But note the low in the e-minis was much lower at 1077 which occurred in an overnight session.
Thursday, September 22, 2011
E-minis
Overnight slide. Wave (d) of a triangle [iv]? Or part of wave (iii) of [v] of 1 down? In the end it may not make much difference as in both cases a low under 1101 SPX is required.
Wednesday, September 21, 2011
Elliott Wave Update ~ 21 September [Update 6:50PM]
[Update 6:50PM
LETS TALK BONDS
Elliott Wave International said it perfectly tonight in their Wednesday update:
Quoting Steve Hochberg:
"Can the news become any more bullish for longer-dated government bonds, with today's announcement that the Fed will purchase $400 Billion of six-to-30-year maturities? Ironically, the Fed's announcement appears to be coinciding with the end of the rally, which has already occurred over the prior 8 months. The supposed "good news" of the Fed's purchase decision is a strong bearish indicant for prices, at least over the short-to-intermediate term."
I wholeheartedly agree. Remember, rallies end on "good news" not bad. The news cannot get much better than this for bonds. However I'll go ahead and state that bonds may be working on their all-time high.
Hochberg then showed a TLT chart and I'll post my own count that pretty much looks similar. There is almost no other way to count it anyway. The count assumes today was a wave [iii] of 5 of (5) of perhaps [5]. Only time will tell of course.
A price drop back under "3" is our wave count control price and indicates a turn down. It can be speculated that a "peak" in bond prices for wave 5 will coincide with a low in equity prices wave 1. We have not yet reached wave 1 low in equities, therefore we may not yet be at the top in bonds. There likely will be divergence between the two prior to the turn(s).
The yield curve has indeed been flattened. Recall that when the crisis of 2007-2008 started yields were much higher and had room to maneuver lower. In 2011, there is little room for yields to move lower. In other words in the opening months of of P[3], Bonds may have peaked! And may have peaked for all-time.
This only means up for yields, or at best sideways for a while. But bonds are debt and the entire crisis is really about bad debt to include that of the United States! Raise your hand if you think the US will ever pay back its national debt. Nobody raising their hand? Well that means one thing, there must be a lot of bad debt in there....
Simply put, if bonds sell off in many places in P[3] and equities sell-off, it will be a double-banger. Higher interest will beget more defaults which beget more deflation which destroy asset values (think pension funds) which beget more selling which will bring riots.....you know the drill. Just ask Greece. Their bonds and stocks both have been selling to the point of bankruptcy. Ask the Italians who are feeling the yields squeeze and their stocks are selling hard also. Yes bonds and stocks can sell at the same time. Its call risk aversion.
The US is no different, its just not "contagious" here yet. But the theory is that P[3] down will ensnare every bad sovereign debt eventually. I.E.- Liquidity flows searching for "safe havens" but in the end, there can be no haven if there ever is to be a true recovery. The bad debt must be purged including national debts. At least a decent portion of it. That is P[3]'s job: To purge the system and that will take lower prices. If man refuses to take action, nature will do it for him. That is Elliott Wave theory!
BOND SENTIMENT
Bond sentiment is reaching extremes and no doubt will get a boost with today's price action. This sentiment would coincide with a near top in a multi-month rally. But we may have some more to run if we area awaiting waves [iv] and [v] of 5.
Via Sentiment Trader, here is one composite-type sentiment indicator they use. The data includes today. This is a long-term indicator and we should be looking for a turn down in bond prices sooner rather than later.
DIVERGENCE ON THE YIELD CURVE
If you have followed my thinking on bonds over the last many months, I have proposed that a divergence in the yield curve will help us mark the all-time bond turn. The divergence is still intact.
Approaching overbought levels on the...monthly and hit a long-running trend line.
[Update 4:50PM: Weekly Wilshire 5000 showing the long term wave pattern.
ORIGINAL POST
There is still a valid continuation-type head and shoulder pattern in play I talked about in the recent past. The downside target is shown. I consider the 50 DMA "tested" and failed and the market has reacted accordingly. The internals were continuously getting weaker with each upside stab.
LETS TALK BONDS
Elliott Wave International said it perfectly tonight in their Wednesday update:
Quoting Steve Hochberg:
"Can the news become any more bullish for longer-dated government bonds, with today's announcement that the Fed will purchase $400 Billion of six-to-30-year maturities? Ironically, the Fed's announcement appears to be coinciding with the end of the rally, which has already occurred over the prior 8 months. The supposed "good news" of the Fed's purchase decision is a strong bearish indicant for prices, at least over the short-to-intermediate term."
