A Top of Sorts is Near

Today was my turn date, which means a top this week.This might be it, or just an interim stop before we get back to the Sp1150-75 area. Turn dates are chancy things, and it appears to me that we have more upside, in part because I think we get back to Sp1150 before falling, and also because I expect the Dollar to reverse at about the same time. It has retraced 57% of the rise in the Dollar Index, and should be expected to go a bit farther, to the 62% area, before bouncing.

The stock top and Dollar bottom may resolve this week. Friday has the unemployment report, and it will be watched for guidance on the economy after the mixed GDP report last Friday (which is likely to be revised down from 2.4% to 1.7% given poor news on durables Monday). The STU thinks after the 8:30a pronouncement, market sentiment may break, beginning the fall.

As you might expect, the STU thinks the top is nigh based on wave structure. This chart excerpted from Daneric shows the recent pattern: a triangle fourth wave and the fifth wave thrust out of it. The thrust has gone back to 62% retrace in the Dow, but is below that in the S&P. A thrust the width of the triangle is normal, and targets near 1140, which is the 62% retrace given a bottom at the low point (1011 on Jul2).

In my Big Tease count, and the STU count, the low point is May25 at 1040, giving a target of 1151. Look for a thrust to 1140-1150 range in the next two days.

The STU also comments that each move up since Jul2 has broken in five waves, meaning they do not see this as a triangle formation, nor an ending diagonal, with one exception: the Nasdaq had a clear overlap of waves 2 and 4, and has fallen behind the Dow and S&P, compressing into a fairly clear wedge.

The bullish view is best expressed by Carl Futia, who brings out the Three Peaks and a Dome formation. The next two charts show the formation and the current count of Carl. The implication is very bullish: the market should now run up above Sp1200. This gives a good contrast over the next two days: an impulse up that crushes through the 1140-1150 level supports the bullish case, while a sharp thrust that stops in that zone supports the near-term top view. 

   

 
 

Comments

[yelnick]

Dave, on the USD, it seems to need to get to the 62% retrace in the DX, which is the about the lower number from EWFF (79.50)

[Dave]

Thanks Yelnick.

[Whitebear]

@Yelnick,

How to address the concern that A/D has gone to an all-time high, which does not lend credence to the projection the rally since 2009 March has ended.

[Bird]

Yelnick, in this particular methodology, each swing circles to the next (N) or next next (NN) turning point, using expanding concentric circles measured from both the ends of the base measuring swing. So there are a number of possible lock-outs. What I look for, in particular, are swings in which the N turn did not lock, because then the NN must lock, limiting the possibilities. In this particular case, the time nearest to Aug 4th was Aug 2, but 2 days late blows the time frame. The next mark is Aug 16-17th or so.

Where I probably would differ from Zoran is that I think this approach applies to every swing, independent of wave count. In fact it virtually ALWAYS applies "backwards" (meaning that swings confirm that they are complete by "circling back" to major highs or lows--again the issue is only false positives). But it is a ubiquitous dance of every swing, in time, price and diagonally.

[Whitebear]

Ok. I have done more finding on the A/D issue and the result isn't as rosy as trader123 predicted it to be.

http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&st=2000-01-01&en=2003-01-01&id=p14584011203

Here is the A/D for the NYSE from 2000 till 2003. Notice how A/D continued making higher highs and lows and you all know how the DOW or S&P fared during the period.

[Roger D.]

"This is another Monster Day containing a T-square with Mars opp. Jupiter, both square Pluto. Massive power struggles."

Arch Crawford comments on August 3rd.

The RUT and VLE topped on the 3rd and the Dow on the 4th.

Roger D.

[Whitebear]

Here is another A/D for the Nasdaq from 2007-2009
http://stockcharts.com/h-sc/ui?s=$NAUD&p=D&st=2006-01-01&en=2009-01-01&id=p90204879163

Nasdaq actually made higher high in Oct 2007 while the A/D also made a higher high. And you all know what happened afterwards.

[Whitebear]

Also, how do you make of the current Nasdaq A/D?

http://stockcharts.com/h-sc/ui?s=$NAUD&p=D&yr=3&mn=0&dy=0&id=p30305822931

[JT]

Roger,

With regards to Arch Crawford's "Cardinal Climax"... you keep looking for absurdities to "fit" in with your BEARISH bias.

As a result, you are about as transparent as a $2 whore.

Better keep your Day job, cause you couldn't trade your way out of a paper-bag my friend.

[V.R. Chamratta]

Roger, how does the A/D line square will falling prices? And could you elaborate on the ES chart? Thank you for your work. Best wishes,
V.R. Chamratta

[yelnick]

Bird, take a look at the Feb5 bottom - the bifurcation occurred several trading days later (when a thurs up breaks out of the congestion around the bottom). Then look at the apr26 top - again the bifurcation took about a week to break below the congestion around the top. It may be the N is slightly less, and points to aug6 when the current bifurcation just occurred.

BTW today does not confirm a break down. Go check out EvilSpeculator today.

[yelnick]

Whitebear, in a thrust out of a triangle, the A/D should spike up. What may now happen is a topping process before the bifurcation down. Aug4 may mark an interim top, and we may be entering a wave 4 before the final wave 5 up to 1150 area. A lot depends on whether the current down move sustains. I look for the break down that confirms the change of trend, not the momentary top. A break of 1088 would be telling.

[Wave Rust]

2 things -

1. In Barry Bagahammers' administration, truthtelling is grounds for losing your job.

Orzag 'quits", and now, Roemer "quits" today.

who's next?

