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Friday, October 29, 2010

Elliott Wave Update ~ 29 October [Update 7:50PM]

[Update 7:50PM: Pretty much sums up a lot of what I talk about:

I propose this basic truth of one of Nature' Laws:
When the time comes for a society's most acute need of a social safety net is exactly when it will fail in a most spectacular fashion. 

[Update 6PM: Oil is a bit of a tough read. But overall, I would say the chart might have an upward edge going forward.  But will that be good for stocks? Fundamentally, $85 oil is not good for the economy and gets Mom and Pop America in a stinky mood. I think this is generally reflected in stock prices somewhat.  So if oil does pass again upward over $85 certainly that is not great for the economy and may mark yet another peak in stock prices perhaps.] 
[Update 5:20PM: NDX is perhaps an ED in the making. Lots of upwardly biased overlapping zigzags. Combine this chart with the AAII http://3.bp.blogspot.com/_TwUS3GyHKsQ/TMoTHcuHHZI/AAAAAAAAH8Q/dmfY3GFJDZU/s1600/4+week.gif 4-week being the highest since 2005 and outside its BB, well ya gotta think the end is nigh and a price reversal won't pretty.]
[Update 5PM: NDX futures]
I think we'll have to continue going with the triangle setup as price action seems to warrant it. But the triangle is likely running out of room as the [E] wave itself may have morphed into its own triangle which can happen.

So the bias is still up for early next week and the "thrust" potential is still very much alive. GDP Friday turned out to be a real snoozer which was a bit surprising. But then again, the reported 2% gain in GDP is neither super bullish  (it will likely be revised down to 1.5% or lower in the future) nor super bearish for now.

If this breaks upward as per triangle come next week, pay special heed to my triangle timing apex line.  These can be very accurate predicting a turn.

E-minis [Update 3:35PM]

[Update 3:35: I thought the triangle reached the end but today turned out to be that perhaps the [E] has itself morphed into its own triangle which seems to happen a lot over the past 2 years]
Update on my AA chart I posted a week or so ago.
I like the Head and Shoulders setup here. Technically, the 4 hour MACD appears to be rolling over along with stochs

Thursday, October 28, 2010

Elliott Wave Update ~ 28 October

[Update 8:15PM: Again, interaction with the Supercycle line today.  Even if it manages a spurt above, I tend to think it will be short lived as it was in April.
And why? AAII is getting pretty gnarly bullish considering even Bill Gross alluded to the system being a big Ponzi. And you know what? No one disputes that. They may dispute his motives but no one argues against it being a Ponzi. Ponzi awareness is slowly going mainstream.

Courtesy  http://www.sentimentrader.com/  AAII Bull Ratio
4 week MA is now above the red line (kind of like its Bollinger Bands). Highest since 2005.
ORIGINAL POST
Gah another late night for me.

But looking at the tape, it appears the triangle count is intact.  A positive spin to GDP and a "thrust" up out of this triangle is a possibility and would fit within the pattern here.

A thrust down could also be accounted for see chart underneath this.
Poised for an opening thrust up or down. Futures should tell the story for the open I suppose....
We have obviously some big news events which should bring both volume and volatility.  Tomorrow is GDP report. Elections and FED next week.

There is still a very good chance the major indexes eventually crack new highs above April. We are obviously close Perhaps we get some non-confirmations where perhaps the SPX does not or something to that effect.

But what would the wave pattern  be?  We have three waves from July low but likely we would need a wave 4 and then wave 5 to new highs above April.

Here is a potential scenario wave count for new highs above April highs if tomorrow is a bit of a sell day.  Its just some things I'm kicking around in my brain.  If the market intends to make a new high, I feel I need to plot a plausible wave path. This is one such possibility depending on tomorrow.

This count might fulfill my NYAD count of needing a wave 4 down in NYAD and another NYAD wave up.

Anyways you get the idea.  The "key" is of course the August highs where I have "1" marked. This cannot be breached.
Of course, it could be the "top" is in already and the market is fixing to punish the majority to include bears who were bears but decided not to be just when it was ripe to be...