I wholeheartedly agree. Remember, rallies end on "good news" not bad. The news cannot get much better than this for bonds. However I'll go ahead and state that bonds may be working on their all-time high.
Hochberg then showed a TLT chart and I'll post my own count that pretty much looks similar. There is almost no other way to count it anyway. The count assumes today was a wave [iii] of 5 of (5) of perhaps [5]. Only time will tell of course.
A price drop back under "3" is our wave count control price and indicates a turn down. It can be speculated that a "peak" in bond prices for wave 5 will coincide with a low in equity prices wave 1. We have not yet reached wave 1 low in equities, therefore we may not yet be at the top in bonds. There likely will be divergence between the two prior to the turn(s).
This only means up for yields, or at best sideways for a while. But bonds are debt and the entire crisis is really about bad debt to include that of the United States! Raise your hand if you think the US will ever pay back its national debt. Nobody raising their hand? Well that means one thing, there must be a lot of bad debt in there....
Simply put, if bonds sell off in many places in P[3] and equities sell-off, it will be a double-banger. Higher interest will beget more defaults which beget more deflation which destroy asset values (think pension funds) which beget more selling which will bring riots.....you know the drill. Just ask Greece. Their bonds and stocks both have been selling to the point of bankruptcy. Ask the Italians who are feeling the yields squeeze and their stocks are selling hard also. Yes bonds and stocks can sell at the same time. Its call risk aversion.
The US is no different, its just not "contagious" here yet. But the theory is that P[3] down will ensnare every bad sovereign debt eventually. I.E.- Liquidity flows searching for "safe havens" but in the end, there can be no haven if there ever is to be a true recovery. The bad debt must be purged including national debts. At least a decent portion of it. That is P[3]'s job: To purge the system and that will take lower prices. If man refuses to take action, nature will do it for him. That is Elliott Wave theory!
BOND SENTIMENT
Bond sentiment is reaching extremes and no doubt will get a boost with today's price action. This sentiment would coincide with a near top in a multi-month rally. But we may have some more to run if we area awaiting waves [iv] and [v] of 5.
Via Sentiment Trader, here is one composite-type sentiment indicator they use. The data includes today. This is a long-term indicator and we should be looking for a turn down in bond prices sooner rather than later.
If you have followed my thinking on bonds over the last many months, I have proposed that a divergence in the yield curve will help us mark the all-time bond turn. The divergence is still intact.
My 30 year yield count has taken quite a beating but the main count of a wave [2] is still intact.
[Update 5:15PM: CMG. Overlapping waves up here with a double negative weekly divergence.
There is still a valid continuation-type head and shoulder pattern in play I talked about in the recent past. The downside target is shown. I consider the 50 DMA "tested" and failed and the market has reacted accordingly. The internals were continuously getting weaker with each upside stab.
It may be tracing a triangle and this would be the (d) wave down.
The overall count requires a new low at least under 1101 SPX. Thats the main point at the moment.
The NDX made a very nice rising wedge complete with "overthrow" and then with subsequent price reversal.
Tuesday, September 20, 2011
Elliott Wave Update ~ 20 September
Until and unless 1230 SPX gets breached to the upside, the actions of late still counts best as a "sideways" wave [iv]. Degree is not important at the moment. EWI uses a wave degree higher and they may be right in the end but for now its a moot point. I am using smaller degree waves as a vision of 1000 DOW eventually for an ultimate bear market low years from now will probably justify the labeling. But for now, its not important. They only thing that is important is interpreting the form and direction.
Additionally if this is a wave [iv], there is still a possibility it is developing as a triangle. There have been a succession of zigzags lately and that is a requirement of a triangle. But again, form is a moot point also - a wave [v] requires a new low unless truncated and I don't suspect truncation for a wave [v] to occur in the SPX or Wilshire 5000. So the target is that the market works its way lower to 1100 at the least in a wave [v].
There may have been truncation occurring in the subwave (v) of [iii] (ala 2008 in 5 of (3) after the big crash) but there shouldn't be on wave [v].
Daily stills shows that the 2010 peak is significant resistance. A failure to take this level should result in selling. The daily shows an ALT:1 in a slightly differing spot. Also note that it can be considered that today represented a "visit" to the 50 DMA. It will look that way on the chart as the 50 DMA is dropping fast.
Additionally if this is a wave [iv], there is still a possibility it is developing as a triangle. There have been a succession of zigzags lately and that is a requirement of a triangle. But again, form is a moot point also - a wave [v] requires a new low unless truncated and I don't suspect truncation for a wave [v] to occur in the SPX or Wilshire 5000. So the target is that the market works its way lower to 1100 at the least in a wave [v].
