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Tuesday, September 29, 2015

Elliott Wave Update ~ 29 September 2015

We have 5 waves down in the Wilshire5000 which, in my opinion, is the most i,important wave count chart in use. The count would look better if a few more subdivisions played out to finish wave [v] of 1.

Monday, September 28, 2015

Elliott Wave Update ~ 28 September 2015

On the 18th of September's update it was suggested that the top wave counts both pointed to prices continuing to the downside after the Fed reversal. We even had an ending diagonal pattern with the 2020 intraday SPX peak. The subsequent price decline has not disappointed.

Since that time, it has been decided to switch counts from the 2020 high as being a Minute wave [iv] of Minor 1 peak instead of Minor 2 price peak. That may or may not be the case depending on what the market continues to do and any potential further degree of selling pressure.

The only requirement is that the indices make lower lows under the 24 August lows. That has already happened on the GDOW for instance. The Wilshire 5000 is close also. The SP 500 is close.
So far the subwaves since the 2020 rebound peak do not yet count as 5 waves down.
Wilshire 5000 daily. Note that the last wave up to wave (5) at the summer peak is labeled as an ending diagonal triangle pattern which usually suggests that prices will retrace to the start of the pattern - red (4) - very quickly due to exhaustion.  Prices are sitting on a support shelf and if that breaks, perhaps some panic selling will ensue and the downside initial target of 19160 will be reached at the very least..
Weekly: Almost to the black lower channel line.

Friday, September 25, 2015

Elliott Wave Update ~ 25 September 2015

We got a rebound that we expected in last night's update. Is it over short term or will we get more. The wave structure allows for another push although we cannot expect it.

Thursday, September 24, 2015

Elliott Wave Update ~ 24 September 2015

The market has dropped from a Fed peak of 2020 SPX to today's low of 1908 in a very nice 5 wave structure down.  A rebound is probably due and the wave structure supports it.  The open gap down at 1961 - 1967 SPX from a few days ago (see chart below) would be a good target.
Our weekly GLOBAL DOW chart has a very nice 5 wave pattern down from near its peak.  This is a favorite chart and gives the closest indication of total worldwide wave structure combined which is so important nowadays because the world is very much connected in a social mood sense.

Wednesday, September 23, 2015

Elliott Wave Update ~ 23 September 2015

Tonight's update is probably an identical analysis of yesterday's update. The market has deemed the 1937 SPX support line as somewhat important support. It is the buffer zone to a lower floor near 1900.Yet the market has yet to react with any conviction on acting on this support level. Prices meandered around the axis yet again today.

The problem for bulls is if this area of support breaks firmly to the downside, likely 1900-1911 will also break in short time.   And then we are in another potential free-fall area to 1867 or well beneath that. So the market is laboring in this upper price area as a result. It rather not go "test" any lower areas if can help it. Yet each little prod beneath 1937 punctures a hole.

Overnight futures on Tuesday night had plunged all the way to the 1910 area overnight and then furiously rallied back above the 1937 support area by the open. So it seems its important. 

The overall best counts seem to imply that eventually this area of 1937 support will break. The timing is of course up to the market. There certainly can be one more furious rally to the 1975 - 1980 area to shake out any remaining bears (and to close the open gap down) prior to finally giving way to lower prices.

We shall see.

Tuesday, September 22, 2015

Elliott Wave Update ~ 22 September 2015

We mentioned near term support at around 1937 SPX. That was punctured a bit today. The day revolved around this support area and even though prices finished higher, we got all the way down to 1929 SPX. If this fails, expect 1903 to be tested.

Best counts is that the market is working its way down to a lower low under 1867 either in Minute [v] of Minor 1 or Minor 3 itself.  The wave structure since the August low has been overlapping and choppy which indicates its likely a corrective wave to a larger downtrend.

Friday, September 18, 2015

Elliott Wave Update ~ 18 September 2015

The top wave counts suggests a lower low is coming. It would be terribly disappointing if that did not occur.

