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« A Little Summer Rally | Main | The Herd Leaves the Market to the 'Bots »

Thursday, July 08, 2010

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Hockthefarm

To have a market correction of the magnitude Prechter and Dent expect (say 60%), is going to require quite a catalyst. The only thing that comes to mind for me is Japan and the good old USA.

Japan has massive debts and even though it is home grown, it is still debt.

Here in the US, another round of house price declines could push the banks into insolvency. Could the tax payers bail them out of it and not see bond prices sky rocket. I don't think so.

Let's face it, Japan and the US gubmints are still operating like the UAW did in the 1970's when they produced 85% of the cars driven in North America. And we know what happened to them. Or should have!

So huge Gubby issues in Japan or the US are a real possibility. I just don't see it happening in July or August. But 6 to 12 months....who knows.

Incidentally, I now have 78,000 miles on my Silverado crew cab (company car). It is in the shop for a new transmission (1700$) and a new rad (695$). Thank heavens for the 100,000 mile power train warranty. GM is a full on joke and they will never see a cent of my money, ever.

Hock

Hockthefarm

A little too bearish for a crash:

http://tinyurl.com/2g26nlm

Hock

Hockthefarm

Sy Harding on the death cross:

Death Cross – Meaningless.
Readers have been asking why we have not mentioned the ominous ‘death-cross’ sell signal that was triggered several days ago, which received so much publicity.

For those who have been away from TV sets for the week, the supposed ‘death-cross’ signal takes place when the S&P 500’s 50-day moving average breaks below its 200-day m.a.

The reason we have not mentioned it is that it is not among the indicators we use in our work, our research long ago revealing that it has about as much predictive relevance as tossing a coin. ‘nuff said.

Hock

Wavist

Aramis don't take it too personally it was drawn by an American - the only surprise is that we aren't all labelled Canada.

Philippine Fred

Sorry Yell I meant a running flat which would be just about complete now though yes a small push up and that takes that one out and in comes the expanded. thanks

Shanky

Magnificent report PY. Excellent summary of the lovely predicament we're in that will surely (IMO) lead to some sort of coordinated global default. Thanks for all your great work.

Roger D.

Looks like these are finished. LQD investment grade bond fund.

Weekly
http://www.screencast.com/users/parisgnome/folders/Default/media/99d422e3-81be-45ea-99cc-b87bc2a1beee
5 minute
http://www.screencast.com/users/parisgnome/folders/Default/media/f261479c-ddc5-4b17-8deb-5d89c849dfe3

JNK high yield fund
http://www.screencast.com/users/parisgnome/folders/Default/media/8abf8dee-c17c-4017-94b5-debbfb8e3abe

Roger D.

Roger D.

DG,

I know you gonna like this one,and before you say I pulled this one out of my ***, the count is saying the 3rd wave is about to start.

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/37981a83-8887-4c8a-a246-6821b516f944

Patrick

Yelnick,

Clearly you have more time on your hands as your posts continue to demand attention.

Roger D.

Some great articles on this site.

http://www.roubini.com/us-monitor/259208/the_vanishing_american_consumer_and_the_coming_trade_war

http://www.roubini.com/euro-monitor/259210/soros_on_the_crisis_and_the_euro


Also nspolar,

Your count is more likely. I just don't like the look of the 1's coming down,so I have labeled them as X's. Also now I believe most everything has topped,so this next wave down should leave no doubt about it's impulsive intent.

If I am correct even DG will turn extremely bearish.

Roger D.

Roger D.

Anyway maybe DG is right about the stucture of the waves. I like the look of this down from the top and explains to me that a major topping process has unfolded.

Right or wrong. It's extremely bearish anyway you slice it.

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/3227d13d-dabd-4f73-ac89-28f1c46785ba

DG

DG,

I know you gonna like this one,and before you say I pulled this one out of my ***, the count is saying the 3rd wave is about to start.

Roger,

Clearly you are an earnest dude and you are trying (I think), but those charts are so far outside of the realm of anything resembling e-wave it isn't funny. X-waves CAN'T be more than 1.618X the next-largest wave in the structure they follow. That's just the most egregious mistake in your chart. That chart is honestly the worst wave count I have ever seen.

