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« Yves Says Bonds May Be Calling a Top | Main | The Zoran Project »

Tuesday, October 20, 2009

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wave watch

According to T Theory - next downside projection should hit center post low of second bull market T which is around 880 on the S+P into November...

Click here for the MP3 commentary:
http://ttheory.typepad.com/files/tto20091018b.mp3

Mamma Boom Boom

According to N Theory, it's too early to say. But, the market has been running on less and less fumes for a long time. That story yesterday that TA no longer works, made my face lite up.

Michael

Yelnick - I take issue with anyone's claim that Prechter is only down about 50 points at the moment on his call to go short back in August.

The fact of the matter is that Prechter issued his August newsletter 2-weeks early (for timing purposes) on August 5th and recommended an initial short-position for those traders with risk capital. At that time, the SPX was right around 1000.

Furthermore, if anyone has been short the energy, mining, drilling, coal, and natural gas sectors of the equity market since August, they've been completely crushed!

Back to trading.
:)


Account Deleted

Prechter is not a trader. He is an analyst and intellectual.

Generally traders are more interested in riding the trend, while analysts are more interested in calling the turns.

So really by their professional calling, analysts are almost always early in their calls. For them, it is always better to be too early than to be too late. As a trader, you will have use analysts as a reference, but stick to your own rules when it comes to trading with your own money.

Mamma Boom Boom

Posted Aug 11, 2009 11:52am EDT

In late February, Robert Prechter of Elliott Wave International said "cover your shorts," and predicted a sharp rally that would take the S&P into the 1000 to 1100 range.

With that prediction having come to pass, Prechter is now saying investors should "step aside" from long positions, and speculators should "start looking at the short side."

"The big question is whether the rally is over," Prechter says, suggesting "countertrend moves can be tricky" to predict. But the veteran market watcher is "quite sure the next wave down is going to be larger than what we've already experienced," and take major averages well below their March 2009 lows.

Yes, the late 2007-early 2009 market debacle was just a warm-up to what Prechter believes will be the bear market's main attraction. In this regard, he says the current cycle will echo past post-bubble periods such as America in the 1930s and England in the 1720s, after the bursting of the South Sea bubble.

Account Deleted

Ned:

Good to know you also follow Prechter. :)

Btw, the drop today looks corrective in nature, so a top is probably not in yet. Overall, the market is taking its sweet time to round out a nice top. This is most obvious when you look at NDX chart, as it leads the other indexes:

http://stockcharts.com/charts/gallery.html?$NDX

Here, you can see we have roughly carved out the left half of the rounding top. It will take several more days to carve out the right half. Generally, stock indexes don't spike up to form a "needle" top very often. They tend to carve out rounded tops, as Prechter says tops are made by the emotion of Hope, which is a fuzzy and "rounded" feeling.

Michael

Jing,

You'll have no argument from me that Prechter is NOT A TRADER. He's 50% short from August 5th via EWT and 100% short after his additional call on August 28th.

In his October EWT he highlights this and says that S&P futures were trading at 1005 and 1038 respectively; thereby giving him an average price of 1021.

Something tells me that he hasn't taken into consideration the "roll" from the Sept. contract into Dec.

:)

twitter.com/Frac_Man

In the October EWT Bob illustrates the 29 fractal and the current 09 fractal for the end of wave 2 and the begnning of wave 3 down

I had discussed the "same identical fractal" with Ike Iossif a month earlier in September

Bob will be right .... and the crowd will be wrong ......

Hank Wernicki

min

Jing;

How long have you been an EWI subscriber?

min

Normally, enthusiastic support for Bob's preffered count would cause me to do the opposite —in this case relax stops on my 7½ month old NDX longs.

Unfortunately, my "M Theory" shows potential for a market turn between Oct 18, 2009 to February 2010. Unfortunately, as "N Theory" mentioned earlier, it's too early to tell how big/small a turn.

Since Bob is an intellectual he could be off in his timing by months to years so does anyone know what Hochner is STUing at this point?

it would becorrection or an from Oct 18th - Feb 2010.

min

Please diregard the LAST line of the previous post

yelnick

min, the STU thinks the action will subdivide up a bit - see my post from last night.

Account Deleted

Hi, min:

I was EWI subscriber in 2004 and 2005, but quit when I saw they were hell bent on interpreting every market move as a precusor for a major bear market. I always believe that one should "to thyself, be true" (don't kid yourself).

