E-minis

Elliott Wave Update ~ 12 September 2012 [Update 6PM[

[Update 6PM]
Bond count on 10Y 
Along with extremes being registered in stocks and commodities, we have bonds which may on the verge of a wave three up in yields. Question: Are rising yields good for a $16T national debt?  Hmm, ask Greece, Spain, Italy that question.

A break up and over of the downtrend line is of course bullish for yields (bearish for bond prices).  Yields also happen to be in a falling wedge pattern just like stocks.

During P[3], I surmise that stocks and bonds will sell together hard at many points in time. We have seen this in Spain and Greece.  Where all "assets" are sold.  The net receiver of this? Of course King Dollar.

ORIGINAL POST
We may have yet another triangle developing - likely to be resolved by the Fed's announcement tomorrow afternoon.

Using the Wilshire5000 for form:

We can see that the market has been triangulating since its June low as a way of consolidating price gains.  Each successive triangle (well we have only 2 so far for sure) has been of lesser degree than the last (as it should be per EW theory).

I still give the market the benefit of the doubt to reach toward its upper wedgeline. That is about 1450ish SPX if it were to occur this week.

Wilshire weekly - and another way to label the rise since 2009. Its a tough count. But one thing that the count is not - is an impulse. And what the count is not is sometimes just as important of what it may be.

SENTIMENT MEASURES:

Another big pullback in Sentiment for the US dollar.  Via Sentiment Trader

Will our wave count work? Its starting to not "look" correct. This correction has been pretty deep. But we'll see what happens. Certainly excess bullishness was worked off thats for sure in a short amount of time no less..

One sentiment survey that has been fairly consistent with indicating intermediate-type tops has been the NAAIM (National Association of Active Investment Managers) survey. Again via Sentiment Trader this is the data as of last week (6 September). We'll have new numbers tomorrow and it could well be higher in bullish sentiment. Don't let anyone say things are "too bearish". This chart directly refutes that notion.

Via Elliott Wave International, as of last Friday, Gold Daily Sentiment Indicator was 90% bulls for gold, and 92% bullish for silver (via Trade-Futures.com).

So bullish sentiment is certainly frisky on a number of fronts (and bearish on the dollar).  Things are again setting up for a big turn.

E-minis

Elliott Wave Update ~ 11 September 2012

I tend to think that prices will lunge one more time to reach the upper wedgeline on the Wilshire 5000 (and hence the S&P500). This price is about 1450 on the S&P.

Wilshire weekly shows that prices have room to move to its upper wedgeline.

DJIA confirmed a wedge move today.

Squiggle count has lots of options.

E-minis

Elliott Wave Update ~ 10 September 2012

It is of my opinion that the market has formed a giant ending diagonal triangle since the 1010 SPX low in 2010.  One could also make the point that a double or even a triple zigzag has formed since the 2009 low.

The wedge shape is undeniable. Whether or not it is counted as a true ending diagonal can only be assessed if prices collapse after the end of the diagonal has played out. This is an important aspect of an ED pattern.  ED patterns signal exhaustion and the size of this potential ED pattern is certainly the biggest ever.  Therefore a subsequent price collapse would undoubtably be quite dramatic. I am predicting that is exactly what will occur. The timing will be of the market's choosing. Yet the wave pattern indicates that if this is the case, we are getting close.

With all that said, the most important thing that the wave pattern has not displayed since the 2009 low is an impulse pattern which would  consist of 5 waves from the 2009 low to some supposedly "cycle top" (and/or supercycle) sometime in the distant future. One can make the argument that this supposed 5 wave pattern is somewhere in the middle (i.e.-near the "third of a third" up) but one would have to project a wave that plays out not only many more thousands of points up in the DJIA, but one of time in which the market "bull" is only 1/2 over at best and there is another 3 years to go at least.

Fundamentals, wave structure, technicals and sentiment does not support this at this time nor is it likely.  The world's debt crisis grows ever bigger with each month.  Social mood is, despite the primary upturn of wave [2], still in an  overriding supercycle degree making its way ever lower. You can feel it.

I tell people all the time, even if the markets make a higher high above its 2007 high, I would not label this an impulse up from the 2009 low. It would be either a cycle x wave or a cycle b wave of some kind.  The results would be the same after completion: Bearish outcome.

Squiggles could be over or nearly so.

E-minis