Decline is Nigh

STU notes sentiment is very bullish, as it was at the peak in Oct07. Typical of 2d wave bear rallies. The expected decline has suffered a final wave v jink up, which either ended yesterday or should tomorrow. Pattern may be a rare ending diagonal - if so a pop up tomorrow but not above SP1018 then a drop over a week, likely to SP968. USD sentiment is more bearish than at the prior low, typical of nearing an end to the downtrend. Given the inverse Dollar/Dow relationship, a pop in the Dow and a drop in the Dollar tomorrow would not surprise.

Comments

[Mike McQuaid]

The SPX waveform from March to July 8 suggests March was a reversal, confirmed by, only a 25% retracement in that waveform. The 25% retracement stands as a dominant chart feature. Thus this market can push higher. Surmounting the 1000 area after some consolidation should reveal bullishness to complement the shallow retracement.

[Puravida]

Agree - UUP in 5th of 5th down. Looking at anywhere from 22.95 to 23.03 resistance
for the turn. Wed's low just doesn't seem right.

[Tony123 ?]

Tony123/[email protected]

It is obvious that thinkingtrades.com was completely wrong about this rally during March and April and that the only time he made money was with his model portfolio.

Why does he post his record of model portfolio only, and keep deleting my postings of his wrong forcasts during those months?

Track record from 06/05/09 - 06/26/09

Time to get out of longs
April 19, 2009 at 7:54 pm
by vinaydh
View comments

The correction has begun
April 20, 2009 at 8:47 pm
by vinaydh
View comments0 Comments
The long awaited correction is finally here. I am looking for a minimum pull back to the 770-780 level.

April 30, 2009 at 9:34 pm
by vinaydh
View comments1 Comment
I am short at present

Short term top is near or is in
March 15, 2009 at 7:54 pm
by vinaydh
Market is on a mission
March 17, 2009 at 10:15 pm
by vinaydh
View comments
This market is on a mission to achieve all its upside targets quickly.
I think that the market wants to go around its 50ma at 806.

Runaway rally
March 23, 2009 at 9:56 pm
by vinaydh
View comments
This market never fails to surprise. Whatever the excuse behind the rally, it was impressive.
But I don’t think now is the time to chase this rally.

Market finally looks tired
March 29, 2009 at 5:54 pm
by vinaydh
But the longer term trend still firmly down, there is more risk to the downside.View comments

Something’s not right
March 31, 2009 at 9:07 pm
by vinaydh
I think this market may be setting up for a much steeper fall.

[?]

Tony123?,

www.thinkingtrades.com might have gotten bailed out by the Fed. Thus, all of those bad trades were sent to Maiden Lane.

Or he could have done a Lenny and kept on averaging down and then got out of the bad positions when it became profitable.

Or maybe Madoff taught him how to trade.

[Bird]

If you put 10 traders in a room, you'll get 11 different ways to trade (one guy always has to be a trouble maker). Wave analysis, or any other form of analysis, involves skill and experience and has an important role to play. But trading isn't just about the head figuring it out.

Years ago, when I was deeply in the throws of trading researching, I had a waking dream, which was kind of like a vision. It was of a hummingbird flying in the middle of bird cage, in which the bars of the cage were spaced wide enough apart that the bird could easily fly out. But the hummingbird chose to stay in the cage.

Wave analysis, geometry of markets, gann, the bars of the cage, are true. But the hummingbird chooses.

[vipul garg]

Bird , in your analogy,
the hummingbird has gone into the cage knowing it is going in and has a purpose at the back of mind.
inside the cage it has a choice always, to stay put as long the cage serves the purpose.
may be it realises that it has to be one cage or the other whether its an elliott cage or others, so whichever cage the mind accepts and which works for achieving the purpose, the hummingbird stays there.

[da bear]

the August EW Financial Forecast thought that stocks would go up and the dollar would continue lower. maybe they have changed their stance. lol

9,200 needs to hold on the DOW. gold is not down much, whatever that means...

does EWI now believe that this is THE top?

da bear

[Indian Institute of Technology Bombay,]

Indian Institute of Technology Bombay,

Vinaydh of http://thinkingtrades.com/claims he is an engineering graduate from IIT Delhi, India. He is charing subscription fees of $99/Monthly , $249/Quarterly , $799/Yearly .

