Backtest this week

Whne a trendline gets breahced, the market typicaly comes back to test it from below. Will it kiss it goodbye, or show the break to be a False Break?  Chart courtesy SlopeofHope:

Comments

[dlu]

Daneric had posted the same wedge on his site and suspected a backtest after the breakdown.

[dale d dale]

whenever people start talking the "final thrust up" they are top picking and usually wrong about the trend.

i remember when prechter said june 2005 was the "final thrust up" based on massive fibonacci agreement but the dow kept on chugging another 3000-4000 points higher.

i bet the dow does another 4000 points on the upside from here before the next 4 year cycle low hits

[Tom Green]

Why does it seems that most people who like Elliott
wave are bears.

Why do these people seem to always be scared of calamity and downside but never seem to be optimistic about market upside.

[Virgil]

Tom, it only seems that way because Prechter is the self annointed capo di tutti capi of the Elliott Cosca, and he's only on TV when he's bearish.

Let me let you in on a little secret just between you and me...
he's slowly turning bullish and leaving open the possibility (slight mind you, but still possible) that the March '09 low is going to stick.

[Tom Green]

I do remember Prechter once saying that 2016 was his final Kondratieff line in the sand.

He said after 2016, he can no longer find any cyclical reasons to be bearish and will be forced to become bullish.

Anyone else besides me remember him saying that? I believe he said it in a 2006 interview.

I do agree with his 2016 date as it is a fibonacci 5, 8, 13, 21, and 34 years from major important lows.

[Hockthefarm]

Virgil:

I don't think Prechter's organization could survive if he suddenly became long term bullish. Too many doom and gloom books and articles for that. He is right or he is finished in my book.

Interesting that Tim Wood appears open to the possibility that this is not a cyclical bull move in a secular bear:

http://www.safehaven.com/article/27863/a-brief-dow-theory-update

I don't follow him too closely (just the free stuff I happen to run across), but this is the first time I've heard him say "On the other hand..........."

H

[KRG]

Could USA sell part of its gold reserves to come out of its debt problems? This can simultaneously explain seemingly opposite themes such as Asset deflation along with a forced rise in yields because of the lower "credit" standing of USA such an action would cause

ON Pretcher, one line in the sand I remember is when he said that he will change his view on gold if it crosses $400

[Virgil]

reason.com/blog/2012/10/14/stock-market-analyst-robert-prechter-o

You guys be the judge.
He's talking about buying not selling and mulling retirement. His guy in Asia (who is their best analyst) is 3rd wave bullish on China. His metals guy has a buy on Alcoa. His forex guy is bullish on the Aussie dollar.

Personally, I think this downturn is the real deal but the Mar 09 lows won't be taken out.

[yelnick]

KRG, we would more likely issue gld backed bonds and hold e gold.  The bonds could be at a huge increase in gold price, such as $10k/oz, and be used to retire fiat debt.

[Hockthefarm]

Virgil:

Well if Prechter is a bull, he sure hasn't told anyone at the STU. That was a very bearish monthly that they put out yesterday.

But I'm with you on the 2009 lows. I'm sure not playing my hand with the notion of Dow 1000. That said, things could always change, and I'll be careful until Q4 of 2014. And that date is so far away right now that it will probably change.

So first up is Laundry's T-Theory next Spring. I'll probably put the 401k to sleep in Mar/April. Nice MacD call by Sy Harding in his seasonal account. The DIA has ripped ever since.

Holiday best wishes to all,
Hock

[MT]

Hi Tom,

In bull- and bear markets only the happy few is on the right side. The so called technicians like Prechter and the blog sphere influence continuously the decision of the players by clouding their thoughts. My opinion is that the most always miss the train and then hope for a trend reversal in the middle of the trend.
We had once here a person called Roger. He foresaw every week a new top and the end of the world. They are collecting the wrong info or they have no analytical skills.

[yelnick]

My suggestion is to watch the Naz and particularly AAPL for an early warning.  AAPL often fades this time of year and bounces, but the chart says it *should* fall to $400 and some are suggesting $300.  

[Virgil]

GOOG looks really bad with 5 waves down and 3 waves up

Hock, I saw STU's wave count during the free week but don't follow them normally. It didn't really make much sense to me to be honest because they were pulling out the truncated orthodox stuff. Truncation implies severe weakness and a sharp drop which we didn't really get. It just seems to me that EWI does have a lot of valuable services provided by extremely talented people, and the STU isn't one of them.

Yelnick, this onshoring trend in manufacturing is sure to repatriate greenbacks which will drive up the value of the dollar, don't you think? I saw a story that Foxconn is hoping to build a million foxbots to replace their disgruntled workforce. I try not to be cynic but I don't see them competing as well on the more complex stuff.

[yelnick]

Virgil, the ability of young women to do fine assembly in the iphone5 seems to be hitting a limit. Apple is beginning to bring it home. The logical method is via robotics now, and 3D printing in about a decade.  Take a lot at this analysis:

http://www.asymco.com/2012/12/07/the-real-threat-that-samsung-poses-to-apple/ 

This won't happen fast, though. 

[Hockthefarm]

Any audiophiles out there? Looks like our household is going full on Mac this Christmas. Macbookpro, Ipod and Ipad. Current plan is to wait for the retina version of the Imac.

Here is my question. I love music and currently handle all of my portable needs with a Sony diskman. The sound is great. I make the disks by recording songs from a sony cd barn, through a mid 1990's top end Sony ES receiver to the diskman. If I rip all my cd's through Itunes:

1. If I load a nano or Ipod classic, how will the sound quality compare with the diskman?

2. We are also looking at buying Yamaha's new A3020 receiver which is top end. If I play a cd from the cd barn through this receiver, will the quality suffer if instead I rip the cd in Itunes and then play it from a macbookpro through the same receiver?

Hard to rationalize the success of Itunes if there is much of a difference. But if there is a big difference, I'll try and talk the family out of this big change.

Thanks,
Hock

[Hockthefarm]

Correction: It is actually a Sony mini disc player/recorder not a discman.

H

[yelnick]

Choose on iTunes the high bit rate VBR recording, such as 320bps. That makes the ripping impact sound much less. 

[Hockthefarm]

Thanks Yelnick. I hope to check the sound out at a best buy later this week.
I know several people consolidating with Apple on the home front this year. Great call on the stock by the way. 300 would really be something.

H