Bears Pushed to the Edge

Scan some of the bearish sites and you will see shock and dismay at today's rally above the 1130 resistance level. As they topple and capitulate, it is almost time to call the top. Fractal Finance is being stressed, as it needs this break above to come back below 1130 by the end of the week, but my timing of the autumnal equinox (Sep23) is looking plausible for that top call. 

The nested 1-2 count of EWI is blown, and they have a new count: a double correction, which they describe in their tutorial (free) in lesson 5.1. The implication is this is wave C of a zigzag off Jul2, and while the STU gives other targets and a deeper analysis, typically the C leg of a zigzag goes the same as A, which in this case is 1011 to 1129, so it should go from 1040 to the 1158 range (say, from 1151, the Jan top, to 1174, an interim top in the Flash Crash).

Fractal Finance is now 4-0 over orthodox wave theory, but before it can notch the last win, this needs to turn into a false break. Neely, lying in the weeds all summer long, is comfortably in his prediction of this rally, but curiously is urging readers to stay out as he doubts the staying power. Even the bullish Carl Futia sees the market as still overbought. Midday today he expected churn around 1127 before a run to 1174. 

Comments

[Molecool]

Just want to point it that this Elliottician has been looking up for a while now. So, it's not EWT that loses to the fractals, it's EWI.

[Dsquare]

Neely may be looking for a terminal impulse for c to show itself to end this wave therefore he may be nervous as to how high wave i of c will go.

[MT]

The Greek bears pretended to sail away, and the Trojan bulls pulled the Horse into their city ...

A matter of day's.

[upstart]

Posssible upward B-wave of a larger triangle that will last the rest of the year, as I had been guessing. And unless it's a running triangle the April high will not be exceeded until 2011, as I said back in May.

[Account Deleted]

Dow Jones futures before opening bell

[Mamma Boom Boom]

Exactly one week ago I tried to warn all you bears:

>I don't expect much of a pause, here. I think we're about to light the wick.

Posted by: Mamma Boom Boom | Tuesday, September 14, 2010 at 12:19 PM<

Your friend,

Neo-Mamma

[Mamma Boom Boom]

>The nested 1-2 count of EWI is blown, and they have a new count:<

No shit! I'm appalled!

[ROLF]

Yelnick, Is Neely still touting this count? If so, 1048.50 would be the top.

What if this drop is a "3", meaning corrective? How bullish is that?

* Neely counts these waves as a double flat (abc - x - abc), and he anticipates a rally. He was calling for the turn of the month to be the turn of the waves, and he (so far) got it spot on. His count has the whole drop off Apr26 as a larger B wave, and he now thinks we are beginning wave C back up. Wave A began last Feb5 and went from 1045 to 1220; wave C starting at 1040 would go to 1150 if the C wave equaled 62% of A (a normal relationship); or to new highs if C = A.

[JT]

So much time and effort devoted to playing the LOSERS game of "Pick the Top" . . . and yet you didn't have to be a rocket-scientist to target 1150 given the classical technical "measured-move".

After 12 straight months of blown EWI and STU calls, and perma-bears getting crushed left and right, if these amateurs say that they are still putting short positions on preparing for the next monumental decline (P3) they are LYING through their teeth.

These guys have no money left in their account.
They are all "paper-traders" now.

[Anikitos]

JT, if no bears are left.. This logically follows that only bulls are left. Makes no sense, I think there are many more are sitting on sidelines. Quiet.

[Chuang Tzu]

For contrarians

Recession Declared Over! and Dow Theorist believes buy signal is imminent

http://www.marketwatch.com/story/us-stocks-rally-on-end-of-recession-call-2010-09-20?reflink=MW_news_stmp

(precisely at Neely C-wave .618 area - bulls may want to be cautious here)

[JT]

We have just seen the greatest Corporate stock BUY BACK period for any January to September period since 2000, and more than double the total for 2009 at $258 BILLION. But hey, Prechter and Hochberg know Corporate America much better than the actual management teams.....

[Chuang Tzu]

Watch September 30th for Gann Vibration top

http://www.mclarenreport.net.au/articles/articles/242/1/September-17-2010-CNBC-Europe-Report/Page1.html

[yelnick]

ROLF, that is his count, with a couple of nuances:
- second flat truncated (held above 1011)
- the C wave will be a "5", and the peak around 1150 is wave 1 of C

[yelnick]

JT, EWI called a top around Jan, and were right; and then right before the April high, and were right; and they have been cautious initiating the big short all summer. You may be responding to the ewave sites blown calls more than EWI's. The calls Prechter blew were his 200% short calls in 2009, which would not have hurt him much presuming he had stops, as this market has not gone very far off its levels of last November in ten months.

