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Trade Trends with Bollonger Bands and Twiggs Money Flow

Archive through August 25, 2010

Chart Forum » Hilarius' Hall Of Fame » Elliott Wave Watching » Archive through August 25, 2010

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rdumas
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Post Number: 3815
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Thursday, August 19, 2010 - 09:00 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey Bill,

Would you believe that I have never tasted a MacDonald's hamburger? I don't mind their chicken nuggets with their spicey chilli sauce and just love their french fries. I probably sample that stuff about once every 6 months.

Lobster we keep for special occasions when we want a real treat.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Friday, August 20, 2010 - 07:26 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Definition of prescient

prescient - perceiving the significance of events before they occur

==========================================================
Post 3813

Hi Bill,

As you say the SPX could either head straight down tonight and not breach that 1100.14 level or it could thrust through it to complete a final leg. It cannot be determined by EW analysis. Either scenario is valid. We will just have to see what happens. Which ever way it plays out, we will know that we're in a wave 3 when it starts because they don't stuff around.

As a matter of fact the likelihood of the wave 3 starting tonight probably increased dramatically because I pulled out of GOLD today.

=========================================================

New Years Resolution: When trading ETF GOLD in future, ride the larger cycles instead of being a smart ar..e trying to ride each little wave.

Anyway Bill, at least by tempting fate that way I probably initiated the start of wave circle iii.







I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, August 20, 2010 - 08:02 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Come-on Rudy , we need to be more doom crying and self-congratulatory toadying....get with the programme!

Before I deal with your bad habits, a very big 'self-congratulatory toadying' thanks for being the instigator for Wave 3 last night on Pollyanna. Someone had to push her off the slippery dip, and I can always count on your trading skills to give her a big push.

What a pity we here on EWW have so little logic, consistency and objectivity, and believe in the stars, planets and Elliot Waves (and tea leaves) to keep us from seeing the truth.....

.......But hold on, we got it right...

Things went from boring yesterday on the SPX to exciting today as the SPX wiped out most the gains made from the previous three days, all in a few short hours taking out the pieces of support it had built along the way.

The SPX is once again below all the major Moving Averages on both the daily, and weekly charts, with first resistance now coming from the 50 day MA at 1089.37, all on strong sell volume. The SPX did have one more of those really bearish days that help set trends with 91.42% of the total volume coming from the bears. GO THE BEARS!

With a bit of wildly excited 'doom crying', we should hit 1010 in a matter of days. Were doomed, were doomed!!

One more piece of 'self-congratulatory toadying' thanks, (I'm in the mood) thanks for the POG work - but next time can you just trade the entire rally mate, and stop mucking about...


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rdumas
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Friday, August 20, 2010 - 08:04 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



S&P500 overnight price action

In yesterday's post 3805 I indicated that the price action for the previous night created a doubt about whether the existing EW count that I had on that index was correct. This was brought about by the fact that the index had almost reached the termination level of my previously labelled wave circle ii. Had that level been surpassed, it would have invalidated the previous count. Refer to previously posted chart below which showed the implications of breaching the previously labelled wave circle ii.




Last night's price action on the S&P500 has now erased that doubt with a probability of 99%. We always have to allow for a black swan event which is why I haven't given it a 100% probability. Hence, the previous EW count that I have had on the pattern for some time now remains valid. The current status of the count is shown below.




Note that I have labelled the current level as wave iv?. This is because we cannot be sure at present whether the corrective wave will remain a simple abc pattern. Until that is determined we need to leave the actual label as unresolved. Note that for this count to remain valid, the index cannot go above the termination point of wave i which appears to be around the 1086 level. If it did it would mean that wave iii was subdividing. This would in no way affect the ongoing creation of wave iii but in fact would worsen the case of the bulls as it would mean that wave iii would increase in range.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Post Number: 3818
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Friday, August 20, 2010 - 08:19 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

You are a screech mate but spot on with the 'mucking around' bit. I have had a bad habit of doing that at times and it has proven to be a bad strategy on most occasions. Some people are slow learners.

Are you still concerned about the $1238 level on the POG?


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, August 20, 2010 - 08:42 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



We know what happens to POG when the Central Banks say it's time for a 'short'! Perhaps a 'Double Top' might be even better than a 'Head & Shoulders' for Uncle Sam messing with the Gold Bulls.

POG had a run towards $1238 last night before the 'shorts' kicked in...so I am still wary that the Central Banks will keep a strong resistance at that level.