I don't know where you come up with this stuff or even if you are meaning for it to be taken seriously at this point. Maybe you're just joking with us all?

My only suggestion to you is that whatever Elliott Wave materials you read to get to this point in your Elliott Wave knowledge, you should read again and make sure you understand them this time.

Roger D.

DG,

Look at the IBM chart,WMT,MCD,AAPL,AZO,JNK,LQD,on and on, The biggest mistake in elliot wave is that this entire move up or down since 2000 has all been corrective. That's the only explanation anybody that really studys the price movement can come to.

We have been in a irregular bull market since the NASDQ crash. How else can anybody explain the decreasing volume since the 2002 bottom? The wild gyrations in all indictators.

Eveybody needs to get out of the box here as the Greenspan,Bernanke put has turned any normal EWT on it's ear.

We will know if I'm right here very soon because the downside is going to take everybodys breath away. This will be wave 1 of 3 down and then wave 2, after that we will crash down or below the March '09 low.

Another way to look at it is since the my 1st X wave down we have been in the Dow average a large very weak triangular top. One down and a large corrective A,B,C,D,E top which if looked at from an open mind is a massive running correction.

This is the only way any and all of the market action makes any sense to me. Don't fault my interpretation. Thank your idiot central bank.

My simple explanation is the large banks who are responsible for most of the trading are well aware of the wedge and seeing the 5 down from the top and a abc back up panicked and put in large sell programs,crashing the market. But they stiil needed time to distribute stock in advance of the huge next bear market leg down. The price action going foward is steady selling on balance only dictated to avoid a crash until all of the stock has been sold out of their hands.

I stand by my count. But thanks for your opinion, If you agreed with me I would consider throwing in the towel,lol.

I am sincere in this.

Thanks DG,

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/c8db1aeb-5247-4708-8096-ee95464a7d4a

Roger D.

DG,

You think there isn't a impulse wave off the top. Can you have your cake and it eat too? My count can easily be a large thrust down from the wedge which would be counted as a 1,2 off the top. I can readily see that,but a 10 minute break can't really do much technical damage. In fact the selling since then has weakened the market more. The truth is there are so many different counts at the moment, I think anything is possible. As I said Elliot has been turned on it's ear since 2000.

Roger D.

MHD

Yelnick..... any opinions on the pathetic volume? It's hard to believe that stocks have risen this much on such low volume. Something is very strange indeed!

Hockthefarm

Here's how I'm going to play it.

If we crash right away (i.e. 950 doesn't hold),I'll end up watching.

But if we rally into the 3rd or 4th week of August, it would be a great time to short:

http://www.financialsense.com/contributors/cris-sheridan/chart-of-the-day-07-09-10.

Hock

DG

The truth is there are so many different counts at the moment, I think anything is possible. As I said Elliot has been turned on it's ear since 2000.

See, I don't believe that at all. The absolute foundation of ANY Elliott Wave count is adherence to the rules laid out in Mastering Elliott Wave. Neely is without a doubt the most rigorous practitioner of even "traditional" Elliott Wave and that book lays out the primary rules of that practice. Whether or not he reaches his stated goal of making Elliott completely objective and "scientific" is debatable (I think he comes closer than anyone else) but using ANY set of rules other than Neely's, even for "regular" Elliott Wave, is a waste of time and, more importantly, money.

Then, supplementing those rules with Neely's new patterns, one can account for market behavior without wild speculation about central banks, Goldman Sachs or any other of the bugaboos you (and other wavers who are consistently wrong) blame for your failures. Elliott Wave (and NeoWave) are ALL-ENCOMPASSING, meaning that if you are doing wave analysis and you are wrong, it's not because Bernanke did A,B and C or because "insiders masked their selling well", it's because your analysis was FLAWED. The central assumption of Elliott Wave is that no one can do anything in the market without it showing up on a chart. Period.

You think there isn't a impulse wave off the top.