Interesting channel. Those down-sloping lines are perfectly parallel.

And did we have an ending diagonal triangle wedge for a corrective wave over the past 3 weeks? If so, expect prices to drop quickly back to beneath 1900 SPX.

Thursday, September 17, 2015

Elliott Wave Update ~ 17 September 2015

The market is no longer oversold on a short, medium or long term basis.  Prices have have retraced well above 50% which seems to indicate a wave 2 retrace. There may be some more left to go but it is not required. We didn't quite get the perfect triangle we were looking for. We did not get an (e) wave it appears

(It also appears I correctly surmised that the Fed would not raise rates today. The 3 month yield is only .06%. Well below .25% which - in my opinion - is what it is going to take to trigger a rate raise at the least. The 9-1 vote against raising rates confirms it)
I would not be surprised if the market tests the underside of the broken lower channel line. Of course I like to use the Wilshire because it produces the most excellent trendlines in my opinion. After all, it is pretty much the entire market which is ideal for tracking overall social mood patterns if you ask me.
And Global DOW captures nicely the social mood waves of the entire world collectively very nicely.
PS - I'm pushing Elliott Wave International FREE Club EWI again today. Their short and long term updates newsletters are well worth the money including Robert Prechter's EW Theorist. They talk not only wave counts, but economics, worldwide markets, bond counts, Gold and Silver counts and many other things that support the wave social mood counts.  CLICK MY LINKS to LEFT and sign up for FREE.  Then any product you may buy from them in the future I'll get a small commission. I currently have Short Term Update and Financial Forecast for the past 6 years.  I highly recommend their services.

Tuesday, September 15, 2015

Elliott Wave Update ~ 15 September 2015

The market continues to triangulate. The question is thus; is the consolidation pattern bullish or bearish? I lean bullish because the triangle appears to be an ascending triangle versus descending. An ascending triangle slowly eats away at sellers and the market gets exhausted of selling and eventually pops higher above the triangle. A descending triangle does the opposite: Prices tend to have lower highs (skewed to the downside) and buying is exhausted and the market breaks lower. So far the bullish scenario better fits the overall pattern. As long as key pivot points hold, we must respect the pattern.

That short term bullish scenario fits the wave pattern of a Minor wave 2.  There are 2 prominent open gap down targets much higher above in the market. The top gap is an extreme. Should that gap be reached, it would be an excellent place to try a nice short sell.
On the SPX, the key support level has been raised to 1937 SPX. Should that price point break decisively, well then we have to consider that this entire consolidation period was bearish and the wave count may be Minute [v] of Minor 1 down which suggests a lower low under 1867 SPX..
Yields of course are on the rise prompting wild speculation on if the Fed will raise short term rates or not this week. I have been making a case that the Fed follows the market (as Alan Greenspan has admitted). I base The Fed's rate decision mostly on the 3 month yield rate at the time of the decision.  If the 3 month yield is below .25, no rate change would likely  occur. Today it still stands at .07%. So my guess is no, the Fed will not raise this week.
However, the 6 month yield wave pattern has broken out along with other short term yields such as the 2 year reaching the highest since 2011 (via Zero Hedge). I use the 6 month for wave counts since the 3 month pattern is just too noisy for a decent count.

Monday, September 14, 2015

Elliott Wave Update ~ 14 September 2015

The overall analysis hasn't changed. As long as the ascending triangle is intact, things are skewed bullish short term..
Will the Fed hike rates?  The 3 month T-bill yield is only .07. So the answer is probably not.

Friday, September 11, 2015

Elliott Wave Update ~ 11 September 2015

Short term options haven't changed.
Such precise trendlines on the Wilshire5000.

Thursday, September 10, 2015

Elliott Wave Update ~ 10 September 2015

Nothing has changed from last night's update. The ascending triangle pattern is key short term. There are so many squiggle options at the moment that its not really worth hashing it all out.  That alone, is indicative that no matter what the squiggle count, its likely a correction to the now larger trend which is down.