However, your Count looks solid, so I'll hang in for your $1260 target. I just hope that the bottom of Wave C on XJO/$AUD coincides with the top for POG...


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rdumas
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Friday, August 20, 2010 - 08:55 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Flat patterns are not that accurate in picking exact levels. All they indicate is that the A, B and C levels will be approximately equal. Don't forget that there are 3 different types of Flat patterns. If it's an Expanding Flat we could even get to my original longer term level of around $1325.

There is no EW rule that suggests that we will get to the $1265.05 level but that was the last known overhead resistance level so that makes it a sensible target.

As an aside regarding the price action on the SPX........ this is the very first time since I started studying Elliott Wave analysis where a wave 2 retracement got within 1.37 points of the origin of a wave 1. That is taking brinksmanship to the extreme.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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market_mad
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Friday, August 20, 2010 - 09:31 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi all,

Looks like Wednesday might have been the interim top in our market after all. This 3rd Wave down is going to catch a lot of people out. 4200 is on the way very soon, support today comes in around 4400 which should hold for the day. However, if we trade below 4380 look out below as we'll drop another 30 points in quick time.

On the topside I can't see it trading back up through 4430.

Cheers
MM


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rdumas
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Friday, August 20, 2010 - 11:25 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi MM,

Whilst I feel quite confident about a wave circle iii being underway for the S&P500 I am not so certain about our XJO index. It is of course possible that it is in a similar pattern to that of the S&P500 however as I mentioned in my post 3809 yesterday, the pattern from the top of the XJO looked very corrective to me.

Because of the corrective nature of the pattern I still feel that the Triangle pattern that I discussed in last weekend's Market Wrap for Minor wave B is still a real possibility. Whilst it doesn't really matter for longer term traders who are shorting the market, it could create some surprises for those with a shorter trading time frame during the circle e phase if it came about.





I have looked at the move from the top for the XJO with the view of a similar count to that of the SPX and can see a possible count but have to admit that it is not overly convincing to me.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, August 20, 2010 - 12:00 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey Rudy

Re Pollyanna

Could 1099.77 be classified as the completion of circle wave ii?

That would have us completed (i) of iii @ 1070.66, with a target for (iii) of iii @ 1041.55 (equal wave length).

Previous support is at the 1040.78/1042.17/1044.50 level - so that seems a reasonable target.

Target to complete @ 1009.74 (equal wave length). Support is at 1010.91. Seems reasonable.

...what do you think?

ETF Gold

Thanks for the added piece on POG.

I see Etf Gold as still principally a ‘bear’ trade against the indices. It's the 'flight to safety' trade.

POG rallied as the US markets began to turn south at the end of July, with the Russell 2000 leading the charge. When we get to the bottom of this pattern, it might be time to take profits from Etf Gold.

However, I'll have one eye on POG, expecting some Central Bank shorting at the key overhead resistances.


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rdumas
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Friday, August 20, 2010 - 03:22 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Just came back from a wonderful seafood lunch with Helen.

Based on my posted chart 1101.14 was the termination level for wave circle ii and 1099.77 was the termination level for wave ii. The move from the low of the 6th July to the 1101.14 was an ideal 3 wave abc move so I'm not sure why you would want to look for a complex 5 wave move.

Either way however the result would be much the same as we would still be in a wave circle iii. The only way to be sure will be to see what pattern develops now.

As for your proposed termination levels, they look good to me. I also agree with your ETF GOLD comments.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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p3t3
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Friday, August 20, 2010 - 06:05 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




sway wrote on Thursday, August 19, 2010 - 11:41 am:

I can accept you offering an opinion, but when you use language which is unequivocal, I think you are making dangerous statements that could cost a lot of people real money


A little Trading 101 here.

The entry is the least important part of the trade. Most entry systems are little better than 50:50. To be a profitable trader all you need to do is ensure your winners are making at least double what the losers are giving back. After that, a couple of winners that are allowed to run to MUCH MUCH more than double the usual loser and you have a profitable system ready to go.

What I get from EW is the difference between impulsive (trending) moves and corrective (sideways) moves. If I can avoid the chop from non-trending behaviour it improves my results. EW (in the hands of a good practitioner) also gives me an alert that impulsive (trending) behaviour is becoming more likely. That is often enough to give me an edge.

I don't do EW. It just doesn't speak to me. I do listen to people for whom EW is informative. When somebody likes a particular methodology they are very likely to become good at it. When they become good at it they become worth listening to, and can provide to others insights which would otherwise be unavailable to them. Nobody will be right all the time. Nobody has to be to get to profitable trading.

