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Trade the Bollonger Band Squeeze

Archive through October 21, 2010

Chart Forum » Hilarius' Hall Of Fame » Elliott Wave Watching » Archive through October 21, 2010

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billt
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Friday, October 15, 2010 - 11:49 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)



I agree Rudy, but a few others are starting to get itchy feet - Nasdaq/Financials/VIX etc...just trying to anticipate the move south, as it may be an aggressive one when it goes pop.


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rdumas
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Friday, October 15, 2010 - 12:34 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,

I have been exposed to Andrew's cycle analysis since just prior to the March 2009 bottom when the majority of EW analysts (including myself) believed that there was still another wave down to go. Andrew was the only one that I read at the time who begged to differ saying that the bottom was in. That conclusion was come to to a large degree on the basis of his cycle analysis.

When Prechter and most EW gurus were telling anyone willing to listen in September that the 1080 level was the market top, the 4M's were saying rubbish, there is a lot further to go. They were wrong and we were right and it was mainly because of Andrew's longer term cycle analysis.

Once again the majority of EW gurus are sprouting that the April high was 'the wave 2 top'. I am willing to have a wager with you that April's top will be taken out well before February/March 2011. That is because on the basis of Andrew's cycle analysis, the catastrophic scenario that Prechter and others are painting is just not even a medium probability scenario. The four year cycle which was part of what took the market down to the low in March 2009 will be peaking in the first half of 2011 (just draw a picture of a sine wave and work out for yourself how long after a bottom a top will be put in place in a 4 year cycle). The next major low on that cycle alone will not happen before 2013 (2009 + 4). Re-read the series of posts Andrew and I did about his cycle analysis. You will see that the cycles are not pure sine waves but rather a combination of 100's of smaller harmonic waves but none the less you can use the individual 1, 2 and 4 cycles as reasonable guides to their tops and bottoms.

The bears are going to be spending the next few months re-adjusting their wave counts to move their so called wave 2 top to a new location. They will keep on doing this until sometime early next year and then finally, they will be correct. Then they will tell you for the next 10 years that they "picked the wave 2 top".

Get with the program Bill and stop letting all of the long opportunities slip past you. Of course there are going to be market pull backs between now and early next year. But the trend will continue to be up and not down.







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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skyhawk
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Friday, October 15, 2010 - 01:10 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)



Hello Rudy/Bill.
 
Rudy, thanks for your kind words, but I cannot take so much credit for the musings of the 4M's. In actual fact it's been our collective efforts that has helped us the most
The Cycles analysis I have been working in is a work in progress that I am still learning how to best utilize. It is not precision timing but rather designed to keep one on the right side of the market as it only SUGGESTS high probability scenarios.
The long term projections have been very good, but earlier this year I started looking at the shorter term using 8Hr bars of the last 1000 points look back. This added a new dimension to the shorter term trading, but I still have a long ways to go to
perfect it's use. Where they fall over at times, is when the market is in distribution and consolidation as in the juncture we have had in the last 2 weeks. If price action refuses to correct when the smaller cycles are pointed down, then we need to take our lead from the larger (monthly cycles) which in this case are pointed hard up.
 The cycles cannot differentiate between a decline or a consolidation before hand. They are very dynamic and sensitive to changes to price action and need
to be reviewed daily (short term cycles) as their profile can change on a dime.
 
This year Rudy and I have been trading ETF Gold, and a combo of these 8Hr bar cycles, EW, and other Cycles methods have given us some very good trades.
 
I will post some cycles on the XAO and SPX this eveing explaining why I expect this market to stay bullish
 
Cheers


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billt
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Friday, October 15, 2010 - 02:41 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)



I try not to convince myself where any particular index will be any further than four weeks ahead.

I try not to be overly concerned whether the market will be up next year or down - I trade both sides of the market, so I don't franky care!

What I use EW for is in short term analysis, and that combined with other techniques hopefully can provide an edge. I respect the intellectual considerations of both sides of the EW debate. What is essential is to keep both sides of the EW thought alive to ensure the decisions you take are well grounded. We are nearing a wave 5 top (both bullish & bearish EW'ers agree with that!), and I am in cash ready to pounce on my shorts to ride the trip south - irrespective of its duration. As the trend turns north, I'll ride that up too.

With world economics in a state of complete breakdown, I prefer to take 'a month at a time' approach and maintain a neutral stance on the outcome for the medium term.

