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Friday, March 30, 2012

Elliott Wave Update ~ 30 March 2012

Update 5PM: Update Presidential tracking chart.  At the lower counter-trend channel line.
Potential head and shoulders pattern in the works.
VIX daily.
Trendline for the Industrials.


Thursday, March 29, 2012

Elliott Wave Update ~ 29 March 2012

5 waves down on the e-mini futures strengthens the bear case:
Wilshire top count:
Conclusion: Today's price action greatly enhances the bears' prospects for the near term. However there is not yet a close lower than the previous pivot. Simply put, there is more work to be done for the bearish case to break the uptrend price action.

There is a serviceable 5 waves down and the market can afford a 3 wave bounce, or a 62% retrace.


Objectively we only have 3 waves down at the moment.
As far as last night's update wandering into politics, it was meant to tie into social mood.  Healthcare will be a hot social mood issue in the coming months - no matter the outcome.

As many of you suspect, I have a strong Libertarian impulse. I rather not give up incremental freedoms for the hollow promises of a government bureaucrat. I believe in a truly free market, one that is allowed to fail along with succeed.

I remind you that Obamacare was passed along strictly party lines. Not even one Republican Senator voted for it.  This amount of division for something as large as healthcare is almost unprecedented for something that will have such a dramatic impact on generations of lives.  And now one Jurist (Kennedy?) will decide the fate of generations. Even he said, "This fundamentally changes the nature between the government and the individual". That is a as succinct a statement as it gets and he'll have a hard time backtracking from that statement should he uphold the law. The stakes are indeed high.

What this extreme division on only 1 topic shows is that social mood is not coalescing in a true bull market but rather dividing. This division will probably get amplified with the Supreme Court ruling one way or another.  Pass or fail, its going to get ripped. (and we should know at the end of June).

As far as Occupy Wall Street, I have a lot of sympathy for the anger against banks. But their solution it seems would be to have more government interference and "solutions" (thus resulting in more crony-ism as a result!) as the answer which goes against my personal grain.  I also identify with Tea Partiers who can see what I see - that the country is headed for financial catastrophe at this rate. If the two ever made common cause, the oligarchs would have a real problem on their hands. But social mood predicts they will probably not.

Incidentally my prediction is that the two forces of OWS and TP'ers will be making a comeback in 2012. The prediction of social mood ready to go down again should ensure that. The weather is getting warm which makes it easier to gather and protest.  We are seeing that with protests against the shooting in Florida.  So we have a new element in the mix this year - racial division.

Its going to be a tumultuous summer I think.

Wednesday, March 28, 2012

Elliott Wave Update ~ 28 March 2012 [Update 8:21PM]

Update 8:21PM: A small comment on Obamacare being argued before the Supreme Court.

The government seems to be defending the individual mandate by basically saying healthcare is "unique" and that the court should give the law a pass based on this. Actually they need only persuade one Justice (Kennedy most likely).

But this "uniqueness" defense assumes that Obamacare will be good for the nation and fix any and all problems.  I think the law can be also be argued against based on this uniqueness.  Yes healthcare is unique and the worst thing we can do is let government take it over for surely within 10 years is will be a complete hopeless mess.  Thats what I'd have argued as a counterpoint.  I need only point toward housing and the mortgage market as an example.

But take it over is what the plan was all along.

I hesitate to predict how this goes.  I lean toward the law being upheld in its entirety.  And the Democrats and Team Obama will have their Pyrrhic victory as I tend to think social mood will unleash a lot of anger  against the ruling if its upheld that will show up in the ballot box.

And if it is ruled against you can be assured that the political left will be mobilizing and causing havoc, riots, the usual stuff. Occupy Wall Street will look lame in comparison. This is why I think the Justices will uphold the law in the end.

It is fitting that on the Great Right Shoulder of the Bubble Years, that "Universal" Healthcare was finally achieved.  Yet is is a hollow victory coming at the worst time as the country is broke.

Neither of the top 2 counts have been eliminated.
Industrials and its trendline. 5 touches makes this important.
Another count to keep in mind would be an ending diagonal triangle count.


Tuesday, March 27, 2012

Elliott Wave Update ~ 27 March 2012

The 2 counts presented last night are both still intact.
The Wilshire hourly chart shows the bigger picture:


Monday, March 26, 2012

Elliott Wave Update ~ 26 March 2012

The best counts at the moment:

1.) SPX and Wilshire5000 are in wave (v) of [v] of C.
This count has some things going for it namely there is a slew of non-confirmations between indexes as of the close today.  Today was also less robust suggesting it may be a wave (v) of [v].

2.) SPX and Wilshire5000 are in wave (iii) of [v] of C.
This count would fit the wave (iii) if Wave [v] = wave [i] @ over 15,269, another 350+ points higher in the Wilshire.  This implies there is much more upside to wave (iii) of [v]. SPX target is 1440  - the May 2008 peak - or 1448 where [v] = [i].

