Custom Search

Tuesday, May 31, 2011

Elliott Wave Update ~ 31 May 2011 [Update 8:07PM]

[Update 8:07PM: Every time I read about Greece, I imagine I am watching a Sopranos episode, particularly what Tony S. and crew did to his childhood friend "Davey" Scatino (played by Robert Patric)

As Tony admits, his predatory nature steers him toward making loans to people they know cannot pay it back. Then, when heavily indebted, they asset-strip what remains as a consequence and/or control the lives of those they put into debt. Debt slaves of the mob. In the end they wind up destitute and dead.

Is the IMF and ECB no different with Greece?  Once they strip Greece of all their assets (land,etc), including gold, who doubts they will not just leave the carcass behind and declare Greece a basket case? Where will the loans then come from? Surely once the assets are gone, there will be no need for more loans.

In related news, Belarus has now an uninvited visit from the IMF.

Quote from the article:  "The International Monetary Fund said Tuesday that a mission would visit Belarus on June 1-13 for regular post-program monitoring. Minsk has not applied for IMF funding so far."

You can bet the banksters will be making a deal Belarus just cannot refuse. ZH is correct in branding these people (bankers) sociopaths.

Is it no wonder people are pissed off? The bear market in social mood ain't over by a long shot, that much I am confident in.  

The best evidence of a triangle is a somewhat complex [c] wave that still followed the rules of a 5-3-5 zigzag. Bullish sentiment corrected to certain bearish extremes in some measures such as the AAII survey, the NAAIM survey in those who expect a correction, and the small trader lack of speculative calls as % of total volume. All these have been pointed out by Sentiment Trader the past few days/week. And all suggested a "surprise upside" day was in store. And thus the algo-directed market made it happen after an overnight futures ramp.

Additionally, the triangle count may give the best Fibonacci timeline for Intermediate wave (C).  Intermediate (A) was more or less 13 months, it would be fitting if (C) was equal in time to (A). Why? Because in a zigzag wave relationship, wave (C) usually relates to wave (A) in Fibonacci terms in either price or time. The best opportunity for price was (C) = .618 (A). That has come and gone somewhat and for instance the Wilshire (C) = .652 (A) at the recent peak.

So rather than price, perhaps the time factor is involved instead.  And without doing the exact math, if (C) lasted as many trading days as (A) we are looking at the middle of July as a peak for (C). The triangle gives us the best chance to meander and achieve this time ratio without too bullish a price, too quickly.

This count isn't really a count at the moment as much as a pattern.  A quick burst to the upper line using an (a)(b)(c) move (this aspect is important to it being a wedge) formed by recent peaks may be in order for the market. This move would look somewhat similar to a triangle move but be much quicker and have differing price points.

The wedge may overthrow and result in a true turnaround day where people realize, enough is enough and the market, versus fundamentals, is just getting silly.

Of course, the mark of a wedge is that prices collapse to back under where the wedge started in quick fashion.  And that would be under 1250 SPX. So we eagerly await.

Price action and technicals don't really lead one to believe we have a LD count down. The wave evidence also is extremely suspect.  But new highs are certainly not necessarily in the cards for all indexes or any indexes for that matter.  So we'll keep this on the count board just to say we haven't forgotten the top bearish count.

What supports this count? The world is awash in financial danger and truth be told, I'll just quote our former President:

 "At first, I thought we could deal with the problem one issue at a time,'' Bush said. ``The house of cards was much bigger and started to stretch beyond Wall Street. When one card started to go, we worried about the whole deck going down.'' - George W. Bush Sep 22, 2008

Absolutely nothing has been fixed since he said that.

[Update 7PM] Still using the NYAD count for clues to the entire wave structure. New All-time high today. Yet I will note that again, the day ended less than 4:1 up volume ratio.  We haven't been able to muster a day more than this since early March. The weakening "lower highs" downtrend in bullish days is consistent that the market is in the latter stages of the nearly  year long proposed (C) wave.
[Update 6:05PM: Wedge formation is also on the radar where a persistent uptrend again displays itself all the way to the upper trendline. This price action would force the bearish surveys (for instance the bearish AAII and low call volume from small traders) and what not as of late to flip bullish much quicker.   Time will be shortened and price points would be different than the triangle below, but the basic moves would be similar.
Triangle Minor 4 count is the preferred count.  Current leg would be the [d] wave with a price target of 1358 SPX or the open gap spot.
The Wilshire gives a nice visual

blog comments powered by Disqus