I do respect Andrew's Cycle Analysis and can easily see the markets heading higher over the next few months.

The five year rally from 2002 to 2007 avoided any serious low, so at times other cycles can counter the 4 year pattern. A five year bear market may easily do the same in reverse. If the US Banking system & the US Economy (or Europe or UK or Japan) has another melt down, no 4 year cycle will be able to counter the onslaught.

I see each correction as an opportunity not a threat - as long as it is heading in either direction with gusto I am more than happy. So I don't need 'to get with the programme' of a bullish multi month event - if it happens great I'll be there, and if it doesn't happen I'll be on the other ticket counting the waves south...





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rdumas
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Friday, October 15, 2010 - 02:50 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,

The only reason for my last post is that in spite of you suggesting that you don't care which way the market goes, you do predominantly give your analysis both fundamental and technical as to why the market is about to drop like a hot knife through butter. It does leave readers with the distinct impression that you are extremely bearish at present. Naturally enough whatever your particular bias, it is completely your business.

If that bearish impression is incorrect then I'm delighted because there are just too many arguments for both cases to take a particular 'set' on things. In spite of what 'might be' in the future, what 'has been' is that the market has been going up.


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, October 15, 2010 - 03:58 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

Obviously there are numerous FA issues which could derail any rally in a moments notice. I post FA issues which identify those concerns to express the other view point to a 'one way ticket' to a higher destination. (eg. see the Washington Post article below)

Any TA analysis I post is trying to identify a top (or a bottom) - highlighting any indicators which are suggesting a change in momentum. This particular rally has had several false indicators over the past few weeks, which has made the termination of this SPX rally challenging to read.

There are three possible scenarios for this next correction south, but I see either of your EW counts being very plausible outcomes, based upon Andrew's Cycle Analysis 2011 high. As Andrew states, it is only a 'higher order of probability' that his 2011 high will prevail, so I keep my eyes open to the 'lower order of probability' too.

It doesn't take too much imagination from a FA point of view to see the USA imploding at any moment and a Prechter type outcome delivered.

I'll always point out the other side of the argument to ensure we all keep our feet firmly planted!

Bill


"In foreclosure controversy, problems run deeper than flawed paperwork

Washington Post Staff Writers

Millions of U.S. mortgages have been shuttled around the global financial system - sold and resold by firms - without the documents that traditionally prove who legally owns the loans.

Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate "robo-signers."

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system. "


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skyhawk
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Friday, October 15, 2010 - 08:57 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)



This is a chart I shared with the 4M's some weeks ago re a possible scenario for the SPX. I should add here this the most conservative of the scenarios I see at present. I have left the red "forecasted" arrows in place to see how it actually panned out from 2-3 weeks back.
The bullish more alternative to this is that we don't end up tracing out a contracting triangle and keep trending.
Either way we will see higher prices

Cheers
application/msword
spx_ew daily_151010.doc (212.0 k)



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ehmu
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Saturday, October 16, 2010 - 06:17 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)



Attached update of my "spin doctor chart", both daily and weekly charts.

Sorry to say that my charting program for this type of comparison will not give me a bar or candlestick chart, so cycle analysis is cumbersome.

I did do a little cycle analysis on the chart inside the rising wedge. There seems to be a predominance of 29bar cycles.

I believe that the rising wedge represents the interference of the "spin doctors".

If the graph breaks out of the wedge to the north, I believe that the market has accepted the illusion and that market greed has taken over the rally. In that case no more need for intervention.

If the graph breaks out of the wedge to the south, I believe that the market fundamentals have overcome the spin doctors, and the down slide will run until such time as the gravitational force subsides enough for the markets+"spin doctors" to take it positive again.

I would put some EW numbers on the charts, but don't have a clue, inkling, or even a schmick for that matter.

The converging wedge pattern implies that the tension between the believers and the non-believers is gradually converging (relaxing).

The cycling within the boundaries of the wedge is the periodic testing of the "spin doctors"---they are testing the market response when they withdraw their interference.

I note that this chart of market perception is now charting above the yearly moving average, suggesting, or confirming that we are now banging on all cylinders in a new bull market. Momentum and RSI are both bullish daily and weekly on this perception chart.





