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Friday, July 17, 2009

Come Back Kenny (Updated)

P1 is probably the most perfect 5 wave Elliott structure of Intermediate size you'll ever see. It fits the theory completely not just in chart patterns but subwave internal technicals like breadth, volume, fear, divergence between (3) and (5)... etc.). To call this anything else than what it is beyond fathom to me.

Elliott waves always produces connecting patterns that fool the novice (and K is no novice). An Intermediate wave (4) flat? (EDIT: to be clear - Kenny doesn't see the (4) of P1 expanded flat but the possibility of a Primary [B] wave expanded flat - yet this post is also for all those who insist its (4) of P1. The main point of the chart is to show the P1 channel lines and in particular, the (4) triangle. So that still argues against the P[B] flat.)

Lets put it this way: No matter what happens from here, I would never call it a wave (4) of P1 flat. Highly unlikely. Nor a [B] wave flat for the same reasons. Backup count to the backup count? Maybe. But never the primary.

If your a member of EWI, you know what I am talking about and all the internal subwave technicals that were provided and sentiment charts, etc fit the theory perfectly.

EW theory is more than just imaginative chart patterns. That's where the novices go awry. They see ABC but don't pay attention to the nuts and bolts of true EW theory which is the heart of the matter.

P2 affected my brain in April when I insisted the market would get its 38% correction.

I of course had some SDS shoved up my ass. I made peace with p2 shortly after. Mostly I have tried to stay in tune (besides the early call for high 900's - but hey, I think I may get my target)and stay nimble an stay focused on the theory and not what I want it to happen.

Kenny come back to the dark side of tracking nasty Primary waves down. The BIG one is coming The expanded flat looks nice on a chart maybe, but lift up its skirt and you see it ain't all that. The internals don't match and I think you know it deep down maybe you forgot all the cool internal data EWI provides. Kenny, your certainly no novice. I have learned most of my T/A from you.

We can keep it as a backup count. That'll work for me. Just say that P2 has affected your thinking. It did mine. It affects all. That is the power of P2. I made peace with it.


  1. If I understood the EWI's short term report of today, the expectation is for a retracement towards low 900s for next week.

  2. All indicators shows a pullback on Monday

  3. LMAO. Like a couple of wrestlers or politicans slugging it out back and forth all the while going for beers later :)

    I think its great to have 2 counts if both are legitimate, just in case the carpet does get pulled sooner than the EWI count, at least then we'd know why and probably recover sooner.

    Great work guys

  4. Dan:

    This is meant as a compliment. I like your insights as much as Kenny's. My intuition tells me to be with Kenny for this latest debate. I wish that both of you can merge into a new blog (let's call it KenDanyEric blog for now) and issue a unified analysis ( kind-o-like the "Unified Theory of Everything in Technical Analysis").

  5. For dan's scenario to play out I would think we need a good sized pullback over a few days perhaps down to the neckline to fake out the h&s players. 1000 is not far to go in 5-6 weeks.

  6. That was a funny read. And Kenny's comment yesterday about EWI's count had me rolling. I myself am completely frustrated with EWI and Hochberg especially. If I was Prechter I would've given him the Vader grip long ago..."You have failed me for the last time..."

  7. dano.....i will stick with my GS crystal ball and peak at your charts right before my daily prediction.....u da man

  8. Geez Dan, since my switch my first choice of what the "Flat" is is as a B wave in a Huge Zigzag. Not wave (4). I think I have made this clearer than just about anything else. Wave (4) is an Alt: count just in case.

    And in this context of this argument just what in the hell does the big decline being a clear 5 wave Impulse have to do with anything. 5 3 5 or 5 3 5 X 5 3 5.

    I find your comments about having big breadth days as support against a C wave in a Flat, well, pretty funny. The C wave in a Flat is a 5 wave Impulse, and they can be fierce as all hell.

  9. Especially the C wave of an Expanded Flat.

  10. Inflation next year will put a wrankle on the counts imho. As the new world currency comes online and we lose the dollar and crude/commodity connection, all bets are off.

