Custom Search

Thursday, January 31, 2013

Elliott Wave Update ~ 31 January 2013

Short term count:
An example of the extreme sentiment. Here is tonight's NAAIM survey via Sentiment Trader:

They had this to say about the chart:


"NAAIM polls a sample of investment managers and asks them how they're positioned in stocks - from 200% net short to 200% net long.  By being more than 100% invested either way, it means that the managers are leveraged.

That had never happened...until now."

Additionally, EWI reported 91% Daily Sentiment reading for the Euro. Things are ripe for a historic collapse which is what the ending diagonal count calls for.

E-minis


Wednesday, January 30, 2013

Elliott Wave Update ~ 30 January 2013

Our short term squiggle count is starting to mature and take shape.
The wedge is also very mature. If we get a major overthrow spike, its coming real soon.

E-minis


Tuesday, January 29, 2013

Elliott Wave Update ~ 29 January

Sentiment remains exuberant.  Yet the wedge count is still intact which suggest a rapid and violent reversal to the downside.
Basically with the wedge count shown above, we are looking for the completion of the final 5 waves up. Its taking shape and its very stretched.

E-minis


Monday, January 28, 2013

Elliott Wave Update ~ 28 January 2013

Nothing has changed in the outlook. Sentiment is extreme. The huge wedge is minimally completed.  We await.
Next week will reach the time ratio between [W] and [Y].

E-minis


Friday, January 25, 2013

Elliott Wave Update ~ 25 January 2013

An example of the extreme sentiment that is occurring.  This is Hulbert Nasdaq sentiment reading of 24 January via Sentiment Trader.   This extreme is occurring despite the massive Apple drop and despite the fact the NASDAQ 100 is still under its 2012 highs.

You would think the opposite should be occurring in that sentiment would be more subdued since NDX prices have not responded as well as most every other index.
Nasdaq Composite monthly. Long waning RSI divergence.

E-minis


Thursday, January 24, 2013

Elliott Wave Update ~ 24 January 2013

Today there was some overthrow of the upper wedgeline on elevated optimism. The AAII survey has reached extremes as via Sentiment Trader:
The wedge in the Wilshire as it stands:
CSFB Fear Barometer again via Sentiment Trader. Ripe for a price pullback.

E-minis


Wednesday, January 23, 2013

Elliott Wave Update ~ 23 January 2013

Sentiment is extremely elevated. It could result however in an overthrow of the upper wedgeline.
GDOW:
I guess the long term NYAD count shouldn't have surprised me. I always have proposed that within the cycle wave V that primary [1] was extended. Under that guideline, waves [3] and [5] should be about equal (and of course wave [3] should no the shortest).   Its about there. And the waning RSI still looks ripe for major reversal.
Closer count reveals may be due for a pullback in breadth for 4 of (5) of [5].
And yet another count showing that waves [3] and [5] are more or less .618 the length of wave [1] as it would be expected if wave [1] is the extended wave in the impulse sequence.

Its suggests that a great breadth reversal is near at hand. Yes I guess that seems a ridiculous notion at this time but that's what the chart suggests. The wave count is quite mature.

E-minis


Tuesday, January 22, 2013

Elliott Wave Update ~ 22 January 2013

Some perspective on things.

Two years ago in the first half of 2011, the DJIA was trading roughly 1000 points below where its stands today. Yes the DJIA has gained around 1000 points in 2 years.  to be more specific, the Dow Jones Industrials peaked at 12,876 on the week of 2 May 2011.  Today's close is 836 points above that price.

So in 20 months the DJIA has gained 836 points peak-to-peak.

The Nasdaq Composite is a mere 256 points higher in that same 20 months.

To be sure its a "win" for market bulls.  But the cost of that maintained elevated market has taken its toll on the Fed's balance sheet and the balance sheet of the US treasury.  

But as I have always said, the markets are never wrong. Its meant to be. But what are the waves telling us?