(Message edited by ehmu on October 16, 2010)



"It is not simply a matter of blindly following the oracle, but rather of understanding one's place within the situation." [Huang]


_____ n a m a s t e

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rdumas
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Saturday, October 16, 2010 - 07:31 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,

Just to tidy up some possible misconceptions regarding cycle analysis. As I mentioned when I first brought up the subject of cycle analysis there are thousands of cycles operating within the market at every time frame. To reduce the complexity of the analysis what I believe that Andrew does is to take each time frame (short/medium/long) and deconstruct the complex market wave form into the 3 most predominant cycles in a particular time frame.

As mentioned previously, these individual cycles are not pure sine waves. They are complex wave shapes in their own right as you would have seen from the cycle charts that Andrew had provided. The four year cycle is not a pure four year cycle but the naming of the cycle is an approximation of its period. The period of each of these three primary longer term cycles varies. The other issue is that the three predominant cycles are not in synch. Over a long period of time there would be periods when they happen to be in synch which gives rise to either an extreme high or an extreme low. Clearly if they were always in synch it would mean that we would market get tops and bottoms at exactly the same periods in time which we obviously do not.

As they are variable frequency cycles with variable time bases, they will on many occasions be working in opposition to each other thus reducing dramatically the effect of any single cycle.

The important point that I was attempting to make in my original post about Prechter's catastrophic scenario is that it is an extremely low probability event in 2010 and 2011 because the 4 year cycle (for want of a better name) is still on the way up and will continue to do so until early 2011.

Now whilst it doesn't particularly help us with determining a specific EW count it does help us eliminate others which fly in the face of the cycle analysis. If we get the 4 year cycle topping in early 2011 it seems reasonable to assume that it will bottom some time in 2013.


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, October 16, 2010 - 07:45 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 Andrew,

You are of course entirely correct in making the comment "but I cannot take so much credit for the musings of the 4M's. In actual fact it's been our collective efforts that has helped us the most."

As you have said many times in private, good technical analysis requires a focus on price, pattern and time. Randall's Astro charts and Barry's Fibonacci analysis provides excellent price targets, EW analysis helps a lot with pattern and your cycle analysis is one of the best timing mechanisms that I have seen so far.

What I was really saying is that the cycle analysis gives us an edge because it can dramatically discount likely scenarios that are propagated by some pretty heavy weight gurus in the market place.

We all know that investing in the share market is a game of probabilities and that there are no certainties. It is very handy to have some tools that help push the probabilities into our favour. We are endeavouring to navigate through some of the most dangerous times that have been experienced in the market place for many years and we need every navigation device available to us.


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, October 16, 2010 - 11:49 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 guys

Thanks Ed for your post. The ongoing added liquidity to the US markets by the Fed is making it more difficult to assess the SPX. Your analysis was very interesting. Thanks.

Your idea of an EW outcome looks more than probable Andrew, perhaps if we are in an ABC pattern, we may push lower such that wave blue a and wave blue c are equal wave lengths - similar to Rudy's 'bearish count' - a version of that idea is plotted on in green. This is my own personal preference, as I have not been convinced by the low volume in this rally. US Financials and other sectors that normally would be bullish in a Wave 3 event are not that interested. Wave red C may run as high as this chart suggests, but I minded to feel that it may underperform.

In terms of the XJO, the ABC pattern is further advanced by the sideways price movement for over a month, declining volume, and the equal wave length proportions. That looks more like a topping pattern for an ABC, rather than a fully fledged Wave 3 event...




I do understand the principles behind Andrew's work Rudy - I was trying to make the point that considering that we are in very difficult times, we need to keep all counts on the table as clearly there will have been times when the Cycle Count has 'under performed or out performed' to the market activity - eg. 2002-2007. It will be great to get Andrew's analysis explaining the 2011 high ideas.

It is fantastic to have the combined wisdom of all the 4Ms here on line....to plot the path ahead.

For most of us I assume we are more concerned what happens in the next 4 weeks, than the 4 months...so the consideration of the termination of this rally top is of more importance than what level the market will be in 4 months...closing long positions (and opening shorts) is the real agenda for most.

I appreciate the efforts,

Bill


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rdumas
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Saturday, October 16, 2010 - 01:01 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)



Hi Bill,

Couldn't agree more. I am also mainly interested in what's happening in the next few weeks rather than few months. The main reason for attempting to see a few months ahead is that my preference is for maximising the time in the market when I'm using a lot of super money. I don't really like day trading with that much capital.