Just my view, eh.
Pete


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rdumas
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Saturday, August 21, 2010 - 07:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Pete,

I couldn't agree more with the comments in your post. They are the thoughts of a successful market player. This thread was specifically formed at the request of a number of readers to focus in the main on the Elliott Wave methodology. I consider EW analysis to be a unique methodology that allows a trader/investor to get an insight into the market that is not otherwise available.

Like most other traders/investors I have studied and become comfortable with the more traditional methodologies that have been covered by excellent practitioners like Weinstein and others and explored the power of levels of support/resistance both in the horizontal plane and channels, etc. Each methodology has its limitations and it is essential in my view to provide ourselves with as many varied approaches to analysing the market as possible in order to come to a conclusion about a potential investment.

As I have often said and I'm sure you would agree, in order to maximise our understanding of the market we need to look at time, price and pattern. Elliott Wave is a pattern recognition methodology just as traditional TA has a limited number of pattern recognition systems such as H&S, Cup and Handle, Double Top, etc.

EW analysis takes it a step further and in many ways confirms some of the patterns used in traditional TA methodologies. The unfortunate thing about EW analysis is that it does require a substantial amount of effort and study to really understand it. It just simply cannot be understood at a superficial reading of the subject. Inevitably the critics of the methodology are those who after a superficial reading of the subject have come to conclusions which in the main are based on an incorrect understanding of the subject.

I don't particularly care whether people like Sway don't use the methodology as part of their tool kit of understanding the market because it is their loss. But to criticise a methodology that he doesn't have a clue about is pretty infuriating.

If readers of this thread get nothing more than a basic understanding of impulsive moves and corrective moves and behaviour of different patterns then they have gained a lot that will be of benefit to them in their trading/investment careers because it will allow them to assess when a trade is likely to be safe or risky.

I personally do not trade the market on the basis of EW analysis to the exclusion of all other methodologies. It is just one tool in my tool kit and blending the other methodologies together in order to determine a confluence between the various methodologies increases the chance of a successful trade.

Obviously when I speak with conviction it is because I have that conviction but as with all other posters, these are my views only and not the outcome of a direct communication with some God that controls the market. Most sensible people would understand that but Sway obviously didn't.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Saturday, August 21, 2010 - 03:43 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

ETF GOLD respected the short term descending trend line on Friday.




POG looks like it may have a bit more of a retrace before the next leg up. This may cause a bit of a move down in ETF GOLD unless the market drags down the AUD. To me the POG is still in a strong impulsing trend. Much will depend on whether it can hold the zone I've pointered. I still expect it to head towards the $1260~$1265 level at this stage.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Saturday, August 21, 2010 - 06:14 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hey Rudster

Thanks for Weekend Wrap

SPX

For what it is worth, I found 5 waves in wave v on the 5 minute chart. (was this just a test!!)

Even a/b corrections within in ii & iv if you get the magnifier out!





Either SPX Count options works...not far off starting iii of (iii) of circle iii....could be ugly.

Thanks for POG. Uncle Sam shorted gold twice on Friday in NY at 8.30am & 9.30am, but the Bulls have kept it going since then...


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billt
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Saturday, August 21, 2010 - 06:29 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)





Here is a better one - unlabelled!


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billt
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Saturday, August 21, 2010 - 07:01 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



As you know, I am shorting this little baby.

The US Russell 2000 Small Caps was the first indice to turn south in the recent correction, and now it is the first to break the 12 month trendline.




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rdumas
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Sunday, August 22, 2010 - 10:24 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

No, it was not a test. As I mentioned in my market wrap, if you drilled down into that wave v you might be able to see a small second wave. For that reason I have not totally discounted that EW count. I put the Triangle scenario in there as a warning that a very bearish investor "could" (not "will") be caught with their pants down heading in the wrong direction. I personally feel at this stage that it has a greater probability of coming to fruition than the more bearish scenario but that is obviously a view rather than a certainty at this stage.


Proportionality is important in EW analysis. There are no EW rules governing the time taken to complete a 4th wave but there is a guideline that suggests that it should complete in no longer time than twice the time taken to complete a third wave. Note that in your first chart that it has taken slightly longer to form the 4th wave than double the time taken to form the 3rd wave. It is really marginal in my view.

As I continue to stress, TA is the skill of analysing probabilities based on patterns. If you can clearly see a wave 4 in one time frame and you have to drill down to a smaller time frame to see a wave 2 then I believe that you are reducing the probabilities that are working in your favour.