2. Today's ECRI WLI update:

NEW YORK, Aug 6 (Reuters) - A measure of future U.S.
economic growth rose to a six-week high in the latest week, but
held at a level that suggests the recovery will remain
sluggish, a research group said on Friday. The Economic Cycle Research Institute, a New York-based
independent forecasting group, said its Weekly Leading Index
rose to 121.8 in the week ended July 30 from 121.0 the previous
week, originally reported at 121.1. That was the highest level since June 18, when it stood at
122.3. The index's annualized growth rate rose to minus 10.3
percent from minus 10.7 percent a week earlier. That was the
highest since July 9, when it stood at minus 9.8 percent. "After being essentially flat since late June following a
two-month plunge, the WLI has now risen to a six-week high, but
a more sustained downturn in the WLI would certainly heighten
recession risks." said Lakshman Achuthan, managing director of
ECRI.

wave rust

short into fomc

[Roger D.]

Will the FED dissapoint next week?

MCD

http://www.screencast.com/users/parisgnome/folders/Default/media/53ebda28-ece1-4517-87ab-294aed76d467

Roger D.

[Roger's Dad]

No Son... it is YOU who are most DISAPPOINTING.

[Les]

Also, how do you make of the current Nasdaq A/D?

http://stockcharts.com/h-sc/ui?s=$NAUD&p=D&yr=3&mn=0&dy=0&id=p30305822931

There's no divergence of any kind. It's true of the SPX A/D also.

You can plot the index behind the cumulative A/D using the lower indicator panel by selecting the Price indicator and $COMPQ.

Bonds are rallying because the banks are buying up the treasuries.

[Roger D.]

"No Son... it is YOU who are most DISAPPOINTING."

Like I've said before dad GFY!

All you bulls are going to get reamed,because out of nowhere,when it's least expected,this markets going to be down the limit,one morning.

[Michael]

Roger,

Take a look at Arch Coal (ACI) or Cliffs (CLF) or Freeport Copper (FCX) or Walter Energy (WLT) and let me know if those Daily Charts look bearish to you.

[DG]

Roger,

Take a look at Arch Coal (ACI) or Cliffs (CLF) or Freeport Copper (FCX) or Walter Energy (WLT) and let me know if those Daily Charts look bearish to you.

Of course they will "look bearish" to Roger, because he doesn't read charts according to some objective methodology, he reads what he wants to see into them.

Of course, that violates every single rule of trading, but I think we all realize by now that Roger isn't trading, he's an attention whore and "talking about trading" is just his way of getting attention. No one could possibly stand to be wrong as many time as he's been and stay with it, unless, like Prechter, they are getting paid to prognosticate, not trade.

[Les]

The strength is in commodities, chemicals, transports, industrial machinery, and utilities.

There are also a lot of weak industry groups elsewhere.

Defense/Aerospace, Banks, Finance, Homebuilders, Healthcare, Retail, and Semiconductors & Semiconductor Equipment.

[labelsfools]

DG is a fool trades on subjective labels. He thinks FCX is bullish. The 200MA is trending down and he is bullish. What a fool.
http://stockcharts.com/h-sc/ui?s=FCX&p=D&b=5&g=0&id=p84205965305

[DG]

I didn't say what I thought of FCX because I don't think anything of it. I said what Roger would say about it.

I've had one losing month this year, so whatever I'm doing, it's clearly working.

[BullandBear]

"DG is a fool trades on subjective labels. He thinks FCX is bullish. The 200MA is trending down and he is bullish. What a fool."

http://stockcharts.com/h-sc/ui?s=FCX&p=D&b=5&g=0&id=p84205965305

Actually, it is YOU that is the FOOL my friend!

Leave it to you to say that a chart like FCX which took out the May, June, and July highs is not BULLISH, just because of a "flat" 200-day MA that the majority of successful traders don't give a rat's ass about. I suggest looking at the 10, 21 and 40 day MA. Duh.

Congratulations!

By emphasizing an MA that is virtually meaningless, you completely MISSED a 25 point move. You must be a genius!

[Perigee]

@Yelnick,

How to address the concern that A/D has gone to an all-time high, which does not lend credence to the projection the rally since 2009 March has ended

Like all mathematical averages or equations, i think one needs to understand what goes into them before determining whether it is actually telling you something or merely suits the purpose of the day.

Why not use the common stock A-D line where it only utilises companies who actualy operate - perhaps because the picture on this one isn't as supportive of the bullish case. Whitebear also provides some compelling evidence that like all indicators they work some of the time but not all work all of the time.

The old latin phrase "Caveat Emptor" comes to mind here!

[Hank Wernicki]

Parent Iteration

Market is going to Dive tomorrow !!!

eom

[Mr. Panic]

Today is 08-09-10. Last year, an intermediate bottom was made on 07-08-09. Saturday was 666 calendar days from financial crisis orthodox low of October 10,2008. Tomorrow is 360 trading days from March 2009 low and 66 trading days from May 6 flash crash day. August 6 was also the one year anniversay of the lunar eclipse following the solar eclipse of economic destructions, Saros 136(136=???Bosh,Wade,Lebron?), when the Shanghai market topped out. Also, August 6,7 is the crux of the Cardinal Climax, although the Bradley date is tomorrow (and all the Bradley dates have been destroyed this year).
Transports and $XOI are continuing to mimic the April high fractals (and Jan highs to an extent). $VIX was up nearly 2% with the up close and on the 60 min it appears to have tagged and dropped below the lower Bollinger Band while the MACD historogram bars appear to be reversing. Oil is the key market to watch since materials have been the leading sector in this rally and helped to propell the Dow to greater extent than the other indices. CVX looks like it put in a final high on a exhaustion gap up doji. It really all comes to the Euro and if it has reversed down. The Euro made its technical ramp back to the point of its collapse in the late April ledge area (ala the larger fractal of the stock market from Sept 2008 collapse to March 2009 low and rally back to the pre-collapse ledge in Sept. 2008)