Someone with tony123 nickname has been falsely advertising his tracking records.

It is obvious that thinkingtrades.com was completely wrong about this rally during March and April and that the only time he made money was with his model portfolio.

Vinaydh posted his record of model portfolio only. He kept deleting my postings of his wrong forcasts during those months, and blocked my postings.

He is violating numerous laws concerning investment advisory services. I'd like request IIT Bombay contacts him to find whether he is an graduate from the school, and advise him to stop wrongdoings.

Sincerely,

attachment:
Track record from 06/05/09 - 06/26/09

Time to get out of longs
April 19, 2009 at 7:54 pm
by vinaydh
View comments

The correction has begun
April 20, 2009 at 8:47 pm
by vinaydh
View comments0 Comments
The long awaited correction is finally here. I am looking for a minimum pull back to the 770-780 level.

April 30, 2009 at 9:34 pm
by vinaydh
View comments1 Comment
I am short at present

Short term top is near or is in
March 15, 2009 at 7:54 pm
by vinaydh
Market is on a mission
March 17, 2009 at 10:15 pm
by vinaydh
View comments
This market is on a mission to achieve all its upside targets quickly.
I think that the market wants to go around its 50ma at 806.

Runaway rally
March 23, 2009 at 9:56 pm
by vinaydh
View comments
This market never fails to surprise. Whatever the excuse behind the rally, it was impressive.
But I don’t think now is the time to chase this rally.

Market finally looks tired
March 29, 2009 at 5:54 pm
by vinaydh
But the longer term trend still firmly down, there is more risk to the downside.View comments

Something’s not right
March 31, 2009 at 9:07 pm
by vinaydh
I think this market may be setting up for a much steeper fall.

[da bear]

taking another look at UUP i am not so sure that wave 5 down is over with. the wave 4 triangle didn't really break down until it fell from $23.50 to $23 just recently. so maybe that was wave 1 of 5 down. this move today looks big but it still hasn't gotten above the downtrend channel. UUP would have to get above $23.30 or $23.35 to get above it. so maybe this is wave 2 of 5 down and it could be over soon.

looking at a chart the volume isn't high enough to look like a bottom is in.

doing a wave count from the highs from $27 and connecting waves 2 and 4 and extending it to wave 3 shows that this wave down hasn't reached the trend line yet.

also, if it is an A-B-C decline then this wave C should be 1.618 times the decline of wave A. it is not there yet... a decline of 1.618 would take UUP to $22.15 or so.

da bear

[Eventhorizon]

Does STU mean that wave 2 circle is over and wave 3 circle about to start OR that wave A of (Y) is over and wave B of (Y) is about to start (and, by implication, there is another wave C up to complete 2 circle)?

[Once bitten, trying to help others]

Neither. 2 of ii of TWO of two is about to start and A of a of (A) of *A* is about to end. In other words, we are f--ked. Buy Conquer the Crash. It is your only hope. Not because it will help you survive the inevitable abominable Destructo-Force Tidal Wave of Doom, Peril, Armageddon, and violent and weird movies that Pete Kendall has documented so brilliantly, effectively, and insightfully... but because Bobby Drechster is the only human being capable of seeing the subtle, beautiful, waves that determine the fate of human nature, the universe, nay of God himself.

Only $161.68

Isn't it gross how Prichster pretends he wrote Conquer the CRap in 2004 or 2008 or something when the fact is it came out in 1994 or 1995. The dude sucks goat balls. What a pretentious scummy jackass.

[yelnick]

Event - odds favor a wave B of the 2d zigzag over an end to wave 2 altogether

[john walker]

Yelnick,

For those of us who are wave-challenged, please clarify? (UP vs DOWN would help.)

Incidentally, how is your long(er)-term outlook, now that this rally has persisted a bit longer than expected?

Merci d'avance.

jw

[yelnick]

Long version of post -

A wave 2 almost always goes 38% of the prior drop, and normally goes 50%. You will see the press and CNBC get this wrong and look at rise off the bottom, so for example claim SP1000 is a 50% rise off the Mar6 level of 667; and I have seen ewave sites give confusing retrace levels as well. (Sometimes they use intraday levels, and sometimes closing; and sometimes are not going back to the beginning of the whole wave.) If we start from the Oct07 top a 38% retrace is SP1014 and a 50% is ~SP1125. Hence for my own view and EWI's stated view we had to get to the vicinity off SP1014 if the wave 2 count is sound.