Regarding your short of the US index, again as I said in my market wrap, the US market is more bearish at this stage than the Aussie market in terms of patterns.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Sunday, August 22, 2010 - 10:25 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Oh, by the way Bill. Congratulations in posting your first charts. A giant step forward.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Sunday, August 22, 2010 - 11:31 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

This chart may bring a smile to your dial. Note that it fits nicely with the next leg of a Triangle pattern as well as the early part of your more bearish scenario too.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Sunday, August 22, 2010 - 07:56 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



SPX - the week ahead

It does look like the SPX will rally higher to test out the 50% Fibo level within wave (ii) at the 1082 level early in the week, with a potential test of the declining trendline. Most indicators are pointing to an early rally on Monday.

Wave (iii) of 3 will then be upon us, and on equal wave length we should crash through the key support of 1056, and onto the 1027 level.

Wave (iv) to retest the 1056 level, then onto 1010 to complete Wave 3.

It is looking like a negative week on the SPX.




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rdumas
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Monday, August 23, 2010 - 08:02 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

I think your EW call is quite likely based on the Bollinger Bands and Percent R indicators at present. The Percent R appears to indicate that we may first have our "b" down from here before moving up to the top of the BB near the 1080 level in the "c" portion of this "abc" corrective move.






Often the retrace of a corrective wave following an impulse wave will go somewhere within the price range of the 4th wave of the previous impulse pattern. That could mean in this case that we may only go to the 23.6% or 38.2% Fib level. If the market is extremely bearish, this scenario may play out.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Monday, August 23, 2010 - 08:34 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Final Pattern Targets

There are many ways of estimating target levels of a completed pattern based on the range of the first wave of the pattern. Most of these methodologies use Fibonacci extension levels.

For example, one method that I frequently use to give me a 'ball park' target level based on the range of the first wave is the 100% extension. It was a very good estimator of the final low for the XJO market crash in 2008.




Now obviously it doesn't always work out so accurately but it certainly gives you a ball park figure to aim at and hence a good method to keep in mind.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Monday, August 23, 2010 - 11:14 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Possible Targets for the S&P500

As mentioned in my Weekend Market Wrap, the S&P500 is more bearish at the moment than the XJO which is why I suspect that we may end up with a different pattern forming on the XJO to that of the S&P500.

Currently the S&P500 price action is sitting below both the medium term 50 day EMA and the long term 200 day EMA. Both of these signalling a possible bearish period for the index. As can be seen from the chart below we are also approaching the March 2009 ascending trend line support which if broken will provide yet another signal of troubles ahead for the index. As has been often spoken about throughout share market circles globally, the US market established a second Hindenburg Omen signal last week which would also normally be taken as yet another bearish signal.




With all of those bearish signals appearing on the horizon it is perhaps an opportune time to consider likely target levels for this index in the weeks ahead. Naturally enough the targets would depend on both the pattern and the correct EW count for each pattern considered.

Previously I had suggested 3 scenarios. The worst scenario is that of a large impulse wave down from the 26th April. This is what I call the Prechter scenario. This extremely bearish scenario is expected to lead to an Armageddon type of period which will completely change the world as we know it.

The second scenario is quite similar in that it expects a large impulse wave down. It is nowhere near as bearish as the Prechter scenario. In this second scenario however the entire move down from the 26th April is a wave 4 corrective move down which eventually will lead to another bull market years from now.

It should be noted that in both of the above scenarios, we are only in lower level subwaves of wave 1 of the major impulse wave down and the corrective move will be a multi-year event.

The third scenario which is the one that I favour is one in which the rally that started in March 2009 is in fact not yet over. In this scenario, the current correction is a correction within that rally leg which will end in the next month or so. After this, I expect a rally leg that will complete sometime in the first half of 2011. It is from then on that I expect a severe down turn in the market to take place.

Anyway, that having been said, let's have a look at the possible near term targets for the S&P500 for the potential patterns that are currently under way. In estimating the potential targets I will first of all assume that we are forming an impulse wave down from the interim market top of the 26th April.




In the above chart we can see that we topped out at 1219.8. Depending on the EW count used, the first wave down would terminate at either 1040.8 or 1010.9. I have labeled these potential wave 1 termination levels as point 1 and 2. In the chart I have labeled the termination of the 2nd wave as point X.

Using the 100% Fibonacci extension method posted earlier this morning that would give us targets of either 861.8 or 802.

