equities. Everyone sell hard.

  12. dan, i can take the jabs, though here's why i can't concede p2 any time soon

    1) 3 or 3.5 month p2 vs 18 month p1. come on man. how about at least 30% the amount of time at 6 months. i think 7 is better. also have you done a cycle count lately with macd waves? i can see a case for 13 though 21 sounds better

    2) i told you about the zweig. now check out the hidenberg omen. this is mchugh's baby. another one in my bag. it has not gone off yet. i have more. they aren't there yet

    usualy disclaimer as you are the man, but i need to see to believe

  13. ihave wave 3 ending Tuesday around 957, wave 4 920 we should finish wave 5 by end of month, I have around 988, but that's close enough to 999

  14. JohnnyBlue, fear has been subsiding (correcting) for nearly 8 months from an October peak.

    So in that sense, it has not been only 3 months.

    There are no hard rules for time in EW theory.

    Prechter figured the last wave V in the Cycle would top out at around 1987. Then he swithced to 1990. And of course it ran until 2000. Then he didn't see the 4 year cycle b wave coming.

    However, the reverse may be accelerating to the downside. Social mood is paying back all that it borrowed with interest.

    And social mood has indeed been on borrowed time!

    So it may be paying that back with interest too!

    You may be too complacent. For us that are smart enough to know whats going on, thats about the best P2 can expect to accomplish.

    You don't doubt your bearish tendencies, yet you do (time) so in a way P2 has gotten you.

  15. Don't ever fall in love with P2. Otherwise its easy to get hurt by unexpected P3

  16. "The Agri's is due for a big correction..."

    Propably, if oil is also. But I meant a bit bigger perspective in here. Did you know that chinese government is buying pure agricultular land from africa allready to feed own population.

  17. Well after all,

    It starts to seem and sounds for me that caldaro made it correctly in large spectrum. Meaning, you can be even bullish with flat market. Sounds for me if SPX ew theorist draws allready 999 number, that´s not really far away from that 1050 either which I suppose is cycle top call for w2.

    One shiny 5% error wont make much difference with this big waves.

    If dan is right, this might also mean explosive upside triple zigzag for eurodollar meaning actual hit for that 1,4500 or even 1,4700. Same story with oil.

    Sounds similiar with 2003. Many waited and waited after big bear plunges, but lazy and slow uproll just kept going and leading higher month after month ;).

    960 might come a bit exiciting place.

  18. JohnnyBlue made me (forgive me Dan, this was enlightening so thought worth sharing)

    from Wikipedia:

    Hindenburg Omen - a technical analysis that attempts to predict a forthcoming stock market crash.

    "Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days. The probability of a panic sellout was 41% and the probability of a major stock market crash was 24%. However, the occurrence of a confirmed Hindenburg Omen does not necessarily mean that the stock market will go down, although every NYSE crash since 1985 has been preceded by a Hindenburg Omen."


    1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

    2. That the smaller of these numbers is greater than 75. (this is not a rule but a function of the 2.2% of the total issues)

    3. That the NYSE 10 Week moving average is rising.

    4. That the McClellan Oscillator is negative on that same day.

    5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

  19. But the criteria for the Hindenburg has not been met has it?