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Thursday, August 4, 2011

Elliott Wave Update ~ 4 August 2011 [Update 10:35PM]

[Update 10:35PM: The VIX weekly chart is very representative of overall social mood. We had massive panic in 2008 and a need to correct. It took a few years but now it appears we are "ready" for another panic surge, perhaps even much greater that that in 2008.

Look, there is going to be big market bounces. Squiggle charting is more an art than a science. However, the overarching theme is that social mood - in fact global social mood - is turning down in a huge wave.  The stock market reflects this mood and is its barometer. Thats EW theory in a nutshell. Counting waves yes is nice, but ignore the underlying social mood foundation of EW theory and you will be lost over a long time. This is something that Prechter understands deeply and I concur with.

The real question is simple: Has long term social mood bottomed and destined to get lower than that in 2008? If you answer that social mood is likely to deteriorate worse than 2008 then you can be reasonably certain that in time, the market will follow suit the downturn of mood. That has been my stance since I founded this blog. And I think you can all agree social mood - nature's forces at work - has not bottomed long term.
[Update 10:23PM: Netflix. ED pattern. This chart has been on my public page for a while.
[Update 10:20PM: NYAD weekly:
[Update 10PM: As I have been saying since the DOW Transports made a new high, DOW theory divergence supported a bearish market move.
[Update 8:42PM: Gold count looks mature. Weekly and Daily.
[Update 8:30PM: French CAC. It always was a lumpy weak looking wave pattern that was destined to get smacked.  Prices back to 2008 crash range.

[Update 8:15PM: In conjunction with this chart, and this chart, the stock bond ratio just hit epic proportions and surpassing the crash of 2008. Amazing considering we are officially 100% debt to GDP ratio.  Via the excellent Sentiment Trader.
  [Update 8:08PM: Another look at the Supercycle channel line:
 And the recent interaction. Tried to poke above but c'mon, give it up. Note that the market crashed from this line in 2008.  PS - See the green mid-channel line?
[Update 8:04PM; Gah! I was charting around with TBT and realized the whole thing looks like a big darn falling wedge. Wish I had seen that a few days ago.  (yeah I know your not supposed to chart inverse ETF's but ain't it a cool chart?)
The other night  I suggested this chart that serves as a basic guide if this is a wave [iii] down.

Now we are realizing a reach toward Fibonacci 1.618 x [i].
 Squiggles don't yet seem "done"
True panic selling today and the 60 minute chart above shows the down pressure and decliners.

30 year bond prices have thrusted and squeezed more violently than I had anticipated. But looking at prices over the last few years, this has been the pattern.
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