Now that we have formed the second wave of the pattern, we can use another ratio to cross-check the termination level for the 3rd wave of the impulse pattern. One of the most common ranges for a wave 3 is 161.8% of the range of wave 1. Hence using that ratio we now have possible target levels of 839.6 and 791.2 respectively.

So summing up, if we use the 1040.8 as the termination point for wave 1 then we get targets for wave 3 of between 839.6 and 861.8. If we use the 1010.9 as the termination for wave 1 then we get targets for wave 3 of between 791.2 and 802.

Note that the above potential targets for the third wave of the impulse wave forming in scenarios 1 and 2 could equally be applied to my favoured scenario 3. As my favoured scenario 3 is not an impulsive move down from the 26th April but a Zigzag where the first leg down was a wave A and the second rally leg was a wave B I would tend to use wave equality between waves A and C for determining a target level. Currently, based on my own EW count for this scenario that would provide a target for the termination point of wave C being 1129.2 - 208.9 = 920.3.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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thanks for doing that Rudy,

Your favored Scenario 3 target of 920 also corresponds with a strong Pollyanna Martians line as well I recall.

It would be interesting to get Randall's numbers from 920 to 791 on Pollyanna, to see if there is any other strong levels of support if we end up breaking the 920?

thanks mate

bill


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mastersl46
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Hi Everybody!!
Can anyone tell me what the heck is happening with the XJO?????
I sold my house, my Ferrari, my luxury boat with the helipad built on top and even sold my wife & 2 kids to some billionaire from Kazakstan for slave labour & used all the money to buy XJO 4000 September puts. Now it seems this wasnt the best idea.
Ah well, I might start playing russian roulette to keep myself interested.
Rudy, could it be possible that the XJO is forming a longer a,b,c correction for the 2nd whilst the SPX looks to already be in its 1,2 - 1,2 of the 3rd?
Also this is to anybody - Is there any real significant US data coming out on the 25th, 27th or anytime next week(especially the 1st or 2nd of Sept) that could influence prices dramatically?
Many thanks for any feedback.


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p3t3
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mastersl46 wrote on Monday, August 23, 2010 - 11:20 pm:

I sold my house, my Ferrari, my luxury boat with the helipad built on top and even sold my wife & 2 kids to some billionaire from Kazakhstan....


Sounds a bit rash, Masters. Probably get a much better price for the kids in a decade or two.


mastersl46 wrote on Monday, August 23, 2010 - 11:20 pm:

used all the money to buy XJO 4000 September puts. Now it seems this wasn't the best idea.


Looks OK so far. Hope the puts were September 2015


mastersl46 wrote on Monday, August 23, 2010 - 11:20 pm:

Ah well, I might start playing Russian roulette to keep myself interested.


Great sport. How'd you come by the revolver?....oh yeah, Kazakhstan billionaire....standard equipment required for dealing with one of those.

(Message edited by p3t3 on August 24, 2010)


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billt
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hi Masters,

Lots of more 'fun' US figures being released this week, starting with:

Aug 24 Existing Home Sales

Aug 25 Durable Orders, New Home Sales, Continuing Claims, Crude Inventories, Durable Goods

Aug 26 Initial Claims

Aug 27 GDP, Mich Consumer Sentiment

We have completed our wave ii overnight, after it hit my target at a 50% fibo. Look out for an imminent 4% drop, next stop 1027. If the numbers out on the 25th are poor, look for a quicker trip to 1010.


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billt
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Tuesday, August 24, 2010 - 08:18 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



iii of iii of iii underway

We continue to see a parade of terrible economic news in the US summer of recovery. More gloomy figures this week will see a collapse of the US markets I fear.

The SPX completed wave (ii) at the 50% fib retracement overnight. It has now pulled back sharply, and is set for the completion of wave (iii) of circle wave ii.

There is nothing to be bullish about the SPX.

The MACD on the S&P 500 Daily has moved below the zero line.
The ADX remains bearish.
The 5-min and 15-min got bearish regroupings of their moving averages.
The 60-min chart got a bearish realignment of the moving average trio.
Market breadth indicators remain bearish.
The weekly summation Indexes on the NYSE and the Nasdaq both are bearish with the stochastic (5, 3, 3) parameters having a bearish cross.

