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Friday, August 30, 2013

Elliott Wave Update ~ 30 August 2013

Volume should start to come back on Tuesday.

Possible counts:
NYAD shows some short term positive divergence. We'll see what that brings next week.

E-minis


Thursday, August 29, 2013

Wednesday, August 28, 2013

Elliott Wave Update ~ 28 August 2013

One potent bearish setup exists at this moment. A possible formation of a "base" channel and a steep, narrow "acceleration" channel has already formed.  The purpose of the base channel is to establish a new trend change.

The purpose of the "acceleration channel" is to smash through the base channel and get prices to accelerate, and in this case, the acceleration would be to the extreme downside.

I have shown these setups before. And as before, these setups either "pan out" or they are false setups and do not. Such is the simplicity of EW counting logic. So it will be interesting to see prices tomorrow.

Today's weak rally alleviated intraday oversold indicators such as TRIN readings. After closing over 2 yesterday in an oversold condition, today's TRIN closed below 1 (.97).
Another count I am looking at is an expanded wave [ii] flat count for Minute [ii]. This would require a lower low to complete wave (b) of [ii]. Then a very sharp rally in 5 waves possibly to the open gap area at 1685. Another variation on this is that today's price low was (b) and tomorrow we'll continue to the upside in fulfilling wave (c) of [ii].
Once again the CPCE closed quite low despite prices behaving poorly over the past many weeks. Very complacent and no sign of panic.  This chart alone wants me to stay extremely bearish.

Also EWI reported Trade-Futures Daily Sentiment Index on Gold and Silver was 87% and 92% respectively. That is again quickly one-sided.

So we have a sharp rebound in Gold/Silver, complacency in the put/call ratio. Both could support more heavy stock market selling if gold and silver happen to take another momentous dump.
Last night I showed the main longer term channel setups. Prices have not quite touched the first major (green) channel (Intermediate).  One potential is that if prices smash through the base channel shown in the Wilshire 5000 chart above, then prices will also be "smashing through" this Intermediate sized channel at about the same time. That might cause the SPX to run down to the next higher degree channel which is significantly lower at around 1530ish.

So you see, channels and stuff can matter. The super bearish "setup" is there. Now we await. If the GREEN channel holds, then it too is a logical bounce point.

E-minis


Tuesday, August 27, 2013

Elliott Wave Update ~ 27 August 2013

Still more variables for our short term count.  The entire move from the top looks good as one big 5 wave move lower which implies a wave [ii] bounce is coming. Problem is, we just had a bounce of some significance.
However, here is the Wilshire5000; the recent bounce was nearly 50% total of the entire decline. That puts it decently into a wave [ii] territory.  If we have marked the top of Minute [ii], then look out below as things could get really ugly and we have already started wave [iii] down.
Tonight's CPCE reading again does not smack of any panic occurring at all!  So overall, this chart supports yet more selling before a temp "bottom" is reached.
 
There are 3 major channel trend lines to watch.  A break of each would indicate a trend change at the degree of the channel.

From small degree to large we have:

1.) Intermediate wave (C) of Primary [Y] channel. (Green channel)
2.) Primary zigzag wave [Y] of cycle b channel ( Red channel)
3.) Cycle wave b channel (4 year blue channel)

A break of each indicates a trend change at that degree.

Overall the weekly shows prices coming down to the Intermediate wave (C) of [Y] lower channel line. Until this lower line breaks solidly, the Intermediate trend has not yet confirmed to have "changed" from up to down.  However the overall count suggests all the channels will break sooner or later.  In the meantime, they could offer solid bounce support.

Ultimately a break of the Blue cycle wave b channel would indicate that cycle wave c of Supercycle (a) has commenced.

E-minis


Monday, August 26, 2013

Elliott Wave Update ~ 26 August 2013

The market rallied to just shy of the 50% retrace of the entire decline so far. That would make it a good spot to mark the top of wave (a) of Minute [ii]. Wave (b) underway is the primary count at the moment.

E-minis


Friday, August 23, 2013

Elliott Wave Update ~ 23 August 2013

The primary count is Minute [ii] up of Minor 1 down. Has reached the 38% Fib so far. The Wilshire is shown for superior form and channeling but the SPX is the same squiggle count. Minute [ii] is expected to close the huge SPY gap down at around 1685 SPX.
Wilshire:
Weekly.
Sentiment is very low as reported by EWI.  Best count has the market searching for the top of wave (3). We may be there.


E-minis


Thursday, August 22, 2013

Elliott Wave Update ~ 22 August 2013

Still some short term Minute [iv] options, however we'll give the market the benefit of the doubt and suppose that Minute [ii] is underway. Minute [ii]'s price rise would be expected to challenge the SPY gap down at approx 1685 to close it.
Using Wilshire5000 for form:

E-minis


Wednesday, August 21, 2013

Elliott Wave Update ~ 21 August 2013

Our 5 wave count from the market top is shaping up to be a pretty nice looking impulse wave.
Best count has the market looking for a Minute wave [i] low and then a Minute [ii] rebound.

E-minis


Tuesday, August 20, 2013

Elliott Wave Update ~ 20 August 2013

Today's rally relieved short term oversold conditions. Lets look at the squiggle options. 


E-minis


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.

E-minis


Friday, August 16, 2013

Elliott Wave Update ~ 16 August 2013

If we have a large 5 wave pattern from the top, then it does not appear to be finished.


E-minis


Thursday, August 15, 2013

Elliott Wave Update ~ 15 August 2013

Well, that's a start.
Apple:
Wave (3) in yields:


E-minis


Wednesday, August 14, 2013

Elliott Wave Update ~ 14 August 2013

Again underlying market conditions show deterioration. Breadth is waning. Its just that prices have not yet responded. Its almost as if a distribution is occurring. From strong hands to weak. To the public.

Many suggest stocks are consolidating for another move to the upside. But there is also the case where stocks consolidate for a big move to the downside. Deteriorating market internals suggest the downside,


E-minis


Tuesday, August 13, 2013

Elliott Wave Update ~ 13 August 2013

This is a very fragmented market as yet another Hindenburg sighting has occurred.

Internally, the market is showing negative divergence in the up issues ratio. In other words, this market shows signs of serious "cracking".
Bigger picture. Maybe prices will remain elevated for a few more weeks to fulfill a nice symmetry pattern. Who knows. But things inside are deteriorating nonetheless and I suspect that will continue even if prices maintain.