Several people have mentioned reduced volumes. When I look at the volume in the chart below for the last 12 months I can't for the life of me see falling volumes. If anything it appears to have picked up over the last week.

It will be interesting to see how it handles the 50% Fib extension at 1188.4 that is just above the current price action.

At present though the trend is quite strong and showing very little weakness at all. So far the ascending trend line is still a solid support and the 150 day SMA is slowly rising. Its location at the previous peaks represents a good support level for any drop of any significance that may be coming and there is also support further up the tree.

The peak that the SPX achieved 3 trading days ago represents a recovery of 83% of the fall initiated in April.

From an EW perspective that puts the pattern in the class of a Flat Pattern which would limit any fall to around the level of the bottom of the April decline so no matter which way you look at it the chance of a really dramatic decline is quite a low probability scenario.




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, October 16, 2010 - 01:36 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 Price Action


The chart below of the SPX shows us that the index is hugging the UBB however the W%R is showing us that in the short term there is no significant fall in sight.

The W%R indicator's bounce off the -20% level indicates its intention to hug the UBB a little bit longer but how long will depend on which trend line it cuts. The 'blue' line cut will indicate a move up whereas the 'red' line cut will indicate a move down.







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, October 16, 2010 - 01:57 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)



ETF GOLD

This morning the price for the POG was $1368.26 and the AUD was $0.9889. Now prices do have a tendency of changing prior to our market open on Monday morning however based on those prices the value of ETF GOLD is $134.81.

Looking at the 20 minute intraday chart for ETF GOLD that price would take it down to the lower boundary of the ascending channel (naturally depending on which points are used to draw the channel).




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, October 16, 2010 - 02:19 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)



How to tell that a pattern is coming towards the end

As has been mentioned in the past, wave 5 moves in commodities do very often extend into a hyperbolic thrust up in price. One sign that the thrust up is becoming unstable is that the volatility of the swings becomes greater. This is now happening in 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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rdumas
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Saturday, October 16, 2010 - 02:59 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)



Possible SPX Triangle Target Price Projections





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, October 17, 2010 - 02:58 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)



Will we get the anticipated pull back next week?

Check out the article titled Why The Market Should Be Down Next Week.

Following is an extract from the article:

Here is an article by Sy Harding

Of particular interest is the correlation in spread between bullish and bearish sentiment in the AII survey with respect to previous major highs and now. This is usually a reliable indicator – and I believe it will be again here – whether or not the negative impact of this data will be seen this coming week is unknown. What is known, the impact is coming.



For the full article see http://www.streetsmartpost.com/


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, October 17, 2010 - 07:10 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

Some good posts there mate.

My wave count on POG puts us in the early stages of wave v of this rally. Perhaps just completing 2 of v @ usd$1362.80? Where do you see it?




A few things that I am watching at the moment:

1. US Financials;
2. $USD

As you know I have shorted the US Financials x3 (FAZ), and have added more to the short position last week. I bought in at the 'green arrows', with a stop at the overhead multiple Double Tops.

I attach a chart with some thoughts. I see the US Financials leading this correction down, and I'm already on board. Looking for prices to close below MA50, which would be very bearish.







I also attach $USD on the Weekly & Daily. Prices are testing the lower trendline on the Weekly, and on the Daily the candlesticks look set for a reversal. I have suggested that the move is an ABC, note the wave equality. Check out the Euro, it is doing the reverse...








If the $USD heads north from here, SPX may have already topped?

My thoughts on XJO volume, is that if this is a wave iii, volume should be increasing rapidly since the beginning of this rally - it looks to me that we have a low take up...




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rdumas
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Sunday, October 17, 2010 - 08:41 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)



Thanks Bill,

Our friend Dolphin opened my eyes up to another excellent tool for determining tops and bottoms in any time frame on any stock or index. I still reckon that he's a genius. The technique involves using the W%R14 indicator. I have spent all weekend playing with it and giving the technique a thorough testing.

For determining turning points for bottoms, use any of the bottoms of the indicator trace (they don't have to be consecutive bottoms or near the price action, nor do they have to be the major bottoms) and draw a trend line. See the red lines on the chart below for the USD. The aim is to use any two bottoms that will get you a cut of a falling indicator trace somewhere near the -20% level.

For determining turning points for tops, you use any two tops of the indicator trace and draw a trend line which cuts a rising indicator trace somewhere near the -80% level. See the blue lines on the chart below for the USD.