The VIX got a bullish DI signal at the end of July, which was later triggered, and now is on the rise.
There is a massive head and shoulders topping pattern forming the daily and weekly chart of the SPX, monthly chart remains bearish.
The moving average trio in the daily timeframe got another bearish cross.
We have a failed Accumulation Phase on the daily chart, with the SPX having fallen back below the 200-day MA. It also reversed off the 100-day MA.
Circle ii rally couldn't clear the resistance zone at 1100-1107, we are heading south.





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billt
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Tuesday, August 24, 2010 - 08:23 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Typo above, should have read:

"The SPX completed wave (ii) at the 50% fib retracement overnight. It has now pulled back sharply, and is set for the completion of wave (iii) of circle wave iii".


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market_mad
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Tuesday, August 24, 2010 - 08:29 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Masters,

Plenty of time for those puts my friend!

Latest from EW

Cheers
MM

The S&P 500 spiked to 1081.58 at today's open, while the Dow pushed to 10,304.70. Both levels were within our cited ranges from Friday night (1079-1083 in the S&P and 10,300-10,317 in the Dow) and prices reversed lower from there. So far so good. NYSE TRIN was .32 on this opening spike and the NYSE a/d ratio was a healthy 5.5:1. The inability of prices to hold up thereafter suggests that these highs are the top of Minuette wave (ii) and that wave (iii) down is underway.

Wave (iii) should be a persistent decline that draws prices toward the July 1-2 lows of 9614.30 in the Dow and 1010.91 in the S&P. Our bigger picture wave count indicates significantly lower levels thereafter, but we'll focus on just wave (iii) at the moment. So tomorrow should be a strong down day for stocks.

The top alternate potential is a minor detour along the market's overall path lower. It is possible that this morning's spike open is wave a of (ii), which would make today's selloff wave b, per the alt. line on the top two charts. This alternate possibility would have prices rally above today's highs to complete wave c and wave (ii). Thereafter, wave (iii) down would draw prices toward the above cited target areas. As long as 10,253.40 in the Dow and 1075.41 in the S&P remain intact, we can be confident that wave (iii) down is unfolding now. If prices rally above these levels we then have to more seriously entertain the alternate potential, which would push pack the start of wave (iii) by a couple of days.

NYSE daily volume was again very light, with just 854 million shares traded, well beneath both its 10-day and 30-day moving averages. But today's most interesting statistic that we saw was the CBOE equity put/call ratio, which dropped to .39 by day's end. That was the lowest level since .33 on April 14, a week prior to the April 26th Primary wave 2 (circle) top in stocks. The S&P decline 15% during Minor wave 1 down to late May. The CBOE total p/c ratio closed at .69, which was the lowest close since .66 on April 26, the day of the stock market's high. Traders are making a huge bet on the upside right here, just as a third-wave decline is starting at several degrees of trend. And they are so confident in their opinion that they are placing this bet with the market declining. The last week of August and the beginning of September is shaping up to be a very interesting time in the stock market.

In terms of possible volatility markers this week, tomorrow through Thursday will see the release of various pieces of housing data from Existing Sales (Tuesday) to Mortgage Applications (Wednesday) to delinquencies (Thursday). The financial media will be talking about this as well as the Jobless Claims data to be released on Thursday morning and the GDP numbers on Friday morning. As before, these numbers have zero relevance to the stock market's main trend, which remains down, but their release does sometimes coincide with short-term bouts of volatility.


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billt
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Tuesday, August 24, 2010 - 08:53 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The SPX 20 week Moving Average is extremely close to crossing over the 50 week MA.

The last time the cross occurred was right before the crash of 2008!


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rdumas
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Hi Guys,

Great posts Bill and MM. As indicated by both Bill and MM by far the most popular EW count for the S&P500 for the latest price action is the formation of the beginnings of a Minuette wave (iii). Whilst Prechter believes that the top on the 26th April was Primary wave circle 2, the bottom on the 1st July was Minor wave 1, the top on the 9th August was Minor wave 2 I have a different view at this point in time. As I believe that we still haven't completed the March 2009 rally at this stage of the cycle I believe that we are in an ABC corrective wave at the moment. So I have the top on the 9th August actually being a Minor wave B.

If we put aside those differences at the higher level and focus at the current levels then the wave counts will be similar for both scenarios.

The chart below relates to both scenarios for both levels. Basically, the popular view is that we have started Minuette wave (iii).



Traditionally, wave 3's tend to be the strongest and usually the largest of all of the impulse waves in equities and indices. For this reason as we have commenced a Minuette wave (iii) within a larger Minute wave circle iii the move down should now start to accelerate causing quite a bit of panic in the market.

