Custom Search

Wednesday, February 8, 2012

Elliott Wave Update ~ 8 February 2012 [Update 9PM]

Update 9PM: A few more charts:
TLT. Bonds have been holding price while sentiment has corrected. This is consistent with the idea TLT will break higher in a wave 5.
Dollar chart. A series of one's and two's up.  Dollar sentiment has corrected severely last few weeks (current reading of 38% sentiment according to Sentiment Trader tonight down from a very recent high). The shallow price pullback versus big sentiment pullback is a perfect setup for a "third of a third" higher.

Inverted H&S pattern. Solid support above 78.
Apple for good measure.  The coming backlash against Apple will surprise many.  Steve Jobs is not around to steer Apple and corporations have a way of mucking things up when they are on top.  Its called greed, complacency, etc.
GDOW diverging badly with the Industrials is CAC, FTSE, Nikkei, etc, etc.  
Speaking of the Nikkei. You don't here much from Japan lately. Finishing up wave E.
A non-conformation scenario under DOW THEORY is better than I could have hoped for as I didn't think it would happen like this. But it did and its bearish unless the Transports can "giddy-up" and go.
I certainly believe there is a spike in social mood sentiment that is consistent to where the stock market is currently. There are a few charts that seem to confirm this anecdotally.

The first chart is my self-made Gallup approval chart for Presidential tracking. I was playing around with Excel and came up with this using Gallup's downloadable data set.  The trend has been clearly down channeling for Obama since literally day 1.

Yet there is divergence currently. Note that his "high" (minus the beginning of his presidency) came just after the stock market peak(s) of 2011. His low came during the Wall Street Occupation days of late summer/early fall 2011 - also coinciding with a market low.

Clearly he has rebounded but there is negative divergence (as compared with the DJIA anyway) and the upper channel line is coming up fast (blue arrow)

[RIGHT-CLICK on chart and choose "Open link in new tab" for best viewing results]
Here is the data set showing the down-channel more clearly:

The next chart I found via Zero Hedge It shows Consumer Credit has rebounded (rate of change).  This could be good and bad (actually all bad really). But it shows sentiment has rebounded to where Consumers are now again "comfortable" in taking on credit again.

Well it may indeed be bad - they may be taking on credit because they need to maintain a standard of living that is eroding away. But certainly not all, some just needed new cars like I did (mine had broken for good). In any case, it shows that sentiment is reaching perhaps its highest peaks since the 2009 low. And that is consistent with a high stock market.
The third chart is University of Michigan Consumer Confidence via Sentiment Trader. This chart also shows a big drop last year and then a very sharp rebound higher. Clearly mood has swung from one extreme low to a near recovery high very fast.  Schizophrenic populace.
Clearly there was a major peak in social mood last Spring/early summer 2011. This was followed by a sharp downturn that resulted in "Occupy" movement.  There has then been a sharp rebound that has resulted in a stock market that is challenging the 2011 highs.

But is this a last gasp for a sentiment rebound? Sentiment may hit "resistance" and do a double-top. What will be interesting for me is if Obama's approval breaks above the upper channel line or not. If it cannot, it may plunge to the lower line where his approval will be where Bush's was in the low 30's.

So indeed the market rebound is real. Social mood has rebounded sharply. But again, the underlying market seems like it could implode at any time. Thus my prediction is that social mood is on shaky ground also.

With one more higher high above 1351 SPX, there will be at least 9 waves up which constitutes an impulse.
 Or it could be wedging. If its a wedge, a price collapse will ensue once wave v has peaked.
SPX 30 minute:  Market losing power again.
Continuation-type inverted H&S pattern target nearly reached on the Wilshire5000:
The Wilshire shows where I think the real "virgin space" - i.e."third of a third" occurred. If I am correct, then this 5 wave move from the (b) is nearly over.
NASDAQ100 seems to be definitely a thrust out of a long-winded triangle.  Z-method targeting may have been reached today.
It may be easier to see that the apex point is reached today or tomorrow using the futures. These apex points, when valid, can be unusually accurate in finding the endpoint.

blog comments powered by Disqus