OK, so now that you know the rules, note that we have had a blue line cut over on the last candle for the USD so we have a strong signal here that we are going to see a move up from here. If that is the case then we may also see a move down in the AUD and possibly the SPX but I'll check that later.





OK, now if we look at the chart for the POG we see that the falling indicator trace has not yet cut through the trend line so we do not have a signal yet. However if it does cut the trend line then the likelihood is very high that we will have a top in place.

In answer to your question about what the EW count is for the POG, I believe that we are in a 5th wave and in commodities it is impossible to determine the range of the wave because they often thrust up in an uncontrollable fashion. You therefore have to use other means to determine a turning point. I would suggest that this W%R indicator method is probably as good as anything.





Now have a look at your US Financials index matey. I think that you're on a winner. Note however that this method doesn't tell you what sort of range move you are going to get but it does allow you to monitor the progress of the move. Once the W%R trace gets into the over sold territory, draw some blue lines that will intersect the rising indicator trace somewhere near the -80% level and you will get your bottom (not your bottom......the bottom of the stock ).




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, October 17, 2010 - 09:16 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)



Applying the W%R Indicator technique to the SPX

The chart below is a daily chart for the S&P500.

The red trend line cutting the falling indicator trace gives us a signal of a turning point however as the indicator level is still above the -20% level there is every possibility that it may just be a minor fall. To get a more definite signal we would need to cut one of the other two trend lines.






Looking at the weekly chart of the S&P500 we can see that whilst we may get a cut of the trend line, the may still be a few days before we get a confirmation. This leads me to believe that we may still get a bit more upside before we actually get the anticipated retracement.





This lines up with my view of the EW pattern in play at present which looks like it still needs another move up before completing the pattern.

Looking at the 50 minute intraday chart we can see from the W%R and BB's that there is every likelihood of further up movement. Whilst the UBB is located around the 1183, a move up to slightly over the 1200 would not surprise (see previous posts on the triangle targets).





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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Monday, October 18, 2010 - 07:40 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)



Good work Rudy - and to Dolphin!

It is interesting that in previous SPX corrections, it had no 'false' signals. On this rally perhaps we have had two signals that have suggested 'we were there' already, ...which says perhaps something about a bit of Fed intervention?

...but a great method of Dolphins!!

A few other 'canaries' I note our American cousins are using at the moment (so many of these around - a bit of an 'art form'). Several 'false' readings here as well:

$SPXA50R - looks very toppy, and ready for a rest...but anytime after 26 September it could have suggested it was over?

$NYMO - rolled into negative territory below MA200, and looks like a possible top...but 23 September suggested it was over too?

$GNX - commodities top looks like it is in. This looks fairly definite!












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rdumas
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Monday, October 18, 2010 - 07:46 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)



All Is Not What Appears

There will be people who look at the NASDAQ and believe that a new bull market is definitely in play. Unfortunately as is so often the case in the USA, the figures they release do not really give you the 'real' picture of the state of affairs in that country.

Note from the chart covering the period of the GFC that the NASDAQ has recovered around 79% of the plunge from the market high in October 2007.



Looks impressive and would make any red blooded American believe that all is well. The reality is that the performance of the NASDAQ has to a large degree been on the performance of 5 companies the largest of which is Apple Inc. Now there is no doubting about the amazing performance of this company as can be seen from the following chart which follows its fortunes during the worst financial crisis since the great depression.




Now comes the 'fiddling of the figures' that the Americans are well known for in order to make the overall economy look better than it really is. The explanation is clearly shown in the diagram below.





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, October 18, 2010 - 11:59 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)



Hi Bill,

Some very interesting canaries to keep an eye on. GNX on the daily chart has given an imterim market top signal (ie a sell signal) but I like to always look on the weekly to see how serious it may be. For that reason I thought that I would have a longer term look at the GNX chart so below is a longer term daily chart with a weekly W%R indicator.

I have drawn in "an early warning signal" with the green trend line and a later confirmation signal with the red trend line. This seems to indicate that whilst a pull back is certainly in the wind, a more significant one is still a few days away. Hence all the indications to me are that any more significant pull back will possibly occur later this week.





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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Monday, October 18, 2010 - 12:10 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)



POG correction has the Williams in a sell?