This chart shows both options:  
Again, here are the 2 top counts:
If this is merely wave (iii) of [v], then 15,269 would be where [v] = [i]. In this case likely wave (i) of [v] would be the extended wave, not (iii).

Sunday, March 25, 2012

Friday, March 23, 2012

Elliott Wave Update ~ 23 March 2012

There is a serviceable 5 waves down on the Wilshire5000 and S&P500.  The fourth wave triangle helps the cause:
SPY has some unclosed gaps:
Bigger Wilshire picturre:
SPX weekly. Bubbles.
Even bearish DOW theory is still intact: Transports failed to make a new closing high versus its early February high:
VIX seems uninterested.
Oversold we are not:
Even the e-minis had 5 waves down, albeit with overlap.


Best count is that five waves down has occurred:

Thursday, March 22, 2012

Elliott Wave Update ~ 22 March 2012

There are at least 5 waves down on the Wilshire 5000 and S&P500.  The pullback since the 1414 SPX high is probably too deep to be considered part of a 5 wave move structure from the 1340 SPX pivot low.

So we have a 5 wave count up from 1340 to 1414 SPX. Question is, does that imply 1414 SPX is the top of P[2]?  For now we can assume so unless something else emerges (such as a higher high above 1414 SPX).

Best count might be for a wave (ii) to cover some gaps down.
There is a nice 5 wave pattern from the late November low.
Transports really took a dump. They have not confirmed their early February closing high although they did make a higher intraday.
The implications of this chart are self evident.


Wednesday, March 21, 2012

Elliott Wave Update ~ 21 March 2012

Possible wave (iv) triangle in the works although it doesn't look like a healthy triangle due to the way the sharp break from 1414 formed the "a" wave which in fact could be five waves down from 1414 to "a".

So there is not a lot of confidence in this count.
The NASDAQ 100 and Composite both made new highs today.  The DJIA sports five waves down at the moment.  Thats an ominous sign for market bulls.
Sooner or later, Apple is going to crack. IPADS that run hotter, using up 2 gigs of allotted download in only  a couple of hours. Iphone batteries that don't last for long at all. Overpriced computers.  Buying back stock? Are you kidding me? That decision was made after hitting $600?


Tuesday, March 20, 2012

Elliott Wave Update ~ 20 March 2012

We got the hard backtest of the 1400 SPX support area as suggested in yesterday's update and it held pretty good for today.  We'll call today's low wave (iv).

Tomorrow should be a telling day for the overall short term wave pattern from the 1340 low.

Again, there are enough waves in place to consider wave (v) has peaked at yesterday's 1414 mark. However, the pattern still looks decent with today as a wave (iv) low so thats the count for now.

We have a solid channel formed where (i) and (iii) and (ii) and (iv) connect on a parallel channel. We also have a sideways corrective (ii)  alternated with a sharp corrective (iv).  We also have some Fib targets based on wave relationships.


Monday, March 19, 2012

Elliott Wave Update ~ 19 March 2012 [Update 9:50PM]

Update 9:50PM: An e-mini count:

Update 6PM: A comparison of the NY Composite Index to the NYSE advance/decline. 3 day divergence at the close of today. Thats bearish if not confirmed soon.
Update 5:22PM: Here is an SPX 5 minute chart.  Again, we are trying to confirm a wave (iii) high and a wave (iv) pullback. A significant break of this proposed channel to the downside would imply the 5 wave move from 1340 is over. Again, we'll give the benefit of the doubt to the bulls here.
Trying to confirm wave (iii) and (iv) of [v] of Minor C.

The market popped higher today and barreled past the Wilshire5000 14,825 - 14,830 price target range. That was the price range where  [v] = .618 x [i] within wave C and where (v) = .618 x (i) within wave [v] of C.

If [v] = [i] then the target for the Wilshire5000 is approximately 15,269. The equivalent for the SPX would be 1448 SPX if [v] = [i] within C.  But 1448 is above the 1440 May 2008 intraday price peak on the SPX so that is a tall order for a fifth wave to achieve.

On the near term, we are trying to count 5 waves up since the 1340 SPX pivot low. Using the Wilshire5000 for form, we have several variations:

1st variation presents an interesting channel in the making. This supposes that wave (iii) peaked in price today. This would be the preferred count probably for now. This implies a hard backtest of the SPX 1400 support area is required for (iv).  This even allows for a gap down tomorrow if need be.
2nd variation imagines a significant high has been reached or nearly reached.  Again, there are enough waves in place, however it just doesn't feel or look quite right. However it does channel well with (v) hitting the midpoint.
3rd variation is that a breakout of 1400 has occurred and the market will just keep going up until it reaches 1440ish.  I would think there is a hard backtest of 1400 SPX to occur first though so this squiggle count is not the top variation.
Wilshire 5000. We can guess where wave (ii) of [v] of (c) probably is but figuring out where (iii) and (iv) of [v] is still a bit tricky. Once we can confirm where (iii) and (iv) are or will be, then finding (v) should be recognizable.