Timing as well suggested this would take longer than Mar6 to Jun11. While timing is not as consistent as retrace levels, one would expect a correction of a 17 months move would take around 6 months.

I made a bet last Nov that we would hit Dow10K by end of August. Not a hard bet given 9 months for this wave and 50% retrace. Now that we actually bottomed in Mar, I may miss it by a few points - the 1930 rally retraced 46% - and a month or so - but then I wasn't betting real money.

Thus the odds favor a modest decline of a week or so and then a Final Surge towards Dow10k and SP1100 before this wave 2 ends.

[john walker]

Yelnick,

Thanks for your prompt reply. To pursue your points a bit: If this rally is a w2 (of 5?), then what is your current long(er)-term outlook, i.e. w3 bottoms when? And w5...?

My query is directed towards time, not price.

jw

[john walker]

p.s. Of even more interest (at least, to me): where does your current US$ outlook fit into your (stock) market outlook? (Many thanks!)

[Forkoholic Serge]

Signup for a Free Week at EWF Club starting August 17th, 2009 http://forkoholic.com/tinc?key=zigfyfAE

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[yelnick]

Johnwalker- first, sorry about the typos in the long comment - I am on a road trip sans PC and am doing this on an android phone.

On the USD, pretty clearly it is nearing a major bottom. Wave count (5 thrust down after triangle, always the penultimate form, sentiment massively negative) and both neely (last I read his view on the euro, over a week ago) & prechter agree. Nasty Treasury auctions - 5 yr was a flop and it appears Fed directly bought in 7 yr to avoid a debacle. More of that to come. As this spreads we paradoxically get back to USD as hedge against risk. USD is now in the carry trade like the Yen so any move off the bottom should be sharp short covering.

Time of wave 3 if that is what is next is earliest late 2010 or into 2011. Wave 4 meanders into 2012 election and wave 5 heads south to 2014 end.

Alt count is not a 2 but an X. View Mar6 as ending a flat off 2000 and now we are in an X until the next 3 wave down. X most likely goes at least into summer 2010, the real Summer of Disillusion with Obama. Breaks as a 3 so we would be in the A of probably a flat, then a B down into late 2009 or early 2010 that could go below Mar6, followed by a C into summer 2010 - likely a fairly strong 5 wave move.

Other alt count is a triangle off 2000 and we are in leg c. That has to break as a 3 waver. Probably means A of leg c ended in Nov and we are in a B wave since, a similar count to the wave 4 camp. Problem is that this final wave of that B should be a 5 since the B wave of leg c is most like a flat. Instead the wave off mar6 is an ugly overlapping sucker. If a large triangle leg c will not go much lower, but otherwise timing is like the prior alt count.

[Glenn Loser Neely]

I am a loser
And after one week of vacation... I have no clue of what the market is
doing..
my last 3 calls have been wrong...
I am a loser!!

[GLN]

Where have you been?

[Tom CZ]

GUYS!

if you look to SPX as endning its first down phase november 2008 (it was also real local low for tighter market like Nasdaq) as Neely now does, then we reached some interesting turn points this week. According to time we traveled 61.8% of previous down move. This correction move fits like expanded flat. The optimal c of B target sits around 1018 which STU notes and is not so far from here. We are getting again above 80% bulls according to DSI. So short against say 925 for "C" down start?

Tom CZ

[Tom CZ]

sry short against 1025? ;o)

Tom CZ

[john walker]

Thank you, Yelnick !

[Bird]

My impression, after being burned more repeatedly, as if I were an ignoramus, is that the markets get to geometrically, or harmonically or elliottishtrically significant turning points and then turn, proving that the markets are actually highly ordered. But...not infrequently, the turn is short-lived, the market fakes you out (not that you are important or anything) and then goes on to the NEXT geometrically/harmonically/wavey appropropriate spot, and (isn't it amazing) the market turns EXACTLY THERE! this time big time, only I'm still licking my sores from the last time so miss it and have some 'splainin' to do to my wife, who has been saying, derisively for that last 15 years or so, that its all just gambling (implying that I am a moron, which is something I myself have been concerned about), which makes me inwardly wince and gnash my teeth. Still, when it turns when I WANT IT TO and I decide to not worry and be happy, its a beautiful thing and I thank God I'm alive.