Interesting that the two spikes down corresponded to my wave i/ii, and iii/iv pullbacks...perhaps this is what Dolphins system is based on, two corrections then 'bail' on the third - as it may be the completion of the 5th!?

...wave v may have several of these spikes, before the ultimate correction???




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rdumas
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Hi Bill,

One of the things that Dolphin suggests is that you need to read the W%R trigger along with other technical parameters associated with the actual price action of the stock like trendlines, support, etc because whilst it gives you a turn point it doesn't mean that it will be a significant turn point. Note the previous 'arrowed' trigger that bounced from around the same level that we are currently sitting. So whilst I think that it is quite possible that we may be starting our significant pull back, it will be worth while seeing if it falls through that yellow ascending trend line on the POG price action.

I would suggest that a W%R trigger in conjunction with a break down through the price action trend line would be a very bearish sign for 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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Monday, October 18, 2010 - 03:20 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

I understand the bullish count heading north.

How would you complete the bearish count considering the triangle/bear flag setup on SPX?

As Triangles need to be in either a wave-4 or wave-b position, I assume we need a count something like this:





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billt
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Monday, October 18, 2010 - 03:28 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)



Thanks Rudy for the POG chart - Price heading north again so we will see if this is iii of 5.

Hopefully POG keeps pushing up until XJO completes its correction...


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rdumas
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Monday, October 18, 2010 - 03:44 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)



Hi Bill,

Re your post 424. It is possible that what you have labelled as a triangle may in fact be an ending diagonal for your wave c. Remember that a wave "c" of any kind can be either an impulse wave or an ending diagonal. This would also be the termination point for your higher level wave c hence completing your wave 2. Hence you would not have had a triangle but an abc wave 2. You would then be ready to start a wave 3 move down tonight.

(Message edited by rdumas on October 18, 2010)

(Message edited by rdumas on October 18, 2010)


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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skyhawk
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Monday, October 18, 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)



Re the following post made last week:

Thursday, October 14, 2010 - 07:07 am:


--------------------------------------------------------------------------------

Interesting price action in POG today.
Looks to either have completed OR completing a 5th wave of SOMETHING???

Ofcourse 5th waves in commodities have a habit of extending, but
ATM it sure looks compelling....

Cheers


As expected this was indeed a 5th wave of some degree completing here as the market only trended for one more day after I made this post. I put it as completing red wave 3 and a pullback to the lower span of the contracting triangle (approx 1330 USD or the 38.2 retrace level) red wave 4 of one less degree should be coming. We look to have one more leg up (red wave 5) to come after this correction. The only other alternative is the rally is complete, but that is lower probability.

Cheers
application/msword
spot gold 8hr bars_191010.doc (148.0 k)



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ehmu
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Tuesday, October 19, 2010 - 04:26 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)



Value line index at resistance, but no sign of weakness.

http://www.investopedia.com/terms/v/valuelineindex.asp






_____ n a m a s t e

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rdumas
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Hi Hal,

That's a very interesting index. Thanks for bringing it to our attention as I had never heard of it prior to your post. When they say that all 1700 stocks are given an equal weighting, do you know whether that is based purely on their percentage price change so that if the average price move up was say 50% then the index would go up 50%?

Would I be correct in assuming that percentage changes would be tallied up and then divided by the total number of stocks to get the final index figure? I would assume that they would have to do something like that to take into account stocks being added (or disappearing) from the index.

The concept of this index is good from the perspective of getting an idea of the overall participation of all stocks in the market so that the index would not be skewed like the NASDAQ is with APPL.


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, October 19, 2010 - 07:52 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,

Re: Fiddling the figures.

I guess that Apple has to sit somewhere on one of the indices though. I saw a report on CNBC the other night that said if it had been a Dow component that the Dow would be trading at 11,900+. So either way, it's that big a company now that it's gonna have an effect no matter where it sits.

Cheers
MM


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rdumas
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Tuesday, October 19, 2010 - 09:03 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,

Having a big company in any index was not the issue for me, it was the fact that even though its weighting is 4 times the size of any other company in the index, it's actual market value is only 25% greater than the next largest company.......that's the fiddle that I'm talking about. Here's that chart again which had the relevant comment.






