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« Market Still Spiky, Economy Looking Weaker | Main | Yves Calls the Bond Market - the New Bond Guru? »

Thursday, October 01, 2009


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Market is acting spooky here.

Mike McQuaid

SPX trend is up. Since a lot has been made off the March reversal we're buying the dips. The rally from Sept 2 to 17 has pulled back 50% to 1033, not even to the golden mean. A fast setting RSI daily under our favorite threshold has been a good guide.

Blessed Ben

Yes, a fast setting RSI daily under our favorite threshold has been an excellent navigator of these seemingly treacherous but, in truth, quite friendly waters.

If the rally from 9/2 to 9/17 had pulled back to the golden mean I might reconsider my view but it has only pulled back by half.

Prishna, you probably think the market is acting spooky because it has dropped today but this is a buy and hold market, my friend.

I wish all of you luck as we watch the waves unfold in all their ineluctable majesty as related by the eternal wisdom of the sequence 0, 1, 1, 2, 3, 5, 8, 13... as first established by Ralph Elliott and expounded and codified by his acolyte Robert Prechter and made whole by Glenn Neely as noted by the astute followers of Truth on this forum.

Thank you.

Mamma Boom Boom

Yelnick, I think once a few support levels are taken out, it will come fast, and furious. The market is dominated by professionals, they still remember last year, and they want no part of it again.

Timewave Zero

Web Bots and Timewaves are predicting collapse of the U.S. Dollar for November 4, 2009

Watch this


if this is a 4th wave what was 3? it looks to me more like a 2 of 3 of 3 or 1-2 1-2 right as Mike says into the .618 and 50 day ma round 1025

if you are a money manager you are likely underperforming the market, if you sell here where will you put your cash? corporate bonds? they are more expensive than stocks. treasuries? they are more expensive (long bond outperformed stocks since the 8/15 auction) than corporate bonds? commodities? if you sell it is because you think deflation so why would you buy commodities... imo pros are net buyers of stocks into the end of the year and probably until Mar 2010 - even ABC should go to 1230ish

Erasmus B. Dragon

This will be a good test of whether Yelnick is a contrary indicator at major tops. In late 2007, big on the Tech Market Resurgance, or some such name. Unfortunately, he got the sign wrong. Now he sees an Obama Hope Rally with positive vibes everywhere. Both strike me as long on feelings and short on facts. There will be vibes in the next few months, but the data suggests it will be negative. But I welcome the forecast. I'm always looking for reliable contrary indicators. I'll have to track this one.


Relax people, tops take time to exhaust themselves. Don't go looking for "signs" when none exist.

The You Tube links were pathetic and if this blog is a reliable contrary indicator Yelnick should charge a hefty admission.

At least Guido seems to have silenced that douchebag Doroteo. One less irritant to put up with.

Take a deep breathe, relax, observe closely and leave the emotions outside the door or you will make some pretty stupid mistakes.

None of us our going to catch the top except by luck. It's more profitable to keep one's wits about and react after things present themselves in the real world.

Waves and fractals are guides not exact predictions of the future. The future are what we and (unfortunately) the bozos in power decide to make of it. Unless you know them personally you're going to be wrong more times than right.

Mamma Boom Boom

One of my indicators says there is a high probability of an intra-day reversal tomorrow.

But longer term, things are looking pretty shaky.

Cary Lloyd

Weird, my indicators say there is a low probability of an extra-day continuation the day after tomorrow.

Shorter term, things look incredibly stable.

Ned and I seem to be looking at the same indicators but from a different direction.



You seem to have changed your outlook on the market since June.

Above you state "it seems more likely the markets meander for the next two years rather than drop precipitously".

On June 14th you stated ..."may retest the March 6th lows around October and have a strong bounce - the final Hope Rally into the summer of 2010. Then expect another retrace of that level into late 2010. This should mark the end of the C leg of the triangle. The 2010 bottom could be around 6000"

On August 14th in response to a question, you stated ..."wave 3 concludes in late 2010 to early 2011".

You appear to be much more sanguine in your outlook since June.

Could you please elaborate on what has given rise to this?

lucky one

>None of us our going to catch the top except by luck.

I am lucky then. Are you?

Hank Wernicki

Fractal Update and Daly Review ( free )

Yes we went short on the Open today




So you are sure the top is already passed and you're currently short?

How many prior times have you done this over the past several months?

I get lucky now and then but currently still long with tight stops on half my positions. Exited the other half a couple weeks ago.

I don't feel lucky at catching the top of this rally to short it. Too much BS going on. Good luck to you.


US peso may have be in throes of another impulse after hitting a price low at 76.6, close to my 76.5 target mentioned a few posts ago.

Over here in OZ, our gold sector is about 10% off support. The rate of descent suggests its likely to test support.



Yet another intriguing post yelnick. Keep'em coming. It is quite possible we are at the crossroads of this market. Methinks we are in for a Freaky Friday...