Now I have a theory that is still under construction (I guess that means it's a hypothesis ) that the market will always do what causes the most damage to both bulls and bears. So using that hypothesis it means that the popular view will probably be incorrect. For that reason I propose the following count for the S&P500 which was outlined in my weekend Market Wrap document.




Now remember that the majority of bears believe that the market is now going to plummet so they will be piling on the shorts. The above EW count assumes that we have only just completed Subminuette wave iv and that we are in the process of forming Subminuette wave v. Once completed it will rally up to form Minuette wave (ii). These would commonly retrace back to the price range of the 4th wave of the previous impulse wave one level down (ie around the 1080 level).

The latter price action would catch the bears by surprise and take out their stop losses thereby pushing up the prices further.

I only propose the above scenario so that bears are aware of the traps that can be sprung on the unsuspecting bearish trader.

The price action for the S&P500 will very quickly let us know which scenario is correct in the next couple of days. I will be closely watching the patterns as they reveal themselves.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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market_mad
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Tuesday, August 24, 2010 - 10:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

I tend to agree with you and that is why I am a bit nervous with the shorts and puts I currently hold - the market rarely does what you expect it to do. Hence, all of the masses that think it is going to go down does make me think that the bulls will try to sucker in a few more people yet before it falls in a big way.

Cheers
MM


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rdumas
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Tuesday, August 24, 2010 - 10:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

POG is getting to an interesting level just about now. If it is going to carry on with the rally it needs to start firing up its rockets anytime now.




The ETF GOLD needs to break out of that descending channel that it finds itself in at the moment.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Tuesday, August 24, 2010 - 10:49 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Lee,

As MM said, don't worry about the painfully slow descent of the XJO. Once the wave 3's really kick in the trip will be breath taking.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rash
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Tuesday, August 24, 2010 - 11:20 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Just to put a cat amongst the pigeons ...

Wotif ... what if everyone is looking at the wrong H&S and not a possible inverted one that agrees a Wave iii is at hand ... just not in the direction everyone expects?!?

2


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rdumas
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Tuesday, August 24, 2010 - 11:56 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Looks like time for a bounce





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Tuesday, August 24, 2010 - 12:41 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Looking at the intra day 5 minute chart for POG I think that it is possible that we may be getting close to the interim low. I suggest that it will be somewhere near the $1217~$1218 level before we see our hoped for bounce.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Tuesday, August 24, 2010 - 03:12 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Rudy

SPX

As an alternative, we could see an ABC unfold from the 1063.91 termination, to retest the descending trend line at the 61.8% fibo @ 1086, and complete wave ii at a higher high. That would only delay the inevitable.



My thoughts are that we are heading south...

The $USD looks to be in the initial stage of a bullish wave 3 event of its own, which perhaps is a sign that the ‘dump’ is ready to unfold.

Etf GOLD

POG is having a wobble. It did just about hit my initial resistance of $1239 level, topping at $1237.20 a few days back. It hasn’t had another run since. Hopefully your abc pattern terminates as you suggest.

I am hoping the $AUD will come under pressure as wave iii kicks in, to support any short term POG weakness.

I may sell out at some point, and revert my attention to TZA, as I am feeling more confident in the general market bearishness than in the strength of POG. I worry that in a market collapse there may be a sell off of everything, and a rush back to $USD.

bill


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rdumas
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Tuesday, August 24, 2010 - 04:07 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Your SPX count basically would result in a similar count to my preferred count provided this morning as it would mean that we effectively both end up with a Minuette wave (ii) terminating around the 1080~1086 level.......different road, same destination.

As for ETF GOLD the charts for POG and ETF GOLD aren't all that inspiring at the present time. Slow Stochastic headed south on the POG. Of course with that indicator there is nothing stopping it from kicking up again.



The ETF GOLD has come to the 50% Fib retrace level and the upper boundary of the descending channel. Couple this with the oversold SS and it isn't very confidence building.

Anything is possible here mate. That $1260 level still looks appealing for the POG and it is in a 5th wave so flip a coin.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Tuesday, August 24, 2010 - 04:44 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



One more overnight on Wall St, then I'll decide tomorrow..

$1238 was the left shoulder, $1237 the high on the right!




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rdumas
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Tuesday, August 24, 2010 - 04:57 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Short term XJO Targets

It looks rather bearish for the XJO at present based purely on the chart below. As can be seen the XJO dropped down through the blue support level. Should it drop down to the second orange support level down it will hit 4278. Now as a matter of interest, if we get wave equality between the current down move and the previous down move that would give a target of 4278.3. To me that is an amazing confluence of targets.