Still, I learned enough from EWI that I sold everything in October 2007, when I saw Investors Intelligence bullish reading hit record high. Later on, I tried to do some bargain hunting and got hurt by the falling knife. :)

Prechter is a very talented, outspoken and controversial figure, and there is a lot of strong opinions about him out there. As I get old, I tend to become more tolerant of other people's (and my own) flaws and shortcomings, and more grateful for their contributions.

And I appreciate your pointing out the NDX leadership. It is always good to share and learn. :)

Account Deleted

Hi, min:

I may be the odd one here, as I keep talking (to myself maybe?) about A/D lines, while no one else seems to care. :)

Naz A/D line is breaking down really badly now, while Amex A/D line is breaking down mildly, and NYSE A/D is flattening out and weakening. See below:

http://stockcharts.com/scripts/php/candleglance.php?$NYAD,$NYHL,$NAAD,$NAHL,$AMAD,$AMHL

As you said before, NDX and Naz lead the market. If you are long NDX and seeing Naz A/D line diverging and quite simply breaking down, while NDX is hovering at the top, you know what that means. This is really Technical Analysis 101 stuff.

:)

Michael

Jing -

I would suggest that your disappointing experience as a 2004-2005 EWI subscriber was very similar to mine when I was a subscriber back in 1993.

I came to the EXACT same conclusion that you did . . .that Bob Prechter and his camp were hell bent on interpreting every market move as a precursor for a major bear market.

Most of the Elliott Wave bloggers that I have come across on the Internet seem to fall into this same "Perma-Bear" camp . . . "fitting" various technical indicators to their own BIAS while totally ignoring one's like the NYSE Cummulative A/D line that were clearly supportive of the Bull case.

:)

Account Deleted

Michael:

Thanks for sharing your experience. It is very interesting to see the same stories playing out across so many years. :)

Regarding NYSE Cummulative A/D line, yes I know I have the same sin. I saw it and hated it. I didn't want to see it again, tried to remove it from my mind, but it kept coming back and haunting me. Eventually I decided to take it and use it to my trading advantage.

It is interesting that when you have to trade to make a profit, instead of having to write to share your thoughts, suddenly you are more honest, open and friendly with reality. :)

Prechter just needs to trade once in a while to be a better analyst. :)

Michael

Jing:

I couldn't AGREE with you more.

Mr. Market teaches some pretty good "lessons".
The problem is . . . that most people have great difficulty LISTENING to Mr. Market.

:)

Account Deleted

Yeah - sometimes our supposed "pride" is more important than anything else.

:)

Michael Locker

You can think of the herd as focusing on a particular guru. Roubini was the guru of 2008. Prechter had his 15 minutes in 1987. Try to become familiar with peripheral economists and market watchers and picture them on the front page. If you can do it, you might want to start taking positions based on their models.

min

Thanks Yelnick;

I should take time to read everything right? My schedule has been whack this last week or so.

Hochner thinks it will subdivide higher?...hmmm... I hate it when we coincide, it has been cake going counter his top count.

Will tighten my stops. If he's/I'm right, it shouldn't matter. If the usual turns out to be true I'll be getting out a bit higher than I would otherwise —can't lose.

min

Michael, Jing, Michael L. same conclusions here sad to say.

Are you aware there are 2 distinct EWI websites? Yes and often times they have opposing outlooks on the same markets for similar time frames.

Never understood any legitimate reasoning for this and was very disillusioned with EWI after repeated queries with no real answers from anyone there.

Jing regarding A/D line, I've noticed that too. Based on past experiences this could go on for a while but it's definitely a good clue I've learned to take seriously, it's one of the indicators that helped me pull off an awesome 2008 and a pretty decent 2009 so far.

A few other things are missing for me though. Close to a long term top I'm used to seeing DOW and SPX make new highs with NDX and sometimes NAZ failing to do so. Also use to seeing more 52 week lows compared to highs than current levels.

What do you think?

yelnick

min, the classic play here is to wait for the break of the 2-4 trendline, in this case the 0-X line that touches Mar9 to Jul8. Running around Sp1045 today and growing at 2 pts a day. Or, once that break occurs, wait for the wave 2 bounce back and short there. trying to short before the top is a Vegas play.

Account Deleted

min:

I am not sure if this is the final top, but it should be an intermediate-level top at least. (I guess secretly I hope this is the final top)

In my opinion, the market is tired but not crappy tired yet. So there is a good chance we will see a correction and then a new high in select indexes, with the kind of divergences you talked about. Kind of like July - October 2007 setup.

