Sunday, January 31, 2010
Thursday, January 28, 2010
Well, it looks like I'll get my birthday present for tomorrow : ) All the markets made new lows today.
Have a look at my alternative count I posted for the Nasdaq in my weekend update:
I wasn't that bearish for this week that's why I didn't prefer this count. But now this one looks perfect for the Nasdaq and the SPX as well. These up and down moves we were seeing over the last few days looked like the wave 4 wave 5 action I explained in that post.
Wave 1 may have ended today and wave 2 started. And btw if not it's not that bad since I won't go long for this upwave anyway. I'm just waiting for a nice short opportunity ; )
Wednesday, January 27, 2010
"I like the SPX count that favours a 4th wave finish, which was an a-b-c flat and that it has started the commencement of a 5th wave which could possibly pull up wave 1 down between 1080-1085."
And this was the perfect description for today's trading day!
I was wrong yesterday expecting wave c of 2 up to 1105+. The SPX made a new low today and should have completed wave 1 now. The end of day rally should be the beginning of wave 2 which I hope to reach at least 1115-20 to give a nice short opportunity.
After wave 2 will have finished wave 3 should start and drop down into the low 1000's.
Tuesday, January 26, 2010
For charts look at my SPX chart I posted on Saturday: http://www.wavaholic.com/2010/01/s-500-elliott-wave-update-week-3-2010.html
It has been quite accurate so far ; )
Sunday, January 24, 2010
1 - The all time high. The candle stick pattern looks very similar to today: A doji was followed by a big red candle which closed at the low of the week. The next week was up and retraced more than 62% of the first wave.
2 - The top of Intermediate wave (2). Yesterday, I recieved an email with the following chart:
In both cases the new downtrend started with some strong down days. The following second subwave of the first downwave of Intermediate (3) was very short, less than a 50% retracement.
3 - Today. Again a big red candle which closed at the low of the week. There are two fractals in the recent past which call either for a big or a short wave 2.So it may be quite difficult to short the top of wave 2 since we may not get the usual 50-62 % retracement.
Seven weeks later the chart looks like this:
Saturday, January 23, 2010
On Tuesday the SPX made a new high at 1150 invalidating my favourite count I posted last weekend. But it also failed to break above 1150 for the third time. On Wednesday the market sold off back to 1130 again and one day later the breach of 1130 confirmed the beginning of a new downtrend as written on Tuesday. Till the end of the week the SPX lost another 40 points and closed near 1090.
Thursday, January 21, 2010
Yesterday's drop can be counted as wave 1 and today's as wave 3. Wave 3 is a bit short but we're at a support so the third wave may have ended. Tomorrow after some retracement in a wave 4, wave 5 should follow down to 1100 or so which would complete the first wave. The SPX mustn't rally above today's high for this count to stay valid.
Wednesday, January 20, 2010
Today we learned that you don't have to be on a ship to get seasick - just watch the stock market!
What took weeks in 2009 (endless bouncing between 1090 and 1120) takes in 2010 only days.
With today's drop I have the following counts:
- The Nasdaq didn't make a new high yesterday, so, my preferred count I posted on Saturday is still valid and still my preferred count.
- The SPX however made a new high yesterday hence I changed to my alternarive count. Should the market fall below 1130 the top should be in (<< I did it again!!! : )).
Tuesday, January 19, 2010
With the new high today I changed to my alternative count... I know I gave it a very low probability but today I've learned that they don't need a Monday for a big rally.
I don't see a bullish count for the Dow (beside a uber bullish one (the ED could be a leading diagonal...)) so just take the alternative count for the Nasdaq and SPX.
Targets are still 2340 and 1160. A drop below 1130 should confirm that the fifth wave is finished.
Sunday, January 17, 2010
Saturday, January 16, 2010
Friday, January 15, 2010
Charts will follow tomorrow ; )
Wednesday, January 13, 2010
In the meantime the Dow made a new high and is completing an ending diagonal. So, it's entirely possible that the Dow topped today or tomorrow and the Nasdaq peaked a few days ago.
Tuesday, January 12, 2010
Monday, January 11, 2010
I didn't find any time to write the weekly update for the SPX so sorry about that. But since the Nasdaq count looks much clearer at the moment anyway I prefer to follow the Nasdaq.
The magic numbers stays at 2285.23, the wave [iv] low. As soon as the market falls below that level I think the correction or even a new downtrend has started.
Saturday, January 9, 2010
Friday, January 8, 2010
Thursday, January 7, 2010
Wednesday, January 6, 2010
Tuesday, January 5, 2010
Monday, January 4, 2010
Sunday, January 3, 2010
The bulls dominated 2009.
2010 - it's time for the bears to strike back!
Within some days I expect this bear market rally to finish. From there the market should start a new severe decline over the next one or two years and fall well below its March 09 lows. I still like the 450-500 points area in the SPX as a bottom for the entire bear market.
