Wave 4 Appears On

Good STU tonight.  Their prime count is wave 4 of (5), with a final wave 5 of (5) to lower lows, likely SP625-630.  They speculate that if wave 5 of (5) were to equal wave 1, a common relationship, this wave 4 should end around SP760 range; but this is a guesstimate at this stage.  Firmer is that wave 4 should break as a zigzag (rule of alternation - wave 2 was a flat), hence is only around half ways up so far, since we appear to be in wave b of the abc zigzag. 

They discuss whether this is instead the Obama Rally - the  wave [2] of the whole drop since Oct07, and this section would of keen interest to traders playing this rally or waiting for a lower low to come.  To support this, the count would change to a running triangle from Nov21 to Feb9, with the truncated e leg being the runup to Geithner's plan, and the severe wave 5 drop reflecting the profound disappointment in that plan.  This would place Neely's count and the STU's much closer.  Hochberg ends with a priceless rant about misuse of Fib levels in the financial press that makes this issue worth reading for that alone. 

Comments

[da bear]

how high up does wave 4 reach, for say, the Dow Jones Industrial Average?

a few weeks ago i said that a rise to 7,500 on the DJIA would mean that a larger wave rally was here (the intermediate wave 2?). Robin Landry then put that number at 7,460.

now Robin Landry thinks this is a wave 4 of 5 and could go up to 7,404 possibly.

by they way, on my message board at wal-streetweak.com i thought that the DJIA could end the week at 7,000 and possibly as high as 7,200. we'll see!

da bear

This isn't your grandfather's 1930 rally...

[Upstart]

Wave 2 of (5) lasted like 5 days, unless you think it was a running flat. If one expects a quick wave 4, why couldn't it be over today or early tomorrow at 3 or 4 days? Wave 4 in this decline situation is often quite a bit smaller than wave 2. It came close to filling the gap today, and it looks like a zigzag on the short-term chart. What am I missing guys?

[yelnick]

da bear, the equivalent target in the dow is 7300-7400

[dlu]

ewi's Running triangle count looks much probable than
their prime count.

[yelnick]

dlu, the triangle it fits the odd historical moment we are in, with huge hope placed in Obama and lots of expectations that he could never meet - hence the huge swings of the triangle and the puncturing of his hope balloon when Geithner laid an egg. Unfortunately for the wave count, the prime count fits almost all major indexes, whereas the triangle count fits very few.

[da bear]

thanks yelnick for the heads up.

the last two days this week should be important.

da bear

[dlu]

Thanks Yelnick. Perhaps you have American and Europian indices in your mind. I was thinking about Asian and emerging markets. If Dow has only a small wave left to finish on the downside,then many of emerging
markets will even miss their october lows by a wide margin. For example India, Brasil,Taiwan etc. I have a feeling that these markets can not break down on their
own. These markets will require some real downside from Dow and other developed markets to break oct. lows and complete the wave counts.

[Genesis]

My 90-day target (from this morning's opening index averages) on the DJIA is -41%, S&P is -40%, NAZ is -49%. We should find the "bottom" in equities before July 1.

In the same timeframe, Au at +423%, Ag at +1,862%.

If you haven't done so already, you fella's should seriously consider storing 3-4 months worth of canned foods and water. Things could get ugly...

*Nothing I wrote in this posting should be considered trading advice. These comments were written for entertainment purposes only. All investors should conduct there own due dilligence before making any investment decisions*

[NG]

I thought it was interesting that Neely got stopped by two times on emini S&P recently.

Is he back on long emini S&P?

[Yves]

Genesis , thanks for sharing your target.We seem to be on the same page.I did not label the last A wave down but if my count is accurate the doors are about to open wide and down hard we go .The set up is similar to October. We are about to find out next week.

Yves

[DG]

NG,

Yes, Neely is back long on all time frames and looking for 800 ES. That trade is already 30 to 50 points in profit.

From the high on February 9th, his trades have made anywhere from 33 to 120 points, not including his current open positions, depending on timeframe.

[Canadian Money]

SP500 (A different view)

I see a possible 4 of 3 in play in the form of what Elliott called an irregular cw. A quick look confirmed that an irregular may also be "in play" at this time for the DJIA, DJTI and Nasdaq as well.

If valid, the current rally will end on a five count and short term weakness to be expected following the irregular.

The important short term consideration is that we should be on the lookout for the possibility of the current rally ending, possibly soon, on a five count.

As always...only one of the market's options but it seems to fit well.

CM

[Genesis]

The rules have changed again. As of three minutes ago, I reversed course, and am 100% long on U.S. equities. Targets for the three major indeces are +200% over the next 18-months. Au & Ag, +200% or more.