Wednesday, September 9, 2015

Elliott Wave Update ~ 9 September 2015

All my thoughts on where we are at short term in the market is basically annotated on the single SPX chart below.

The market appears to be tracing an ascending triangle pattern. This could indicate selling pressure is slowly subsiding. We have higher lows being formed and significant thrusts upward. [of course it could be a Minute [iv] of 1 triangle forming]

However not all is well.  Key support is 1903 SPX for the pattern to hold. So we still have quite some cushion above that. But the way things have been moving of late, that's a stones throw away. Additionally overall market breadth took a bit of a negative hit with this afternoon's selloff.  But certainly not fatal. Negative 400 point DOW intra-day reversals will catch your attention quickly. Selling could pick up steam again and the ascending triangle would turn out to be a red herring and fail.

So until the triangle actually fails, we still have the bullish pattern in place and you can see key support points and support lines.  With that said, ascending triangles formed right off a major pivot price low do not usually kickoff new bull markets other than a short term rebound high which we would label Minor 2. There are a lot of underwater people who would marvel at the idea of selling at 2035 SPX. So the pattern is not long-term bullish only merely enough to form a Minor wave 2 proper.

Will it hold? For if 1903 breaks, selling will likely intensify as every algo can see the pattern too.

Good Luck.

PS - I'm pushing Elliott Wave International FREE Club EWI again today. Their short and long term updates newsletters are well worth the money inlcuding Robert Prechter's EW Theorist. They talk not only wave counts, but economics, worldwide markets, bond counts, Gold and Silver counts and many other things that support the counts.  CLICK MY LINKS to LEFT and sign up for FREE.  Then any product you may buy from them in the future I'll get a small commission. I currently have Short Term Update and Financial Forecast for the past 6 years. 

Tuesday, September 8, 2015

Elliott Wave Update ~ 8 September 2015

Market may still be triangulating. We have some options in the count.

Friday, September 4, 2015

Elliott Wave Update ~ 4 September 2015

Price patterns may be triangulating in a contracting manner which would indicate Minute wave [iv] of Minor 1 down,

Thursday, September 3, 2015

Elliott Wave Update ~ 3 September 2015

If the Alternate count is in play, then the market should start to work its way lower from here. But we'll give the Minor 2 count the benefit of the doubt for now.

Wednesday, September 2, 2015

Elliott Wave Update ~ 2 September 2015

Primary count is that the market is in Minor 2 wave up.
As far as interest rates, the 6 month yield has been breaking out. The wave count has it going up in a wave three breaking above a bullish ascending triangle scenario.
However the Fed will not base their interest rate decision(s) based on the 6 month yield, nor longer dated yields. They base their decision most consistently on what the 3 month yield is at the moment. Keeping up with the 3 month yield rate is the "sweet spot" for the Fed banks to make the most money versus the market. They really have no choice in this. Alan Greenspan himself has always admitted that "the market sets the rates".

At the moment the 3 month yield is only .03%. In order for the Fed to raise rates a quarter point, in my estimation the 3 month yield will have to rise to at least .25% for the Fed to hike. They could raise 1/8 of a point, but in that case the 3 month will need to rise to around .13 % and stay there for a bit. The Fed follows the market, it does not lead it.

And so far the bond market is sending mixed signals that confuse the Fed. The 6 month yield is indeed "breaking out" technically. And if it continues as expected, it will eventually affect 3 month yields and they too should eventually breakout to the upside (bond prices move down in that case). And if they do, no matter what the stock market is doing at the time, the Fed will eventually be pressured to keep up with interest rate rises (or declines) based on what the moves of bond market.

Tuesday, September 1, 2015

Elliott Wave Update ~ 1 September 2015

Primary count is that the market price today bottomed in wave [b] of Minor 2.  This count depends that there is no selling pressure tomorrow at the open. So far at this time of posting that is the case as futures are up.