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Monday, August 19, 2013

Elliott Wave Update ~ 19 August 2013

Pressure was building all day underneath via market internals. For instance, when the S&P 500 bounced green early this morning, the highest the NYSE advance/decline ratio got was .69:1. That is horrible when one considers that if the market is "neutral" in price an advance/decline ratio of 1:1 would be more "normal". This kind of internal selling pressure is more indicative of a bear market. It is perhaps more evidence that the market has shifted into a bearish mode. The  bull market since 2009 usually did not have things like this happen. Instead typically on mild down days (S&P down .59%) such as today, internal pressure was, well usually mild. Not today anyway.

Perhaps a "temp" bottoming panic is building up.  We'll see tomorrow. The day ended on the worst internals pretty much as you can see below.
Wilshire for form. Best count has us looking for the bottom of wave (iii) of [i].
How about them yields? I have always predicted that bonds and stocks would sell in "P3" wave down. Of course we do not have a Primary 3 (just yet) down but instead perhaps a higher cycle degree.  And already stocks and bonds are selling together and we are barely 60 cash S&P points from the all-time high.  Higher yields are not "bullish" for the economy, not this time. Higher yields will only accelerate bankruptcies which is deflationary.

10 year yield may need another down/up to finish 5 of (3). I could be too optimistic however.  Since this is labeled an aggressive wave (3) up, we must allow things to run its course
MUB looks like it may be heading for a new low.
NYAD cumulative is collapsing.

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