[Puravida]

I got one of those, too!

[Mike McQuaid]

SPX, DJI, NDX, XLF, $TRAN all show a similar pattern: March low reversal, bull flag March to July, breakout to today. So the bull flag was wave 1 and 2 off the March reversal which puts us into wave 3 whose height will rival wave 1.

[JS]

breakout to today

you call that breakout?
didn't you make fun of elliott waves?

[Mike McQuaid]

BKX, Bank Index, has resistance at 45.40 the Jan. high. The trend says this resistance should get dominated, while a parade of chart features confirms the wave 3 count. BKX shows the same pattern as the handful of other averages off the March low.

[Alan]

Mike McQuaid you have been spot on!

How high do you see this wave 3 going?

[Mike McQuaid]

SPX using a fib projection technique off the March low places the golden mean at 1136 while the next common level goes to 1425 which matches May '08 resistance. It's still early to say definitively where wave 3 will end. These levels should be reached in time. This chart pattern is well formed with distinct features, so for this rally to get derailed equivalent or superior chart features would have to develop and in my opinion are unlikely. So current positions may be held with appropriate stops for protection. This is a position trade chart, meaning months holding the positions. The hardest part is fixing appropiate stops or perhaps subdividing the position trade into swing trades.
This is a sweet rally, it is a "King Maker."

[da bear]

anyone remember that BusinessWeek cover a few months ago that said "DOW 10,000 Or Bust."

heck, we may get both! lol

da bear

[teaf]

how can this rally be a 2? is the S&P going to -1000.....

we are doing 3s up and down - we are in a long (10-20 year) nightmarish correction - we are not going to zero

[Neely the Guru]

NEoWave simply crap. By Neely the Guru.

In 2000, Neely changed the name of his research and advisory firm to NEoWave Institute to differentiate his scientific Wave analysis technology from orthodox, subjective Elliott Wave analysis, which is frequently nebulous, inaccurate, and constantly fluid.

Aliso Viejo, CA (PRWEB) June 16, 2009 -- Glenn Neely, founder of NEoWave Institute and prominent Elliott Wave analyst, today announces a startling prediction: The S&P 500 is forming a major top in June, which will be followed by a large decline, eventually pushing the stock market to record lows for the decade.

"Technically speaking, according to NEoWave a correction began at last October's low; the March-June rally is the final leg of that correction," Neely explains. "The March-June rally is now ending, allowing the bear market to resume. During the next six months, the S&P will decline 50% or more, breaking well below 500!" Currently, the S&P is hovering around 917.

Glenn Neely is providing this information not as a specific trade recommendation but as a general public service announcement. A prominent Elliott Wave analyst, Neely was recently recognized in Timer Digest's May issue as the #1 stock market timer for the past 12 months.

[sherman McCoy]

when do you throw in the towel and revise your count? Transports have a full on Dow Theory "BUY" that a reasonable person would say means "S&P MUCH MUCH higher".

Can you say "5th wave extension?"

How 'bout a comment on the obvious 4th wave triangle in GLD?

[Bird]

Does it really matter if Neely, or Prechter, or Thinking Trades gets it right? Predictions are thrown out not just by these guys, but also by everyone else. It is almost impossible to know who or what to trust. If this keeps up I almost feel I'll be forced to think for myself.

There are a lot of experienced traders here. Has anyone known someone who REALLY KNEW?

There have been many times when I thought I knew.

If its about good management, that seems fairly rational. But then why aren't all the rational scientific intellectual types gazillionaires?

Something is still missing.

[sherman McCoy]

Great post Bird!

Most people know they don't know and invest passively with hope for great buy/hold gains. Those that think they can beat the market with help from a "service" like Precheter/McNeely/etc. spend a lot of money to get bad advice. They continue to do it because they need a "crutch" rather than have to blame themselves when the advice inevitably goes awry. What they should be doing is focusing more on their losses, because by definition, they don't "know" if they have even a tiny loss.

