Use access key #2 to skip to page content.

GoodVibe4Ever (< 20)

No Lucky Charms earned yet.

GoodVibe Chart Lab - Technical Analysis unleashed

Recs

50

April 04, 2009 – Comments (180)

In the last few days, we’ve been discussing loudly within our community what we should make out of the current rally, does it have more legs at the current levels, or we have a downside risk. We didn’t reach a complete agreement of what’s exactly the near future will hold for us and some of us even doubt that we should be cautious calling 666 as the bottom. We had great minds who came together to present their cases with thoughtful and well-supported analysis and evidences and I thought it’s beneficial to all of us to bring it here so all Caps’ members can see for themselves number of scenarios in hope it add some value to their thinking. If you don’t think that TA is your cup of tea but have fundamental view that can add value to the posters and readers, please feel free to post. We will listen and thank you for it. We love to hear something that we are not that good at so we can learn and add value to our thinking. I believe that the friction between opinions is where true education reside. Who is first? But first Read The Notice below and make your comment count instead of wasting your time and the readers' time!

                                …............……   Notice   …..........……

Previous closed but related blogs to this post's content are:

1. GoodVibe Market Vibes – The anatomy of the rally March 31, 2009
2. GoodVibe new Cap is ready with its 200 unbelievable Picks April 1, 2009 - From comment #165

Other blogs that we are currently actively commenting on are:

1. GoodVibe Lounge
2. GoodVibe Chart Lab

Please, choose the appropriate blog to post your comments and questions in.

Click here to read this post carefully before reading further or commenting to know why we are doing this. If you decide to skip it, trade on your own risk. A fool and his/her money is just a big party. Thanks!

GoodVibe
Strength & Honor

180 Comments – Post Your Own

#1) On April 04, 2009 at 3:06 PM, binve (< 20) wrote:

I will repost just to keep the ball rolling :)

GoodVibe, anchak, Russ, and Everyone

-------- NOTICE: THIS IS FOR STUDY PURPOSES ONLY ----------

This is a study of several of the last major bear market bottoms. First set of charts shows the historical data available in StockCharts, and so the first set of bottoms are 1980-1983, 1987-1988, and 2000-2003.

Historical Context



Enlarge

1980-1983 Bear



Enlarge

1987-1988 Bear



Enlarge

2000-2003 Bear 



Enlarge

Okay, so here are some observations on the last 3 bear markets.

1. All took place within the context of a very obvious overall larger bear market 

2. All these markets tend to be very corrective in nature. As such they have a very pronounced A-B-C corrective structure with a lot of sideways churning price action

So how does that compare to what we have currently?



Enlarge

Very interesting. This bear does not have a corrective feel at all. It is HIGHLY impulsive in nature (1-2-3-4-5). Is there a historical precedent for this type of bear market? You bet there is:



Enlarge

Personally, I have been do a lot of reasearch about this the last 6 months. And I have seen this parallel unfolding for awhile. Some of my previous comments in GV blogs now make more sense (I am bullish on equities in general when we get down to a broad market PE of 6). 

I have also been reading about another parallel. The 1901 stock panic is similar in structure (in fact it is more similar in some ways than 1929). I don't have data I can share and I couldn't find a public chart to upload. 

But for what its worth, I think 1929 is a good parallel.

So what are my thoughts on this market action? Again these are just my thoughts. I am simply sharing them for the sake of discussion. This is not investing advice and I am not telling anybody what to do with their money. Only advising caution and protection :)

Like GV says above, history does not repeat itself but it does rhyme. My take is that it is like a chord of music. Waves of bears are individual notes and they combine in sequence to form a chord. 

It seems to me based on the sharpness of the drop, this market chord sounds like a combination of 1929 and 1988 (so that is something like an A-7th minor I believe ... :) )

1. I think the move off the bottom at 666 has been very sharp. Very similar to 1988. And what goes down fast and rises up fast ususally has a pretty severe retest. 1929 wasn't quite that way. But it obviously had a bigger "retest" in 1930-1933.

2. Also look at the indicators (TRIX and RSI in these cases). They all show similar patterns, and there is usually a retest after the bottom. The setup is bullish, but it has to prove itself by not going below in price or inidicator trends.

In short, I believe we are going to have a retest. The jury is obviously still out on that, and there is no telling at this point where we are in the wave count. But I am sticking by my statements above in comment #198.

So that is my opinion and my take on the situation. Everyone, please take a look and let the discussion begin!

Report this comment
#2) On April 04, 2009 at 3:07 PM, binve (< 20) wrote:

Everybody,

Here is another take on the current counts and the daily chart. 1929 isn't an exact parallel, since our crash has taken longer to unfold (in 1929, by this time the market was already in the middle of its upward correction). We took another leg down in Feb/March so that throws a lot of the seasonal cycles off.

This is why we can't use 1929 as a 1 for 1 prototype.

But the is lag and churn in Wave {4} has set up a possible reverse head and shoulder (which would be VERY bullish). However none of the pullbacks yet would serve as a right shoulder.