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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ehmu
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Tuesday, October 19, 2010 - 09:25 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)



Yes Rudy:

My understanding is that the "Arithmetic" value index is the mean (simple average) of their equal weighted index. Where they take their selected (most active) shares on the selected exchanges, weigh them based on equal investment $ , add up the total value, and divide by the total number of equities. I understand that their list represents approximately 95% of the capitalization on the exchanges that they consider.

The index includes stocks listed on the New York Stock Exchange, the American Stock Exchange, the regional and Canadian exchanges, the Nasdaq National Market, and the over-the-counter market. Unlike most indexes, which are weighted by market capitalization or stock price, the Value Line Composite Index assigns equal weight to each component. In other words, it provides an indication of the performance of a portfolio with equal amounts of money invested in each stock covered by Value Line.

I like it because it seems to represent the overal general mood of the markets with respect to trading, this is the one that I use. I firmly believe that this chart filters out much of the noise in the markets, including rotation noise (confusion) for example.


There is also a "Geometric" Value line index, which I don't completely understand the averaging calculation or the implications. The definition is---An equally weighted price index of all the stocks covered in The Value Line Investment Survey. Geometric refers to the geometric averaging technique that is used to compute the average, which is the nth root of the product of a set number of terms. For example, if there are 3 terms, then the geometric average of the 3 numbers would be the third root of the product of the 3 numbers. Geometric indices are not commonly used. The index is watched as a proxy for the market’s performance and represents the typical retail investor’s portfolio. Institutional investors like it because it is an indicator of how mid-cap stocks are performing.

Here, I'll post both for the same time frame so you can see the difference. There is quite a difference.

The volatility seems to be lessened on the geometric, but the breakout timing is roughly the same on both.









_____ n a m a s t e

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rdumas
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Tuesday, October 19, 2010 - 10:07 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 Hal,

They would be good indices to track. It's a pity I can't seem to get it on my IC software. Have you attempted to find it there? If someone finds out how to do it I would be really interested to know how.


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, October 19, 2010 - 10:21 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 S&P500 looks like it has a fractino more to go before the next interim top

If I'm seeing things clearly it looks like there is a 5th wave to go before we get a bit of a pull back. Note that I am only suggesting the 1140~1150 level targets should a reasonable decline take place. A 38.2% retrace would take the index down to around the 1130 level.





The following 99 minute charts shows the levels that we could find support at on any pull back. There are certainly a number of good support levels on the way down.The fact that a top is probably not yet in is also apparent from the fact that the W%R sell trigger is still not hit. The W%R is currently -4.36. I have projected a possible trigger point with the red dashed line which could happen midway through tonight's session.







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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ehmu
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Hi Rudy:

I imported it from Yahoo, $vla_us. Chart attached.

ps
I find that the 13per W% is the baby---in these volatile markets, the 50 crossing is where the action is. And further that most of the time when the 50 is respected along with the 13ema that there is a continuation.

The same goes for the 13per TMO "0" crossing, and the 13per RSI 50 crossing.

fyi, I have asked colin to include these on the scanner pulldown, but not included as yet.






_____ n a m a s t e

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rdumas
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Tuesday, October 19, 2010 - 12:34 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)



Thanks Hal. When you import it does that mean to update it you have to keep importing the file again?


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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Hi Hal,

Apparently those codes are available in IC. I received instructions from a friend via PM. The instructions are as follows:

In I/C go to Securities / BC US Indexes / P..V / Value Line Geometric [$VLG]

In I/C go to Securities / BC US Indexes / P..V / Value Line Index [$VLA]


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, October 19, 2010 - 01:14 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)



S&P500 Price Action

Further to my post 4208 this morning in which I suggested possible down side targets once we get the anticipate pull back in the market. I thought that it was worth while reposting my triangle target chart that I posted on the week end to remind readers where I think the interim top may be reach in the next few days.

Hence the target range is between 1186.4 and 1202. Last night the S&P500 reached 1185.53.





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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Wednesday, October 20, 2010 - 06:23 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)



hi Guys

SPX finally broke the 6 week trend line, and it appears to be on it's journey south.

The initial three waves present near on equal wave lengths (18.61 & 17.78) for the first and the third waves to mess with both bulls & bears heads. I have it set up for another gap open in a iii of 3 tonight - but it also easily be an abc....






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rdumas
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Wednesday, October 20, 2010 - 07:31 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)



Bill,

I'm proud of you matey. You are really getting the hang of this EW stuff. Well labelled.