Wave Structure the last 20 months.
Simply put, the primary call here is that the market is in a huge ending diagonal triangle bigger than anything the market has ever seen. And that means when its finally over, prices will collapse as a result.  The "pushing" and prodding of prices has resulted in an overlapping rising wedge shape.

Primary Counts:
The wedge can be counted probably 2 ways as it stands. I prefer the first count as its the true ending diagonal wedge count versus the second.
Conclusion
Yay, congrats for social mood hanging in there and managing to keep things "chipper" in  the face of an ever growing disconnect from Nature's Laws.  Japan just now introduced their version of  "QE Forever" today (as if they already hadn't) thereby joining the ECB and FED in "unlimited" support. Yet now that most central banks are officially declared "all in" and not getting much juice out of the market anymore (as looking over the last 20 months), one wonders.

Ending diagonals can end on an orgy of a price spike over the upper wedgeline.  At this point there will be no bears anywhere willing to short anything. Thats probably when the bottom drops out of course.

E-minis


Monday, January 21, 2013

Friday, January 18, 2013

Elliott Wave Update ~ 18 January 2013

Our primary count is that the US markets are in a cycle wave peaking process. This cycle wave b or x is the middle cycle wave of a 3 wave supercycle-sized wave (a) of Grand supercycle-sized wave [IV].

The INDU count below represents it best:

The NY Composite (as does the Global Dow) probably best represents that the World composite social mood peak  may have been in 2007.  And it is still well off its 2007 highs. Wedging with overthrow?
One thing is clear on all the charts: its a mighty big bearish rising wedge.

E-minis


Thursday, January 17, 2013

Elliott Wave Update ~ 17 January 2013

Top 2 counts. Both imply a cycle wave peak is near in a wedge pattern which is ultimately deadly bearish.

E-minis


Wednesday, January 16, 2013

Elliott Wave Update ~ 16 January 2013

Negative breadth on higher prices is ever more glaring. Today again more down issues (55%) vs up on the NYSE. And the NASDAQ, despite ending positive on the day, had only 40% up issues and merely 50% up volume ratio. So things are on short term shaky ground at least.

And like the always excellent Hochberg of Elliott Wave International stated tonight, its astonishing that prices have maintained such an elevated state despite the seemingly deteriorating market internals on ever rising extreme optimism.  The SPX, DJIA, and NASDAQ composite has still yet to make a new recovery high.

Yeah that big e-mini overnight gap up from the New Year is still a glaring open gaping hole. We all see it and wonder.
DJIA
As far as the extreme optimism? Well Investor's Intelligence survey is out (via Sentiment Trader) and again a move toward more bullishness. So risk of decline is higher than not.
Despite the evidence that markets should decline soon, this weekly chart suggests that things might chug slowly higher to even more bullsish extremes (with marginal price advance) to meet both the upper trend line and time interval ratios.  Either way, this is a chart of the biggest bearish wedge ever known in the markets. I still stick to that synopsis. And the end result will be the biggest ever price collapse.

Yes it is taking forever, but I think it shan't disappoint in the end. And few will make money from a rapid decline as usual.

E-minis


Tuesday, January 15, 2013

Elliot Wave Update ~ 15 January 2013

Not much to add today. Bullish extremes got more extreme which is ultimately bearish.


And the channel was a perfect bounce spot:
If 6 month rates go to even 1%, its probably "game over" for the Fedm banks and the US economy. My point being once rates are on the march higher, huge defaults cannot be far behind.   I am not even considering the massive interest rate derivative market and the effects it will have on that and those that play that game of which the Fed is the biggest player - hence will likely be the biggest loser if things go against them.

 


E-minis



Monday, January 14, 2013

Elliott Wave Update ~ 14 January 2013

Its amazing that the SPX, NASDAQ Composite, and DJIA has not yet broken its previous recovery high above 1474. It "feels" like it did (the Wilshire5000 did) but alas it technically has not. 

CPCE