[ROLF]

These guys have no money left in their account.
They are all "paper-traders" now.
==================
JT, you may want to rethink that statement. If you are long, where are you long from? S&P is up 2% for the year. I'm short from 1125, essentially down 1%. Oh, you've been long from 666! Loser!

[George]

Yelnick,

Most EWave sites have been in bearish mode on their primary counts for quite some time now. Few are offering even moderately bullish counts, let alone the big bullish count that the last 10 years is a simple A-B-C with a 5 wave coming to the upside for the next few years. The 15-odd EWave sites I look at seem to mirror what is published @ EWI. So; the question I ask you is twofold: 1. Have you noticed a negative correlation between subsequent market action and general consensus amongst EWave sites (In other words is fading the EWave sites while they are in agreement worth a look)? and, 2. Do the Ewave sites stay close to the ideas in Gainesville or do they sometimes diverge significantly.

Disclosure: I am bearish as hell here and think people that think this inanity continues for another 3-6 years are smoking something I'd like to try.

George

[Mamma Boom Boom]

'Big Up Day', Tomorrow????

Subscribe to my newsletter and find out. It's only $10,000 per month, the best investment you'll ever make. It can be placed on your HELOC. (gik....gik)

Neo-Mamma

[yelnick]

George, it is a great pair of questions.

1) does fading EWI make sense? Well, if the market is 80% bullish and EWI is bearish, it makes sense to fade not because of EWI but because of the bullish time bias of the market. I suppose a case can be made that when EWI makes a dramatic call, you can see some market participants fade it (ie to squeeze the EWI followers in their short position), but the market dwarfs the ewave world & the ewavers can become too convinced of their own importance. I have seen EWI make good calls and the market follow it, such as right before the Mar 2009 bottom and right before the April 2010 top. 

2) do the ewave sites track EWI or diverge? Most of the sites I scan try to vary from the EWI count. For example, some end the flash crash at 1011 in July, with some form of leading diagonal, a wave structure EWI soundly rejected. They may converge with EWI at times or in small degrees, but they seem to flop around with how they count the whole period since April. They also seem too impatient, as if they do not grasp the timescale of EWI's P3, so they make bold predictions of deep drops and get frustrated when it doesn't come. If you buy the EWI count, P1 took about 17 months and P2 took about 14 months. Is P3 going to retrace all of P2 and more in just a few months? It might take until 2014 to complete, depending how low it goes. 

As to the simple ABC count, be wary. The last four waves took 16-18 years each, and this is of that scale at least. Hence it should be expected to be corrective into 2017 or thereabouts. So far it has been a sideways correction, not a sharp and deep drop, and on that alone one could question a deep P3. Instead this may resolve as a large triangle or double flat, with the Hope Rally as the X wave. 

If you see the current waves as corrective - an AB so far off April - the X wave may have more to go before the second corrective pattern. That would fit an election rally into 2012 followed by four or five bad years. Or, if we double-dip, a seasonal rally from Nov to May 2011, and then the next wave down starts. 

[Hockthefarm]

Yelnick:

I've been having a problems loading you site quickly. Started at the end of August.

Any particlular reason, or is it all on my side?

Thanks,
Hock

[JT]

"JT, you may want to rethink that statement. If you are long, where are you long from? S&P is up 2% for the year. I'm short from 1125, essentially down 1%. Oh, you've been long from 666! Loser!" - Rolf

With a comment like that, you're obviously an INVESTOR and not a TRADER. There's a big difference.

[JT]

"The calls Prechter blew were his 200% short calls in 2009, which would not have hurt him much presuming he had stops, as this market has not gone very far off its levels of last November in ten months." - Yelnick

Prechter went 50% short the first week of August of 2009 at roughly SPX 1000. He added another 50% around 1038 SPX for an average 100% short position at 1019 SPX.

Correct me if I am wrong, but I don't believe that he ever covered that short position. It was also a HUGE opportunity cost having not been LONG during that time frame.

Let's face it...

Prechter is a newsletter writer.
He is not a TRADER.

[Pete]

Prechter is a religious leader of a doomsday cult, would you ask your clergy for investment advice? LOL!

[Pete]

Lets just hope the Church of EWI doesnt lead to mass suicides LOL

http://en.wikipedia.org/wiki/Doomsday_cult

[yelnick]

Hock, no idea. Let me shorten the number of prior pages that loads and it should help.

[yelnick]

JT, you really think that just because you are the only TRADER in the whole Universe that Prechter never covered his 200% short bets?