E-minis

Wednesday, October 27, 2010

Elliott Wave Update ~ 27 October [Update 7:45PM]

[Update 7:45PM: I generally like this count below.  Its not a picture perfect wave structure, but the market seems tiring so its to be expected.  But I am going with this for now. Not really changing a whole lot from what I have been showing, just tweaking as we go along. Thats what we are supposed to do.

Probably no one has this count as I have laid out and thats why I like it too. We'll see. It could fall apart tomorrow I would be just fine with that. But the waves don't yet suggest (5 wave impulse down) that is happening just yet.
I think a near-term count is starting to materialize. As I stated last night, the price action appears to be triangulating in an attempt to consolidate and make a stab at getting over resistance (1195, and the 1197-1202 SPX gap).

The banks have had to "stabilize" the past numerous sessions to allow the SPX to remain this elevated.

I use the Wilshire for form here.  The form looks pretty decent.
I'll have more later.

Love him or hate him, Bill Pimpco might just read my blog....http://www.marketwatch.com/story/qe2-a-ponzi-scheme-says-pimcos-gross-2010-10-27?dist=afterbell

E-minis

Some overnight action
And read the interesting Oct 25th entry http://www.consumerindexes.com/

The way they calculate, this consumer downturn is already much greater than the 2008 contraction.  Has the market felt any of this contraction? We'll find out on the 29th just how much pain the economy is in with the preliminary GDP report.

Most have been focusing on the election and the FED meeting next week, but there is a stealth "news" date coming this Friday...

Tuesday, October 26, 2010

Elliott Wave Update ~ 26 October [Update 8:33PM]

[Update 8:33PM: Again an interesting interaction with my blue Super-cycle upper channel line http://3.bp.blogspot.com/_TwUS3GyHKsQ/TMZGINSjohI/AAAAAAAAH64/Q0ANV126N4E/s1600/2010-10-25-PROPHET.png. Note that so far this year 2010 there have been thee separate average of 1000 point  or more DOW sell-offs that originated from this line including the May 6th Flash Crash.

I am convinced that market feels this line and I think I have it in the right spot. I haven't moved it since I laid it down at January high. ]
[Update 7:55PM: When AMZN (and other stocks in a parabolic rises - i.e.-NFLX) rolls over, maybe the market will.  But AMZN is probably tracing some of the clearest waves as of late so why not see where it leads?

Note That Minor 5 = 1 at $176.
The second chart shows that within Minor 5, its shaping up to be Minute [v] = [i] at about....$176 roughly if things pan out.

So that is some good Fib confluence and a nice target ($175). There is no reason to expect Minor 5 to extend as Minor 3 of Intermediate (5) extended a near perfect Fibonacci 1.58 (just shy of 1.61)

Sorry for the late post, didn't have time today to look at much. But one thing is apparent: the market has a destination in mind and seems determined to get there.

The squiggles are some of the ugliest I have tried to count lately which could be good for bears.  Beautiful impulsing is a sight to behold. A struggling market produces ugly....

Ugly waves also tend to find themselves within triangles too....

With the continuance of both zigzags up and down the last few days, I would have to say the market is dealing with serious resistance. Namely the April DOW highs and the 200 week SPX moving average at 1195.
http://www.marketwatch.com/story/powerful-uptrend-meets-major-resistance-2010-10-26

Rather than try to nail down a squiggle count, stepping back the market may be triangulating in order to consolidate up at high support so it can attempt a breakout of 1195 and the big SPX gap at 1197-1202.  This is where the resistance is.

However, if the market "stabs" upward again to a new high tomorrow, it could smack of an exhaustive ending diagonal wave move. So the jury is out.
So far the market is best counted as 3 big waves from the July lows. If we correct a bit deeper here (say perhaps to 1150 SPX) but maintain above the August highs of 1129 SPX, it could be a Minor wave 4 and then a Minor 5 will come and take out the April highs. That is the best "bigger picture" alternate I can come up with.