I am not able to share my T.A. with you at this time.

[Canadian Money]

Yves

My short term wave count with an irregular cw fits nicely with your expectation of short term weakness.

CM

[Yves]

CM , you mean big short term weakness and yes your irregular seems correct.I have been trying to remove the fluctuating greenback out of the equation.What I come up is a 1-2, 1-2 wave count with this leg finishing wave 2.The dreaded 3 of 3 of A is ahead.This technique uses filtering to see something that we dont.So staying short is a must if you are already.If we accelerate down big , you will see a major reshuffling of wave counts as we get all the time anyways.

Yves

[Luis]

I prepare myself to short financial sector with FAZ. Let's go

[Genesis]

The bull is back.

[Eventhorizon]

Oh no genesis - now I have to sell my canned goods?

[Genesis]

No, eat them, Dummy.

[Harry]

Genesis are you serious? Your calls have been very bold and, not surprisingly, cruddy. But if you are right about the bull and gold I'll be impressed! Best to you.

[Genesis]

I'm pretty sure that second Genesis is not the first.

[DG]

That third Genesis was me, just testing something out.

[DG]

Obviously, better user identification would be a plus, but typepad is free, so can't expect much.

[Robert Murdoch]

I am a novice when it comes to Elliott Wave Theory.

When wave (5) of 5 is concluded, will it be the end of wave (A)down?

[usdollar]

You did not miss a thing upstart, that is where I am too. Turndate tomorrow march 13. What these hotshots missed looking at weekly (close) chart again, djia , is that this is a wave (4)of 3.5 down, wave 5 down in the end of the year (Oktober November), forget a smoking wave 2 up, that happened last year. I am expecting a wave 4 flat or similar from beginning of april or earlier from much lower levels.

[Forkoholic Serge]

What? Nobody issued a Crash Alert for Friday 13th?

[yelnick]

Robert Murdoch, the nomenclature can get confusing. The current wave count of Bob Prechter is that we ended the bull market in 2000, and are in a large ABC correction down. Wave A went to 2002, wave B went to 2007, and we are in wave C. He expects wave C to break into 5 big waves, designated with [brackets], and we are only in wave [1] of C down. That wave [1] is breaking into five waves, designated with (parens). Within wave [1], we are in wave (5). Wave (5) is also breaking into 5 subwaves, designated with numbers. Within wave (5), we appear to be in wave 4, with a wave 5 to follow. So when 5 of (5) ends, wave [1] of C will have ended. Prechter then expects a pretty good rally as wave [2] of C, which will break in 3 waves; followed by another horrific wave down, wave [3] of C, which will break in 5 waves.

[da bear]

it looks like the 7,300 to 7,400 level on the DJIA that you mentioned yelnick will be very key.

da bear

[Genesis]

Pathogenesis...this is not me...i am only a test

[Genesis]

If I cannot maintain my identity, my integrity, my good name, then I shall be forced to abandon this site or change my name to something that no one will suspect is me, like Benesis or Genesass, or Melvin T. Korthauer or something.

And no one will have any idea that it is I who is predicting that gold will quadruple today.

[Fester R. Macgillicuddy]

I expect gold to quintuple after 10 am this morning. I suggest you buy lots of powdered milk and cans of tuna. If you can buy tuna in gold cans you should.

[Auric Goldfinger]

Fester,

How much do you think a bottle of Goldschlager is going to cost after today? I want to go on a bender, but I don't want to spend too much money.

Also, how much is my finger going to be worth?

[Le Chiffre]

Those last three posts made my whole week. Thanks, Fester & Auric!

[Fester R. Macgillicuddy]

Auric, let's just say if you're stupid enough to drink it, at least be smart enough to pan your poops so you don't flush away millions.

As to your second question, depends where it's been. And speaking of digits, advice for all:

Eat lots of Butterfingers and get your dentist to fill you with Au amalgams. The mouth's a great place to hide a fortune.

[Paul]

Hi People's,

New here and new to elliot wave (reading Prechter's book atm). I read an old post on this site that
Glen said 'the 2002 stock market low in the Dow and S&P will not be broken for the next 50-100 years'. when did he change his mind on this.
Thanks and I will start to contribute when I know a little more.

Regards,
Paul.

[DG]

Paul,

In 2007, when the S&P 500 made a marginal new high over the 2000 high and then retreated significantly ("significant" being a relative thing in NeoWave), Neely became open to the possibility that the 2002 low could get broken. When the rally off the October 2008 low failed to show continuation, he became more convinced of this.

[Paul]

DG thanks for this.

Great posts and contributions form everyone!

I will go back to lurking for a while now until knowledge has improved.