There may have been truncation occurring in the subwave (v) of [iii] (ala 2008 in 5 of (3) after the big crash) but there shouldn't be on wave [v].
Monday, September 19, 2011
Elliott Wave Update ~ 19 September 2011 [Update 6:52PM]
As far as all the flagging people have been doing lately - and a lot of it seems out of spite against particular commenters - I disabled the functionality of flagging. Comments shouldn't disappear anymore even if someone flags it.
As far as moderation I have said this before: Police yourselves for the most part but I don't want a Yahoo board and if the only way to fix things is to start banning people for a bit then so be it. Keep the pure politics at a minimum is my suggestion as there are other forums for that. However, I don't mind discussions as how politics and politicians play into the larger scope of social mood, policies, etc. Just use good common sense. I generally loathe politicians but a blog boated with "I hate George Bush/B Obama" doesn't really add anything of value.
Also personal attacks is frowned upon. Hey we have to have a little bit of thick skin, but again, if you push things you'll be banned.
So for the most part, I want to run a respectable comment blog and keep it that way.
I cannot always monitor threads (particularly during the day) and sometimes I don't have much time at night. I wish I did but at the moment I am going through the process of buying a new car (my beater broke down finally and caused much headaches) and possibly a small humble home to live in as I rent still and cannot rent my current place for much longer.
I dread both, but I am not getting younger, my family needs a decent roof over their head and its tough to make ends meet sometimes. The donations that I do get I appreciate very much by the way.
[Update 9:48PM: A look at the weekly:
[Update 6:52PM: E-minis. 5 waves down from its recent high, 3 back up.
Hat tip from several readers on how you can view the pictures the old way by instead of left-clicking the picture and bringing up the new thumbnail stream, you can instead right-click on the image directly from the blog post and select "Open link in new tab" option. The new tab with the picture is then zoomable with a left click on the picture as per before.
ORIGINAL POST
The 50 DMA is coming down fast. Sooner or later the market will test this key mark. 1230 SPX remains a significant high water mark over the last 6 weeks. The 2010 peak of 1220 SPX is notable resistance. The Bollinger Bands are tightening up again.
The news of the day still gyrates between "hope" and doses of reality of the situation at hand. It smacks of a wave four mentality.
As far as moderation I have said this before: Police yourselves for the most part but I don't want a Yahoo board and if the only way to fix things is to start banning people for a bit then so be it. Keep the pure politics at a minimum is my suggestion as there are other forums for that. However, I don't mind discussions as how politics and politicians play into the larger scope of social mood, policies, etc. Just use good common sense. I generally loathe politicians but a blog boated with "I hate George Bush/B Obama" doesn't really add anything of value.
Also personal attacks is frowned upon. Hey we have to have a little bit of thick skin, but again, if you push things you'll be banned.
So for the most part, I want to run a respectable comment blog and keep it that way.
I cannot always monitor threads (particularly during the day) and sometimes I don't have much time at night. I wish I did but at the moment I am going through the process of buying a new car (my beater broke down finally and caused much headaches) and possibly a small humble home to live in as I rent still and cannot rent my current place for much longer.
I dread both, but I am not getting younger, my family needs a decent roof over their head and its tough to make ends meet sometimes. The donations that I do get I appreciate very much by the way.
[Update 9:48PM: A look at the weekly:
ORIGINAL POST
The 50 DMA is coming down fast. Sooner or later the market will test this key mark. 1230 SPX remains a significant high water mark over the last 6 weeks. The 2010 peak of 1220 SPX is notable resistance. The Bollinger Bands are tightening up again.
The news of the day still gyrates between "hope" and doses of reality of the situation at hand. It smacks of a wave four mentality.
The NDX chart is one to watch. A spectacular bearish wedge-shaped move to test the underside of a long-running broken up-trendline.
Sunday, September 18, 2011
E-minis
Google updated their format for how you view pictures apparently. I didn't change anything. If you click on a picture the whole post's pictures are displayed as a thumbnail stream at the bottom.
Each picture still has its own link located on the lower left after you bring one up in the new mode. If you click the link, you can get the old way of viewing and after opening a single picture that way, you can click the picture again to make it bigger just like before.
To get out of thumbnail stream view, click the X in the upper left corner.
I kind of like the new picture viewing formatting in some ways and in some ways not. I am not even sure if I can change things back, I haven't read up on it and am not the one to tinker under my blog's hood for fear of screwing things up beyond repair.
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