So even if we top out here, bears should not be too carried away. It is not necessarily the start of P3.

teaf

anyone notice that today the market leading NDX hit the .618 retrace of the whole bear market? now if we are topping in some 2 wave as many bears suggest the NDX should be rolling over hard or at least start to lag. now the action looks corrective off that .618 which tells me it probably breaks thru, telling me its not retracing the bear market but in a new bull market...

twt

Account Deleted

"Last chance,last chance,last chance......"
"Final Top,top,top,top is close............."
"Wave this,wave that, wave here,wave there.."

Has not being here due to attention to turbulence in Malaysia for weeks, but I kept wondering why many here prefer endless convoluted talks or twists or excuses --instead of plain figures(index/$) and timing, let the market bear it out, let everybody judge, right or wrong,black or white,turn or no turn,crash or no crash. All gurus and high priests in America should come straight to the point(index/$),as they say put the index/date(money) where your mouth is....otherwise the much feared "Chinese Curse" may overrun soon

I also wonder whether my subscriptions to all the Waves-Megazines is worth the $...

P/s : My own quick assessment :Timing out my 3 Tdays(omitting the 3 days retracement to 9500)otherwise the last 11 Trading days ( posted as Sept 24 to October 10) come pretty close especially peak of 10,119.47 vs my Oct 10 10164.
What's yours?

Current Index from yahoo finance:

Index Value: 10,074.13
Trade Time: 1:37PM ET
Change: Up 32.65 (0.33%)
Prev Close: 10,041.48
Open: 10,038.84
Day's Range: 10,010.87 - 10,119.47
52wk Range: 6,440.08 - 10,157.30
--------------------------------------------
Dow Jones Industrial Average(DJI: ^DJI)
Index Value: 9,718.40
Trade Time: 3:22pm ET
Change: 30.15 (0.31%)
Prev Close: 9,748.55
Open: 9,749.99
Day's Range: 9,666.03 - 9,805.39
52wk Range: 6,440.08 - 11,218.50
----------------------------------------------
Sorry for error on the dates

ChuanWave: Dow's Closings

Sept 24 9778 -- 9768
Sept 25 9878 -- 9867
Sept 28 9912 -- 9900
Sept 29 9895
Sept 30 10087
Oct 01 10047
)ct 02 9968
Oct 05 9974
Oct 08 10066
Oct 09 10043
Oct 10 10164

Posted by: chuan | Thursday, September 24, 2009 at 12:41 PM
---------------------------------------------
i like chuan's matter of fact kind of post.

i never knew that dow closing was forecastable to such precision.

nevertheless, everyone deserves fair attempt especially when they post real time/in advance.

Posted by: vipul garg | Thursday, September 24, 2009 at 12:39 PM


Cary:

Does Elvis live?

Posted by: min | Thursday, September 24, 2009 at 01:07 PM

What's a Chuan wave? Is that a Chinese Elliott wave or something?

Posted by: min | Thursday, September 24, 2009 at 01:08 PM

Account Deleted

Guys, look at the key reversal patterns forming right now, on a lot of indexes, with 20 minutes left before the close.

http://stockcharts.com/charts/gallery.html?$DJIA

This is esp. interesting as we made a one-year high in the morning.

min

Well I'm stopped out of my NDX positions at morning low. Looking for SPX/DOW to make new highs unconfirmed by NAZ/NDX. If this takes place the trusty Hochner contrary play still works.

Yelnick:
>>trying to short before the top is a Vegas play.<<

I TOTALLY AGREE

Jing:

>>see a correction and then a new high in select indexes, with the kind of divergences you talked about. Kind of like July - October 2007 setup.<<

THAT'S WHAT WE CAN HOPE FOR BUT AM FLEXIBE AND OPEN TO OTHER POSSIBILITIES.

Michael Locker

This market is toast. By that I mean hot, buttery toast whose aroma will waft up just as the Dow, Nasdaq, S and P, and bonds will continue to rise. The economy is recovering, sanity is returning, and The US is as safe as anything. Where are you going to put your money? Japan?? Look at their national debt!

I trust Obama and Geithner. Hochner, not so much.

twitter.com/Frac_Man

http://www.elliottfractals.com/

min

>>This market is toast. By that I mean hot, buttery toast whose aroma will waft up just as the Dow, Nasdaq, S and P, and bonds will continue to rise<<

Michael L.;

Curious. Why close 2/3rds of your long positions on October 14th then?

I'm not a Hochner fan either by the way.


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