E-minis

Lower low overnight
Yen unable to hold newly-won breakout level.  The pattern could be terminal as we had the breakout from a triangle. Dollar 15 year low versus Yen
Australian dollar, 5 waves up and a required new high - check.
Palladium
Sugar. And this is but a one year look at things. Who can blame the CFTC for complaining about the HFT run amok? What producer can adequately plan ahead or hedge with a chart like this?  Answer: You cannot.

Monday, October 25, 2010

Elliott Wave Update ~ 25 October [Update 11:15PM]

[Update 11:15PM: Here is the Supercycle channel again, this time with my count I just whipped up showing the extended cycle wave V from the early 1980's to the 2000 high.  Basically I argue that everything above the Supecycle channel is a bubble market and an insane rise of asset mania.  Some other points I'd like to make in no particular order:

1. Notice how each subwave one advances prices above the previous highs. The first subwave one wishes to advance prices.
2. See how the primary (black) waves make sense on this chart?  When looking at the charts only since 2000 or so its hard to see what makes sense. But basically we propose that the market will do in reverse what it did from the 1980's onward once the credit system bubble we are in gains speed in collapsing.
3. Look at my blue box areas. Kind of neat and pretty much where you'd expect them to be (in wave threes of some degree)
4. The proposed cycle "b" wave at the 2007 peak is because cycle wave V had such strong residual undertones updraft that the forces to be pushed the corrective high above the orthodox 2000 top.  This is the result of a historic credit bubble (which is popping!). But being it was a b wave, it was built on false pretenses. Isn't that pretty much true?
5. Note for the same reasons we have such a robust Primary wave [2] of cycle wave "c". A flood of credit still exists.  Yet they always pop and deflate to beyond from where they started. And this bubble started under DOW 1000 
6. Note the long cycle wave IV offers strong support at DJIA 1000. This would be a normal retrace area for the bear market or, the previous subwave four. 
7. Note the proposed massive Head and Shoulders top forming in the market. 2000 (left)-2007(head)-2010?(right).

Finally, agree or disagree with my call for a big down market, but this is EW theory and I have presented the count for you to see.   After a wave V, an a-b-c correction to the price range of the previous subwave IV would be normal. And that price range is 1000 DJIA and under.

"Cannot happen!" I always hear.  hrmmm. Looks awful squishy below that neckline.

[Update 10:12PM: German DAX count.  Broke up out of the mess.  Triangle in there somewhere, probably two. Note the alts.]
Long term we notice it diverged at the 2007 world market tops.  So to see it diverge with other market tops here in 2010 makes perfect sense to me. Also note the inverted H&S target is now being properly dealt with.]
[Update 9PM: Again a new high on the NYAD chart today. I'm kind of kicking around 2 different EW counts for the NYAD.

One version is this. For this to be a good count, the "top" has to be put in like pronto or Blue 3 of (5) would become the shortest wave within (5) which is a no-no.  What I like about this count is the subwave ones [i] and 1 always try and lead higher relative to the next higher degree in price in each leg.
And the more conservative chart in which we are still looking for the top of blue 3 which should be imminent.
[Update 7:56PM: DJIA taking stabs above the Supercycle Channel line yet again. Breadth patterns looks like the market might want to rollover]
Playing around with studies.  Chande Momo Oscillator. The rally from the August low has been similar to the rally in March/April.  Lets see if it flashes the same way...
[Update 7:43PM: AA count.]
[Update 5:50PM: having fun with the BIDU count instead of a straight-up wave 4 triangle. Instead this chart shows wave 4 as a double three: Zigzag - zigzag - triangle. See this chart for a larger picture http://2.bp.blogspot.com/_TwUS3GyHKsQ/TMH1H4A9NEI/AAAAAAAAH44/7GZcTyCcuSM/s1600/bidu.png ]
And Goog popped higher out of the triangle I showed Friday http://3.bp.blogspot.com/_TwUS3GyHKsQ/TMHy02w_ICI/AAAAAAAAH4w/nfj_qy0AI6g/s1600/goog.png
ORIGINAL POST
The first minute of the day's opening saw a huge surge in up NYSE volume ratio.  The opening minute's tops were 24.6 up volume ratio and 7.72 advancing stocks to every one down.  Yet the end of the day finished at a paltry 1.81 up volume ratio and merely 1.5/1 advancing ratio.  That darn near constitutes a panic buying situation and near reversal.