The clue, whether the bear market rally will have topped or not, will give us the next wave pattern to the downside:
Let's say we'll get a move down towards 950-1000. If this move down unfolds as any corrective pattern (i.e. only three waves) we can expect another rally up to 1200 or 1300 for the rest of the year.
But, and that's what I'm expecting, if we get five waves down, we'll have to be very very careful because the next crash might be just around the corner.
While I'm clearly favouring the downside I won't dismiss another big rally in 2010; as I've said, after the first wave down I should be able to tell whether a big bear is coming or if it's just another bear trap.
Saturday, January 2, 2010
- An impulsive wave always subdivides into five waves (1-2-3-4-5).
- Wave 1 usually subdivides into an impulse or seldom into a leading diagonal.
- Wave 3 subidivides into an impulse.
- Wave 3 always moves beyond the end of wave 1.
- Wave 3 is never the shortest wave.
- Wave 5 subidivides into an impulse or an ending diagonal.
- Wave 2 subidivides into a zigzag, flat or combination.
- Wave 2 never moves beyond the start of wave 1.
- Wave 4 subidivides into a zigzag, flat, triangle or combination.
- Wave 4 never moves into the territory of wave 1.
- Wave 1, 3 or 5 is usually extended, while wave 1 is the least commonly extended wave.
- If wave 3 is extended, it’s common for subwave 3 of 3 to extend as well (the same applies for wave 1 and 5).
- Subwave 3 of 3 almost always has the steepest slope within the parent impulse.
- Wave 5 often ends when hitting a line drawn from the end of wave 1 or 3 that is parallel to a line drawn between the ends of waves 2 and 4.
- Wave 5 normally ends beyond the end of wave 3, if not it’s called a truncation.
- If wave 2 was a sharp correction, wave 4 will almost always be a sideways correction and vice versa (Alternation).
- Wave 2 is usually a zigzag or zigzag combination.
- Wave 4 is ususally a flat, triangle or combination thereof.
- Wave 4 usually ends within the price territory of the fourth wave of wave 3.
- A diagonal always subdivides into five waves (1-2-3-4-5).
- Wave 4 never moves beyond the end of wave 2.
- Wave 4 always moves into the price territory of wave 1.
- In the contracting form, wave 5 is shorter than wave 3, wave 3 than wave 1 and wave 4 than wave 2.
- A line drawn between the ends of waves 2 and 4 converges towards (in the contracting form) or diverges from (in the expanding form) a line drawn between the ends of waves 1 and 3.
- Waves 2 and 4 usually retrace 62 to 80 % of the previous wave.
Ending Diagonal (3-3-3-3-3)
- An ending diagonal is always a wave 5 of an impulse or a wave C of a zigzag or flat.
- All waves subdivide into zigzags.
- Wave 5 usually end beyond the end of wave 3 (if not it’s called truncation).
Leading Diagonal (3-3-3-3-3 or 5-3-5-3-5)
- A leading diagonal is always a wave 1 of an impulse or a wave A of a zigzag.
- Waves 2 and 4 subdivide into zigzags.
- Wave 5 ends beyond the end of wave 3.
- Waves 1, 3 and 5 are usually zigzags but can also be impulses.
- A zigzag comprises three waves (A-B-C).
- Wave A is an impulse or leading diagonal.
- Wave B can be any corrective pattern.
- Wave B never goes beyond the start of Wave A.
- Wave C is an impulse or ending diagonal.
- Waves A and C are usually impulses.
- Wave C often equals wave A and therefore ends almost always beyond the end of Wave A.
- Wave B usually retraces between 38 and 50 % of wave A
- A line drawn between the ends of waves A and C is often parallel to a line drawn between the starts of wave A and C.
- A flat comprises three waves (A-B-C).
- Wave B retraces at least 70 % of wave A.
- Wave C is an impulse or ending diagonal.
- Wave B usually retraces between 100 and 138 % of wave A.
- Wave C is usually 100 to 162 % as long as wave A.
- Wave C usually ends beyond the end of wave A.
- A triangle subdivides into five waves (A-B-C-D-E), whereof at least four of them are zigzags.
- Waves C, D and E never move beyond the end of the preceding same-directional wave.
- A line drawn between the ends of waves B and D converges with a line drawn between the ends of waves A and C.
- When wave B ends beyond the start of wave A it’s called a running triangle (about 40 % of all triangles).
- Waves C, D and E move beyond the end of the previous same-directional wave.
- A line connecting the ends of waves B and D diverges from a line drawn between the ends of waves A and C.
- Waves B, C and D usually retrace between 100 and 125 % of the previous wave.
- Combinations subdivide into two or three corrective patterns (labeled W, Y and Z) that are separated by one or two corrective patterns in the opposite direction (labeled X).
- When a zigzag or flat seems to be too small to be the entire correction, it’s likely to get a combination.