DG- I'm told you've another site for 'Neely subs' only- I am in that camp. Is it possible to get an invite?


Taz, what is your view of the AUD over the next month?


Rob, I still hold to my scenario 3 but am not convinced the end of wave 2 is in yet (scenario 2). Scenario 2 can become scenario 3 after scenario 2 ends. Perhaps my use of 'meander' was imprecise - I see scenarios 2 and 3 as both meandering rather than collapsing. What has changed is timing - as this market extends (and in scenario 2 we might extend into Q2) the endpoint also extends out, from late 2010 into 2011. And that is not the final end as I expect another drop into 2014. I hope it is clear that I do not buy into the 1931 or 1937 analogies, since we are doing a "Full Hoover" right now and are having an impact globally on recovery of sorts. The Full Hoover will extend the collapse out farther. In this regard the 1989 analogy may be the closest fractal, albeit that too is not a perfect fit. But fractals are not the same, they are self-similar. Important difference.

A good set of analogies to an extended wave 2 (scenario 2) was posted at SafeHaven, with charts: His discussion of likely investor psychology is priceless.

His average based on history is an extension to April 6, 2010. Curiously it matches well a seasonal pattern (buy in Nov, sell in May). Perhaps we have a six week long X wave followed by a bottom in Nov that leads to a five month final zigzag, one that starts strong as zigzags do and then does a slow roll to a top. This may get as far up as the 62% retrace in the Dow and S&P. I wouldn't be surprised if the Nazi lags in this third zigzag (but I would be disappointed since a lot is riding on a re-opening of the IPO market here in VC-land).

bob m


One of my indicators says there is a high probability of an intra-day reversal tomorrow. But longer term, things are looking pretty shaky.

I agree, (not that MY OPINION is of any value) Over the last few months, I have not trusted EITHER direction for very long.

I had great success using the USD/YEN to signal stock index moves a few months ago. I feel like that relationship is changing since the USD is now the bitch currency.

How do you see the relationship between the USD/YEN, gold and equities working as we come out of these past few months? How do ANY of you see the relationships re-alining?


Hey punchout,

Sure, what's your e-mail address?


Hey Yelnick

The new carry trade is making life tough for me technically-speaking.

Our dollar seems to be much stronger than the candian loonie, even though both economies are pretty much similar.

If the aussie broke down through 84.5/85 versus the US$ I would imagine that is all she wrote but above that level I have to be bullish depsite waning momentum.

Our materials index (BHP and RIO etc) is back on their recent lows sporting what appears like some sort of zig zag perhaps. I think they will set up a head and shoulders pattern before finally subcuming to their own weight. I would have suspected our dollar to act in parellel or to lead the commodities but they do not appear to be doing so.

My best count here in OZ is an expaned triangle as B given that this recent leg (since July) is much greater in comparison to the previous move (off the March low) in contrast to what has played out in the US. Ideally we would better our current high by another 1-2% to make the current leg greater than the March rally on log scale accordign to Neely guidelines.

Perhaps our dollar is hinting at this??



Ok, so the market isn't open yet, and the ES is not considerered a major index, but I'm watching a fast break of the lower trendline from last March.

Aren't fast breaks of big trendline's one of the absolute requirement for trend change?

This all feels very different. Down days followed by down days followed by down days. There was snow on the ground the last time the market felt like this to me.

William Voorhies

Best free post on the web.


For now, a downside target near 102 SPY is the conservative view of what could be happening. If we go back above yesterday afternoon's high, what I think is going on isn't.

Posted by: DG | Thursday, October 01, 2009 at 07:12 AM

Downside target on SPY reached pre-market.

I'm now thinking a 75% chance the high is in, but I do not rule out another one/two day run to retest it next week.

So, to recap for the slower-witted in the audience:

On the day of the Fed meeting, I had the target price within 8 cents on the SPY.

Wednesday intraday, I called the reversal within 5 cents on my blog.

Downside target of 102 met within a day of making the call in real-time.


Doroteo, I'll probably go have a nice $3,000 dinner this weekend with the money I made. Thanks for giving me the idea.

Mamma Boom Boom

>>How do you see the relationship between the USD/YEN, gold and equities working as we come out of these past few months? How do ANY of you see the relationships re-alining?<<

bob m , I don't really pay much attention to relationships. I only study individual technicals. Later today I will be updating my stuff. Will post.

Mamma Boom Boom

>>One of my indicators says there is a high probability of an intra-day reversal tomorrow.

Posted by: Ned Bushong | Thursday, October 01, 2009 at 01:42 PM<<

This appears to be it.


Aussie's looking awfully corrective for this to be a final top...


One thing has been cleared up today - Neely has formally recanted.



In the response to my query above you provided a link to safehaven. I refer to that website all the time.

However, the link doesn't work for me.

Who is the author of the blog and when did it appear?

Thank you



I had the same thing happen. There's an unnecessary period at the end of Yelnick's link. Copy/paste the URL into a browser without the period and it should work.

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