No, there isn't. If the decline doesn't adhere to the Essential Impulse Construction rules in Chapter 5 of Mastering Elliott Wave, it's not an Impulse. I have said many times that something was not an Impulse while others, including yourself, said I was blind if I couldn't see an Impulse. Well, go back over each of those instances and I have been right each time. Since my track record is one of 100% accuracy in saying "no Impulse", why would I change my mind (or my method) now? Seems to me that the one who should be changing his mind is you. You're the one who's been wrong. You're the one who calls everything an Impulse without any specific, measurable criteria for measuring it other than your own subjective opinion that it's an Impulse. My criteria for calling a structure Impulsive isn't "does it move fast?", it's very specific Fib, time and channeling criteria that simply haven't been met by any wave of any duration for the entire past 17 months. Do you think I just was lucky for the past 17 months saying "No, that's not an Impulse"? No, it's because I use those specific rules to avoid mistakenly calling something an Impulse.

As I said a few weeks ago, you are not a "chartist" nor are you truly a "technician", so I don't know why you bother making charts and using technical terminology. You are a "fundamentalist" through and through. Which is fine, but I don't understand why you don't just stick to that, rather than get all pissed off when someone who actually has spent years reading and re-reading works on Elliott Wave (have you even read Mastering Elliott Wave once? I've read it 15 times and have it practically memorized) tells you that you don't know what you are talking about on that topic.

Anyway, I'm sure at tomorrow's close, when we don't crash, you'll update your chart to show that wave-2 REALLY is over and wave-3 is only minutes away, blah, blah, blah. I just hope that my constant criticism of your wave counts has convinced others NOT to make any trading decisions based on them.

Roger D.

DG,

Look, we agree to a certain point especially about the wave structure off the top. I think it is not in any traditional sense a classic 5 wave pattern. I know call it a x wave or a thrust down. Where we disagree is I contend it is still a bearish wave pattern. You haven't come to that conclusion just yet,but you will. Look their are some that think this is just a large yet to be completed correction,because of the 5 wave structure off the March '09 low. But in fact if they opened their eyes they would see that this is all part of a grand supercycle topping process irregular in structure. We have now ended that final wave up.

Anybody I don't care who it is Prechter,Caldero,Yelnick ect. tell me that the Valueline advance is a 5 wave structure from 1000 to 2700 and I'll change my theory.

Roger D.

Roger D.

DG,

If I'm right and we top here or the next decline will be a perfect 5 wave,3 up,down structure,unmistakable,pure elliot. No triangles in the center of the wave,just 1,2,3,4,5 down and abc up and 5 down,3up,5 down.
If not I'm finished with elliot.

Mr. Panic

Today was the solar eclipse. The last solar eclipse produced a sharp drop through options expiration week in January. This week will be 144 weeks from the October 2007 top. 144 was a very important Gann number, it being both a Fib number as well as the square of 12, 12 also being a cycle of completion/biblical cycle). July 11,12 are also 66,67 calendar days from the flash crash low...67 trading days have been important cycles since the March 2009 low....67 trading days from March 6,2009 to June 11(?)high,132-134trading days from July low to Jan high (or 66,67x2 or 27 weeks), 67 trading days from Jan 2010 high to April 26 high......55 trading days from April 26 high is July 15. 55 is a Fib number as well as an important crash date cycle in 1987,1929 (in calendar days those years).
ISEE registered a very large 247 reading on Wednesday, one of the highest readings going back to October 2007 top. In a bear market environment an important top occurred within a few days. These numbers didn't work so well in March,April or last fall in producing an immediate peak but the exuberance of the April numbers eventually resulted in a major top forming. Another thing about the 247 number was that number spiked into the close as a call buying frenzy emerged towards the end of the session which is almost the opposite in most cases for these ISEE numbers. (usually the largest reading is at the open and the number tapers of until the end of the session) Mid day readings on Wednesday were quite subdued and then spiked into the close.
The market also rallied back to the weekly TDST level (DeMark level SP 1079) last week. A sell signal was never officially triggered two weeks ago when the market did not gap down lower to open the week although it subsequently closed the following week lower. A gap down tomorrow might bring in an avalanche of sellers who are awaiting an official sell signal (and there are 18000 followers on Bloomberg ie money managers) The TDST level is based on the low of the week of Feb 17 which started a weekly sell setup. That week opened with the low of the week on a gap up open. Could we see the opposite tomorrow? It's interesting that last week closed on the high of the week. (which seems to be the case for large snapback rallies during severe bear markets) The weekly candles from the past two weeks also seem to mirror the daily candles seen at Jan top and April top.