My downside targets yesterday were 1140~1150. Those are still in play but the size of the initial fall can often be a bit of an indicator of the total fall. The SPX fell a total range of 25.82 points from the top to 1159.71. A 100% extension to that range would take the SPX down to 1133.89 which is very close to the 32.8% Fib retrace level of 1129.82.



Note that the W%R sell signal has well and truly been triggered.

As you know I would favour your corrective wave count (ie the abc count) where the 3 wave move that took place last night being the higher level wave (a). If that is correct then there should be a bit of a rally prior to the commencement down of the final wave (c) to the sort of levels mentioned above.

I will be away all day so won't be able to see the fun times but will log in late this afternoon to see the aftermath in the Aussie market. I would be surprised to see this corrective move lasting more than a week.

Naturally enough if things turned really sour and the 1040 level was taken out then I would have to revert to my bearish wave count and join the grizzlies. I would be very surprised if this happened though.


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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skyhawk
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Wednesday, October 20, 2010 - 07:46 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)



I would very surprised for this move be any more than a 2-4 day
countertrend.
The XAO has had an Ending Diagonal pattern forming for
a few days now. But the size of the ED ( quite small) usually
results in a sharp short selloff and the trend resumes.

My numbering on Spot Gold with targets of 1228-1230 appears
to have been correct a few days ago. It has now though retraced
almost 38.3 fib of the last wave 3 leg and last nights action
sure looked like a wave C capitulation to me.

I am looking for clues for a bottom ( if the count is good) and thereafter
a continuation into next year.

Cheers


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billt
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Wednesday, October 20, 2010 - 09:37 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)



Interesting to note that today the New York Fed, Pimco and others threatened litigation via demand letters to force the Bank of America to buy back $47 billion in OTC derivatives known as securitized mortgage debt - crappy OTC Derivatives now total over usd$2 trillion....If B of A pay up there maybe a flood of litigation to follow?

If this gets a head of steam in the next few days, it will be interesting to watch the extent of the sell-off.

POG should be a winner out of this? I expect that POG may have completed wave 4, and now into wave 5. It is hanging on the bottom of the two month trend line, so it needs to head north from here otherwise it is in trouble. The declining $AUD is supporting ETF Gold for now...+$100 for POG & 90c for $AUD?


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ehmu
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Wednesday, October 20, 2010 - 12:48 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)



XJO looking directly at support $45.60, where the market has changed its mood from sell to buy many times.

There now, if that isn't vanilla.






_____ n a m a s t e

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ehmu
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Wednesday, October 20, 2010 - 12:52 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)



Not sure about $VLA rudy, I imported once, and other times I just enter $VLA_US, or find it in my symbol pulldown on the upper left of the charts if I haven't looked at too many others in the mean time.




_____ n a m a s t e

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rdumas
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Wednesday, October 20, 2010 - 04:51 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 Folks,

Been out all day and missed the action. When I look at the chart below I find the argument of a market in trouble very difficult to see. So much so that I bought some STW so am now in BHP, WBC and STW and will just keep adding to it if I think a bottom is close by. Like Andrew I don't expect the down move to last very long so feel pretty comfortable about being long at this time.

The market's decline was so unconvincing that it didn't even want to test the 50 and 150 day SMA or the LBB. To me the XJO looks like it's busy building a concrete platform to launch off. My Golden Cross signal (50 day SMA breaking up through the 150 day SMA) is getting closer and closer.






Looking at possible EW counts I propose the following:



Now my personal preference is that we are in a corrective move rather than at the start of a strong move down to below the May low. In that pattern we have either completed the corrective move down already or the (a), (b), (c) move is only wave A of a larger ABC move.

(Message edited by rdumas on October 20, 2010)


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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Wednesday, October 20, 2010 - 07:45 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)



Current Support for S&P500

I won't rabbit on about the chart below other than to suggest to any bears who are considering becoming aggressive at this stage should be aware of the current support for the SPX price action.




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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skyhawk
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Wednesday, October 20, 2010 - 10:32 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)



Hello Rudy,

If it's a simple abc then as you say a low is already
in place. (2-4 day countertrend ) If it's part of a larger ABC then we
should be looking fir end of next week for a low. (7-10 day countertrend)

Cheers







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billt
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Username: billt

Post Number: 430
Registered: 02-2010

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Thursday, October 21, 2010 - 05:41 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)



Both of the EW counts are still in play.





 
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