Cheers.

[Wavist]

A number of people are getting ready for a big drop imminently but it looks to me like the market is setting itself up for another big bounce instead.

[ChrisM]

In today's update, Neely seems to be doubting that this move will go to 800 as he expected. At least not as quickly as he originally thought.

[yelnick]

ChrisM, thanks for this. Neely is now showing a triangle over the next few months, not a sharp drop.

[DG]

Yelnick,

That triangle is the prelude to the drop. Since the second x-wave started forming, he's had that triangle there as a placeholder for the final stage of the running correction. Apres la triangle, le deluge, so to speak. You may recall that he allows for triangles at the end of complex corrective formations, unlike "traditional" E-wave. Neely calls them "non-limiting triangles". A great example of one that happened recently was the Euro's consolidation near the bottom in November, which I remember EWI was calling a triangle that would lead to a further low, but instead was a "non-limiting triangle" to end off a correction, leading to a reversal. That's the theory, anyway.

The move up did run out of steam today, but I wouldn't be ready to call it over yet. I maintain an intraday plot of the SPX and it actually might be breaking as a flat here to consolidate before another move up. The move off this morning's high was the a-wave and the slow climb in the afternoon was the b-wave. A c-wave down on Monday morning to start and then we head to 800+ as forecast. We'll see.

[Mamma Boom Boom]

>>and we are only in wave [1] of C down.<<

That's what makes a horse race.

[Hank Wernicki]

Monday's Fractal Trade Setup : Two Point Risk

http://www.elliottfractals.com/COPY_3_14_09.jpg

[Henry]

where would you sell this trade, Hank?

[JP]

"Hochberg ends with a priceless rant about misuse of Fib levels in the financial press that makes this issue worth reading for that alone"

When will he start with a priceless rant about the usless advices of EWI?

It's so easy to rant about somebody else, but don't look to your own useless advice.

[barood]

I am wondering why would Neely's triangle take few months. If this upleg from March 6 took 6 days supposing it is complete or close to complete and lets suppose it's leg A of the triangle. Let's be generous and give it extra two days like 8 days.

So lets use some approx fib timing calculations:
A = 8 days]
B = A * 0.618 = 4.94 days
C = B * 0.618 = 3.05 days
D = C * 0.618 = 1.88 days
E = D * 0.618 = 1.16 days

Total approx Fib time estimation = 11 days.

I know this is small formation time wise relative to the X wave from Jan 6 which is close to 40 days or the upleg right before this X wave from Nov 20 which is 30 days. I am relating it to the X wave/preceding upleg because it is part of the same degree corrective. I am not sure if Neely has any fib timing formula for corrective waves of the same degree.

but if we take equality with the upleg(started Nov 20) that preceeded the X wave (started Jan 6) then this triangle would take 30 days.

[DG]

barood,

In Mastering Elliott Wave, Neely talks about Fib relationships (time or price) working best on waves going in the same direction of the same degree. In a triangle, that'd be waves a,c and e. He also says in one of his Question of the Week answers that wave b of a correction is typically longer in time than wave a, with 3 times longer being about typical.

If you work out your timing math from those assumptions, you start to get closer to a month to month and a half of triangle.

I think Neely's bigger point, which turned out to be correct, was don't short that last move down as if it were going to 500 S&P. The triangle is, as I mentioned, just a placeholder for now. If it starts to look too much like a triangle, I'd be suspicious that it ends up being a triangle and doesn't end up being a diametric, which starts out looking like a triangle, but ends up with 7 segments instead of 5. That would stretch out the time even longer and could even create a false breakout to the downside (wave f going under the beginning of wave a) and a false breakout to the upside (wave g going above the top of wave a), before the mother of all drops. Now that would make for some GREAT trading, as well as fooling the pants off nearly everyone!

[barood]

DG,

thank for your answer. well thought. I wish Neely can publish a new edition of his book to cover all his new dicoveries.

[Robert Murdoch]

Based on Neely's response to his Question of the Week, he states that the marke's price low is likely to happen in the first or second quarter of 2009. He goes on to state that after that low, the S&P is expected to consolidate (possibly in a contracting triangle) for a few years without breaking 2009's low. He adds that eventually wave-C of an ongoing NEoWave Neutral Triangle will complete way above the 2009 low sometime in 2012 to 2014, at which time the multi-year, D-wave rally will begin.

This is news and runs counter to what Prechter believes and what I am gleaning from other sources I have read.

Perhaps some of the active peeps on this site could weigh in on this.

[da bear]

DJIA tried to hit 7,400 and failed. then the stock market fell off towards the end of the day. small wave 4 could be over, with a final little wave 5 down to go.

da bear