Joetrade

Weekly NYSE advance decline line is at new record highs.

When was the last bear market with A/D line going to new highs?

Joetrade

Shouldnt the A/D line be going down? and not at all-time highs?

Joetrade

If Breadth preceeds Price then the bulls are in good shape

Joetrade

Bears do you have any explanation for this?

MHD

Joetrade......I thought volume precedes price, in which case the bulls should be very concerned that volume continues to decrease with the up days. I find it amazing that the markets moved up as much as they did last week on such low volume. Then again, very few things make sense in this market anymore other than it is rigged!

Teddy Ruxpin

TTheory Vs. Hurst Cycles

http://www.traders-talk.com/mb2/index.php?showtopic=121623

Hockthefarm

It appears that the loon is having second thoughts:

http://tinyurl.com/22uer3k

Hock

yelnick

MHD, on the low volume, take a look on step farther: the WSJ ran a short piece on how highly correlated all the S&P 500 stocks are to the moves of the index. Not normal. And nearby was a piece on how small investors had left the market. Put 2+2 together and the market is being driven by index/futures buyers only - traders - not investors. Not healthy. When the floor falls out from under a speculative trading market, it craters badly.

Hockthefarm

A great quote from Garth Turner:

"It’s a new world. Soon the definition of wealth, will be wealth.

What’s in your wallet?"

Hock

yelnick

Chab, I may post on the topic of WW2 getting us out of the GD. There is little evidence that stimulus does anything more than a temporary prop to an economy, and then it falls when the political or economic will fades. Krugman is setting up an I Told You So argument years hence that if only we had done the original planned stimulus of $1.2T not $862B we would be out of this. More would have worked, we chickened out. I actually perversely almost wish we had done everything he had asked for back then, since it still would have failed and the Keynesians would have lost their final argument.

Hockthefarm

On the Horns of a Dilemma:

The gubmint will do everything it can to get money into the hands of these folks. Think Obama's ACORN SS and Barney "well Fannie and Freddie are in great financial shape" Frank.

NEW YORK (AP) -- The credit scores of millions more Americans are sinking to new lows.

Figures provided by FICO Inc. show that 25.5 percent of consumers -- nearly 43.4 million people -- now have a credit score of 599 or below, marking them as poor risks for lenders. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

These folks would have their best chance to "get ahead in the world" in a free market economy. The gubmint on the other hand wants this group so burdened with debt that they couldn't tell you if it was day or night. The gubmint has taken great pains to ensure that housing and education are now beyond the reach of this group. Funny how when the Germans and Italians came to this country there were no handouts. It was hard work that got you things. And look how well they did. Now it is all about filling out gubmint forms.

Hock

Roger D.

ns,

Could be a historic snapshot for AZO, capping a 20+ year advance.

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/77c1cd58-046b-4a47-873e-5cb7cbf5b541

Jim

AZO (Autozone) at new all time highs? In a bear market? How can that be?

This is the most bullish bear market ever.

Roger D.

Jim actually it might have made top at 203.10

I'll post a few charts at the EOD.

MHD

Jim....people are repairing their own cars and doing their own oil changes rather than having it done at a shop for a much higher price. Car repair shops and the Autozones of the world will benefit from consumer cutbacks. Car repair shops will benefit as the consumer will opt for repairs rather than new debt via a new car. Simple as that.
Not all stocks do bad in a bear market!!!

Mr. Panic

There was a small gap down in the SP this morning thus officially triggering a weekly sell signal. But it appears that most of the other indices are still above their weekly TDST levels.
DeMark Wave also indicated an end to wave 3 or confirmed wave 2 of the new wave down from the June 18/21 highs depending on how one looks at things.
Russell 2000 is down about 1% and breadth is currently 2 to 1 negative which is unusual for a doji day. It most likely is predicting another decline into the close.