  11. Just read a new book on crude (among other topics)...Jeff Rubin's 'Why Your World Is About to Get a Whole Lot Smaller'. Pretty convincing argument that this recession was not a sub-prime/credit bubble in isolation, but the 2003 major run-up in crude that put manufacturing and transportation at a breaking point for the producer / consumer relationship.

    My point? Our little run up to 70 crude is getting painful again. And with everyone's call for 1050+ on the do you think crude will pay to play? Based on algorithms, percentages and some stupid lines ( close to 90...that's going to be pretty painful at the pump. Gas greater than $3+ a gallon = P3 indeed.

  12. Kenny, yeah I realize that you see the [B] wave expanded flat primary. This post is also for all the Intermediate (4) people. Sorry. I should have made that clearer.

    But I think my larger point on the channel lines still holds true. 1-3-5 touch. 2-4 touch. They are parallel.

    The (4) of [1] triangle rules out the expanded flat. The (A) wave of your expanded flat was a particularly a very complex wave which smacks of a C wave inside the triangle.

    The NASDAQ traced a near perfect trinagle. The DOW? Not so well, but still it behanved like triangle waves.

    During the triangle the mood swung back and forth - from fear to hope in days and hours. just like a triangle of that size was supposed to do. Then the thrust out left no doubt we were headed down in a thrust move.

  13. That count is not right. Please label the correction minors between (3) and (4)? I've never seen that type of wave structure. And that is because it doen't exist. Keep trying though.

  14. Plato said, "That was a funny read. And Kenny's comment yesterday about EWI's count had me rolling. I myself am completely frustrated with EWI and Hochberg especially. If I was Prechter I would've given him the Vader grip long ago..."You have failed me for the last time..."

    I agree with you Plato. What is EWI doing?

  15. Sure feels like P3 is creeping up on us. P2 is driven by sentiment right? And just when everyone thinks the worst is behind us...the recession is over...the bear market is history, then boom. Look what we've seen over the past week:

    * WSJ runs a feature piece this weekend about Ben's moves during the great "Panic of 2008". It reads like a piece of history. Ah, reflecting back on those dark days now that the clouds have parted and the sun is beaming. How close we came to the brink...bravo Ben.

    * Meredith Whitney, the long-time bear on banks, now -- for the first time I can recall -- puts a buy recommendation on. Granted, it was just one "bank" -- Goldman Sachs -- but it marks a turning point for the one who "got it right". The worst is past us...

    * Noriel Roubini, another long-time bear -- Dr. Doom -- says the recession is ending. While CNBC twists his words around and he still claims growth will remain anemic, another turning point is marked. The worst may be past us....

    Sentiment is turning. The last of the great bears are folding. I think P3 is closer than we think...

  16. Mortie just published thoughts about next week. As you know, he applies EWs to his forecasts.

  17. I don't claim to be an expert on EWT I'm most likely closer to novice but even the experts can and are wrong. Pretcher had 87' as the super cycle top he misread an "a" wave for the beginnings of a crash to Dow 200 good call in the short term but way off long term. I happen to disagree with your and Kenny's count not were we are now but how we got here I disagree the W3 low I believe it's 941 on 11/21/08 this is my count, please feel free to set this novice right.$SPX&p=D&st=2007-09-01&en=2010-01-01&id=p09076041453&a=173238739&listNum=12

  18. How about a squiggle chart on Friday's action?

  19. re: crude

    Prechter had some interesting comments on crude in the latest version of the EWT. He thinks it's going down to $10/barrell in the future. Presumably due to a collapse in manufacturing and altnerative energy (he thinks nuclear).

  20. Lol, Prechter needs to read Simmons, Rubins, Kunstler, Campbell, Deffeyes to name just a scratch on the surface. You can really chart crude and price predict. Did he call the 147 to 30's too? Nuclear is 5-15 years away in the planning stages. 20-30 years away from active new plants in the US. Coal, oil and natty gas will be used to the last drop. Crude is the black swan.