I've been doing this 25 years full time, and have had clarity of thought exactly three times. But if you have the stomach to go all in, that's all you need. Danny Ocean said it best(paraphrased). "Bet all the time and the house eventually cleans you out. Bet once, and bet big is the only way to quit a winner."

Right now, there are some definite opportunities that I have improving clarity on. But they are not in the S&P. Too much buy side noise, and too much leveraged capital to get a clear picture, IMHO.

[Mamma Boom Boom]

For those of you who care about the fundamentals, I have put together a collage of todays news in abbreviated for. After reading these snippets you may think twice about that buy and hold strategy your broker has been touting. Click on them, there all pertinent.

http://www.bushongbusiness.com/webbbs/

Have a good weekend.

[DG]

They continue to do it because they need a "crutch" rather than have to blame themselves when the advice inevitably goes awry.

I don't doubt that there are a large group of people in this situation. Funnily enough, on the Neely subscriber blog, the conversation has been more about fixing the problem (i.e., trying to find the right wave count) than "blaming" anyone for anything. I haven't been trading for 25 years, but nearly 17 years and I have come across dozens of different methods for trading and Neely's is the one that felt the most right for me and is the one I would make up on my own if I were making up a method, since it is that tight of a fit with the way my mind works. Many of the people commenting on the Neely blog have extremely wide-ranging knowledge of different forms of analysis, yet, in the end, they seem to be at least partially "faithful" to Neely. At least that's how I see it, but I don't pretend to be able to speak for anyone else, unlike you. Saying that it's a "crutch" is like saying that Einstein's Theory of Relativity is a "crutch" for physicists or Pasteur's Theory of Germs is a "crutch" for doctors. The idea that you can generalize and say that everyone needs a "crutch" to be able to blame someone when something goes wrong is incredibly small-minded.

[DG]

Posted by: Bird | Friday, August 07, 2009 at 12:20 PM

Bird,

As a thought experiment, let's say I came to you tomorrow and said, "I am going to tell you about a guy who will get the right 'big picture' forecast about 80% of the time, so that if you ONLY trade when he makes a 'big picture' call, you'll get 80 winners out of 100 trades", would you be interested, even though that obviously meant he'd be wrong 20% of the time? Well, that's Neely's track record over the past 3 1/2 years. I mean, come on, no one is perfect, and you can't possibly tell me you'd take 50/50 "coin toss" odds over 80/20 odds in your favor.

[Sherman McCoy]

DG-

Well well well, Mr DG, I didn't know you wanted to be part of the discussion! Since you are a self admitted dependant of market services, It appears that your primary skill set is limited to disparaging others. Have I offended you, or are you just intimidated by those that do there own homework and pull their own trigger? 17 years is long enough to know that you can't be dependent on others for advice and make any real money. What do you do when Neely dies, quit investing?

I have my own models, make my own decisions, and have been doing so since I was first entrusted with others assets. If I ever told a client I used a "service" no matter how profitable, he'd laugh me right out of the office. I'm glad Neely is your genie in the bottle and it works for you, I just think your "neediness" is a weakness. Just one man's opinion.

[DG]

17 years is long enough to know that you can't be dependent on others for advice and make any real money.

Is that what you tell your clients when they ask why they should invest their money with you? Isn't believing that and taking their money a breach of fiduciary duty and contrary to the ethics component of your licensing?

Have I offended you, or are you just intimidated by those that do there own homework and pull their own trigger?

Why would I be offended? To be offended, I'd have to hold your opinion in some regard. Since I don't, no offense taken.

It's funny that on a blog devoted to Elliott Wave, a method that has lived on beyond the lifetime of its creator, some posters seem distinctly incapable of separating "method" from "person". In the strictest sense, if Neely had passed away years ago and I discovered his work after his death, it would not really change that much about how I use his methods. I hope he lives as long as he wants to and keeps on putting out his services, but if he decides to quit tomorrow, I've still got the method and I use it in my trading every day that I trade, whether Neely recommends trades or not. In that sense, the "method" is now (almost, I've got a lot to learn still) just as much "mine" as it is Neely's. I know that's odd in a business where everyone likes to squirrel away their "secrets" into "black boxes", but Neely's always been open about what he's doing and how he does his analysis.