Roger D.

That could be it.


I have 5 down 3 up in AZO

Mamma Boom Boom

Should see 1083-1085 tomorrow. That may mark the top for a few days.

Roger D.

AZO

http://www.screencast.com/users/parisgnome/folders/Default/media/fb1f3629-e4e5-40c6-81da-2480d5cec86c

The Euro should top tonight and give the market a gap down tomorrow.

Roger D.

JT

"My simple explanation is the large banks who are responsible for most of the trading are well aware of the wedge and seeing the 5 down from the top and a abc back up panicked and put in large sell programs,crashing the market. But they stiil needed time to distribute stock in advance of the huge next bear market leg down. The price action going foward is steady selling on balance only dictated to avoid a crash until all of the stock has been sold out of their hands." - Roger

Your above analysis CLEARLY shows that you have no freaking idea what you are talking about. Banks couldn't give a rat's arse about Elliott Wave. Furthermore, they have CLIENTS that they are executing orders for, not the other way around.

You act as if most of the volume and price behavior in the markets is coming from the prop desks of Banks... you couldn't be more WRONG!

Have you ever sat on the equity derivatives desk of a Kidder Peabody back in the 80's? Have you ever sat on the equity derivatives desk of a Deutsche Bank in the 90's?

I have.
And you have NO clue what you are talking about.

Roger D.

JT,

Please STFU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Roger D.

The Euro

http://www.screencast.com/users/parisgnome/folders/Default/media/582d1420-bf78-4660-96e5-3339b66e9552

Roger D.

DG

The Euro should top tonight and give the market a gap down tomorrow.

Wait, when you say "tonight" do you mean tonight as in 7-13-2010 or the other 50 times you've said this EXACT SAME THING? I can count pretty high and even I've lost track of how many times you've said this.

I'd love for you to post your actual trades. Not the brokerage statements, but just the dates and entry/exit prices of your trades, so that we could see an approximation of your P&L. It's got to be butt-ugly.

You are so clueless.

Roger D.

DG don't you and JT have anything else to do? Except bitch,piss,moan and get your little laced pink thongs in a bind.

http://www.screencast.com/users/parisgnome/folders/Default/media/9c1891c7-9e01-4a99-8537-f8645cd33942

DG

DG don't you and JT have anything else to do? Except bitch,piss,moan and get your little laced pink thongs in a bind.

Such as what? Post my wave count? Already did so a couple of days ago. I'm not "bitching" at all. What the hell do you think this message board is for, if not arguing about the markets from an Elliott Wave perspective? Are we all supposed to just nod our heads and say "Good boy, Roger D!" Your counts suck, you constantly call for things that don't happen, engage in wild conspiracy theories when your prognostications fail and are generally useless for anyone trying to make actual money in the markets.

Just how do you see what you do here? As some kind of beneficial service to the rest of us? Please, by all means, post your trades so I can see what I am missing by not following the great Roger D.

I'll post every single trade I've made for the past 6 months and you post the same time period. Then we'll see who can trade and who can't.

Wavist

But as you know it doesn't work like that Yelnick. Of the funds Japan poured into its bridges to nowhere consensus now is that they led to a vestigial recovery which would have succeeded but for the stimulus being pulled too early. There's a reason economics is called the dismal science. A superlative occupation if you can get it though.

MARK HOLSCHER

DG AND JT
PERSONAL OBSERVATION----HOW CAN YOU FUNCTION ON ANY LEVEL, WHEN YOU ARE CONSUMED, WITH YOUR THOUGHTS OF WHAT RODGER D IS DOING? OH YA I GUESS YOUR GOING TO TURN COMMENTS TOWARD ME NOW BECAUSE THATS HOW YOU WORK. I MEAN THATS HOW YOU WASTE YOUR TIME!!!!!!!!!!!!!!!!!!!!!!
IF YOU DON'T HAVE ANYTHING GOOD TO SAY DON'T SAY ANYTHING AT ALL
IF YOU NEED FOOD, I WILL FEED YOU. IF YOU NEED CLOTHES, I WILL CLOTH YOU.

MARK HOLSCHER

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