Needless to say my suggested short term target for the XJO is 4278.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Tuesday, August 24, 2010 - 05:15 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Don't be so bearish, I'll go for 4278.3


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mastersl46
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Tuesday, August 24, 2010 - 05:37 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Everybody!!
Thanks for all the feedback!
Regarding the SPX, if we were to put each one's info all together, than the possibility of the 2nd not being over yet of the move from 1100 could be of more reality than the finished smaller 2nd.
Market mad - you said that the call/put ratio had moved considerably in favour to the bulls in relation to the last few days so they are expecting a bounce off probably the 1065 level with great enthusiasm but the time I am writing this the futures have already slipped below this level. If the 2nd of the 1st (sorry rudy - need to learn which is minute, minette, sub minuette etc!) is already over, it does seem a bit too quick being less than a day of movement, doesn't it?
There were dates I mentioned earlier (25/8 & 27/8) of suggested turning points still in the balance but if the 25th were to come to fruition, than it would more likely be a high (see chart) Besides the dates I just mentioned, the major date for a crash I have is September 2. It could happen 3 days earlier or 3 days later.
This date suggests that the main crash won't happen till the start of next week.
Looking at the XJO now, it looks to be making a bit more sense with a Wave 1 of 3 maybe finishing today. Now the date of the turning point for this is Aug 27. It does look like it could do an a,b,c correction within this time frame.
Anyway what I am trying to say that with all the info put together, to me, it favours that the 2nd of the 1st of the 3rd is not over but will be before the end of the week. The REAL move (50,60 point drop in a session could most likely happen around Sept 1st or 2nd.)
Anyone that is adding to their 20,000,000 short positions, I would not get head over heels just yet, I am waiting till at least after the 25th to add into SPX & waiting till the 27th to add to XJO positions.
Once again this is just my opinion so please don't take my word for it. (See disclaimer 1996249673265900 - A)!!
I am sure that most of the people who read this site are educated enough not to always follow a former taxi drivers opinion on stocks! Hahahahahahaha
spx


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rash
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Tuesday, August 24, 2010 - 06:15 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey, Bill!

I've decided not to wait until overnight to quit my Shorts and go Long.

I just checked Pollyanna's Futures on CNBC to see they've taken a dive ... but then I saw - shock*horror*gasp - JIM CRAMER sees a "very negative" trend in the market.

That settles it ... Wave 3 UP is now underway!!!!!


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market_mad
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Tuesday, August 24, 2010 - 08:23 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Masters,

What EW were getting at with regards to the call/put ratio being low, is complacency. The reading is the lowest in a while which suggests most traders don't expect the market to fall just as we are about to start Wave 3 down. Therefore, it is a good time to buy puts as protection to the downside is so cheap as nobody thinks it is coming.

Hope that explains

Cheers
MM


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billt
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Wednesday, August 25, 2010 - 08:43 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



On more terrible economic news out of the US the SPX continued its fall to complete wave (3) & (4), and appears to have commenced wave(5) with a target of 1027.

Major support level of 1056 was broken, and became a resistance level for the afternoon session.

The final 15 minute bar of the day, broke through the wedge pattern, and is heading south.

On SPX 15 minute:

RSI is bearish and is trending lower.

MACD has set up bearish mMm patterns, and is rolling over.

STO is below 50 and has rolled over.

Next stop 1027, then 1010.





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rdumas
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Wednesday, August 25, 2010 - 08:59 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Possible S&P500 EW Count

At this stage I will post the more popular EW count for the S&P500. The way that the decline is accelerating it does look like multiple wave 3's in operation. As can be seen we appear to have completed a Subminuette wave iv and are now in the midst of a Subminuette wave wave v which will complete Minuette wave (iii).



Assisting the accelerating decline in the US market is the VIX breaking out of multiple overhead trend linees as it breaks free from a medium term wedge.





At this stage I continue to hold the view that we are headed to the 1010 level for this part of the correction. That level coincides approximately with the 38.2
5 retracement level of the March 2009 rally.








I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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market_mad
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Username: market_mad

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Wednesday, August 25, 2010 - 09:24 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

What are your thoughts on the ASX200? I'm thinking that after the carnage today, we may be in for a rally back up to the 4400-4440 area.

I'm not convinced about this, but am thinking of reducing some of my shorts for a healthy profit and getting back in around these levels.

Cheers
MM

 
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