The news was great as the 10AM news saw the reported Sep home sales jumped 10% and all indexes did an intra-day gap up including the DJIA which is rare on its tape. And shortly after that, the tape reversed down after finding an early peak.

And so the day ended green with a battle.  But one has to wonder, just how much gas is left in the bull tank after an open like that?  Sentiment is getting stretched by certain measures to beyond the April extremes.

VIX was well green today despite the green market.

Potential Wilshire count. (c) = .618 x (a) at 12642.
Another gap up tomorrow to take a stab at challenging the SPX 1197.5-1202.26 gap? Is it a squiggle too far for now? As long as (1) of [C] of v remains intact, we must consider it.
Interesting Fib relationships on the DJIA particularly v = .615 times iii.
Candle is a potential topper. There are now some decent negative divergences on the daily.

E-minis [Update 2:30PM]

[Update 2:30PM: Sticking with the expanding triangle count for the Wilshire and SPX, we may be missing a subwave with a target of 1200.89.  There of course exists a open SPX gap from Spring 2010 from 1197.5-1202.26.  1183.93 is the "control" for this count, blue (1) of [C] as it cannot be breached.]
[Update 11:12AM: Thats a pretty nice 5 waves down.]

Friday, October 22, 2010

Elliott Wave Update ~ 22 October [Update 7:26PM]

[Update 7:26PM: Ho Hum, just another Bank Failure Friday. http://www.fdic.gov/bank/individual/failed/banklist.html 6 banks. Over $2B. Just another drop in the bucket considering the magic black hole spits out hundreds of billions.

Big one is http://www.fdic.gov/news/news/press/2010/pr10236.html with 1.65B in "assets". Thats a pretty big failure.

At what point do the bank failures add up to a panic point? 138 so far this year. Recovery my ass.  The complacency of it all is just mind-boggling. The Ponzi remains intact.

[Update 6:50PM: CMG: last stage of a parabolic rise? I mean sheesh it finished $12 above its upper BB!]
[Update 6:09PM: Did we just see a mini flash crash on the dollar?  It would fit well as a final "thrust" move out of an expanding triangle.]
Volume bars look real enough.  Will a true dollar panic be "good" for stocks? I doubt it.

[Update 5:20PM: Steve Jobs meets Obama in the White House.
http://voices.washingtonpost.com/posttech/2010/10/steve_jobs_meets_with_pres_oba.html

Some people would suggest that Obama is now the "kiss of death".  He happens to have been President in the biggest downswing of social mood in generations so I say he is snake-bitten in that regard.

His Administration seems to be one step behind in social mood - lurching toward more and more government control when America is repulsing at the thought of cradle-to-grave bureaucratic control of their lives.  America was founded on the idea of liberty that has been passed down from generation to generation.

I don't want to start a political spat...

...all I am saying is that events like these are, perhaps like a prominent magazine cover, a potential contrarian indicator. And in this case its Apple and its hefty Market Cap topping Exxon - its surely King of the World. And now meeting the President at the White House to consult on "jobs and competitiveness".  Is this just a shakedown because Apple is sitting on some $50B?

Are we near an Apple top?
Uptrend intact. NDX sports perhaps an ascending triangle of decent size.
Wilshire count supports a spurt higher. (Or a small up-down-then up holding high support - could be a three in a complex pattern)
Update on my overall AMZN count since it seems to trace a nice 5 waves up as of late.
A closer look at the most recent Minor 5 wave 
Even Google sports another neat triangle
BIDU busted up from a near perfectly formed triangle. Had a hiccup now in a wave [iii] perhaps. Prettty much matches AMZN's pattern
So all in all we have a triangle in the NDX, goog is forming a small triangle, AMZN broke up in its wave 5, BIDU busted up in a wave 5 out of a triangle...With all the triangle moves, (and APPLE may be in a wave [iv], it seems we are getting close but maybe not quite there yet.