Enlarge

Report this comment
#3) On April 04, 2009 at 3:44 PM, binve (< 20) wrote:

IIcx, (responding to the last blog comment #224)

Thanks, I hear you about the market patterns, next couple of days could be down followed by and upturn continuation of the wave we are in. That detail, however, is not what I am trying to get hung up on. It is the larger picture:

- Are we in Wave 3 or are we in Wave 1?

That is what I am trying to figure out with these charts. 

But your statement:  ... IMHO, the projections you're showing beyond the quantified chart data exaggerate downturns and are misleading in the face of the market conditions and logical short term trends..... strikes the wrong tone

I have stated repeatedly that this is my opinion and and not trying to convince anybody to do anything with their money. I am most assuredly not trying to mislead anybody. In fact, the post before your says specifically

So what are my thoughts on this market action? Again these are just my thoughts. I am simply sharing them for the sake of discussion. This is not investing advice and I am not telling anybody what to do with their money. Only advising caution and protection :)

I have layed out my opinions and have stated very obviously that they are my opinions. This is a discussion and people share opinions in a discussion. You may think I am incorrect, and if so state that and offer your own interpretation. But do not cast someone else's opininon is a negative / unjustified light.

So just to clarify. The are my opinions and I am not telling anybody what to do. I am not being misleading :)

Report this comment
#4) On April 04, 2009 at 3:57 PM, mattskin (< 20) wrote:

binve - run a line through points 3 and 5 in your chart, and I see a channel that would mean we are about to bounce down off the upper bound.  any relevance to this?  Not sure how this fits EWT, or if it would break it...

Report this comment
#5) On April 04, 2009 at 4:06 PM, herztical (28.23) wrote:

I am bullish on equities in general when we get down to a broad market PE of 6

Ahhhhh there's the rub.  What is or will be PE going into earnings?  Past Q earnings will be vastly different from this coming one. While I agree, low PE is buy time, it's just tough to see if worst is behind or last Q was or coming is.  Throw in negative earnings on alot of companies and PE valuation goes out the window. 

So my 2 cents for the short term: avoid short side (you don't have to be in every move), be somewhat bullish by remaining small, buy pull backs, and if you missed the run up in some stocks (GS, RIMM, AAPL come to mind) don't chase them. Stick to companies with + earnings and no debt (div a bonus) and the rest will be taken care of.  Personally I'm not a big fan of sector etfs from the long side; I like individual companies better.

For option traders out there; I'm selling way out of the money April puts on some stocks I like bc they had such a huge run. If they continue to move up fine, I keep the premium, if they pull back I have my stock at a lower price.  VIX is stil high on historic level (40ish) so premiums look good and paid to wait without downside risk of buying in here.  Note: this is a risky strategy and know what your doing and make sure you can cover the option (buy the stock if it tanks).

Report this comment
#6) On April 04, 2009 at 4:26 PM, binve (< 20) wrote:

mattskin, I see what you are talking about. Not sure if that means anything yet.

herztical, If you go back to the original post on GVs blog a few weeks ago you will have the full context. Here is the summary

- Whatever happens in the next few days, weeks, months is ultimately "short term". Long term (for me anyways) is >2 years. And so the rally that I am talking about (whether we are in the middle of Wave 3 of that rally now, or if we are at the end of Wave 1) is in my mind a short term trade. Thats it.

The only sector that I am "long term" bullish on right now is gold.

I am very bullish on commodities becuase they are real assets and will protect against inflation. But they also have economic utility and I am bearish on the long term US economy until much of the financial excesses of the last 2 decades are purged. So I believe commodities will outperform, but will will be the true outperformer.

Now that is my long-term stance. This is very different from what we are disussing here with these charts. I want to make that very clear. I have a long term mindset and a long term investing account, and I have a short term mindset and a trading account. They are separte physically and I treat them seperately in my two investing styles.

This may be / probably be different from other peoples definition of long term / short term. It sounds like it is a bit different than yours.

So I think there will be a multi-month rally that has already started. And I believe it will take the S&P to at least 1000. Maybe higher depending on how it unfolds. But this is a technical rally only. We are too oversold and a rally needs to happen. After this rally is over,  sometime next year, I would not be surprised if we go below 666. In fact I would be surprised if we don't. Earnings have been consistently dropping over the last couple of years, and I don't foresee a meaningful reversal of the trend. We may have a few increasing quarters and a lot of earnings surprises. But I am bearish on most things for the long term.

So these are my opinions and mindset. This is where I am coming from. Whenever anybody reads my opinions, they can discount them or not based on these fundamental thoughts.

Report this comment
#7) On April 04, 2009 at 4:42 PM, binve (< 20) wrote:

So to continue and to finish my tought:

When I say I will be bullish on equities in general when we get to a broad market PE of 6, I am speaking of the "long term" as I have defined above. Once the finanical excesses are purged and a lot of the banks / investment banks go under, the economy gets back on its feet and we start manufacturing things again, we the HUGE disparity betweeen highly paid and lowly paid workers begins to shrinks, and when earnings stabilize and FINALLY start reflecting reality....

Then I will be bullish on the economy and the market. 

When that happens I will sell all my gold and buy equities with both hands with both short term money AND with long term money.

But IMHO, that time is not now. I think this technical rally would happen no matter what the news. Earnings are mostly irrelevant right now. The market on a weekly chart is so oversold, a rally has to happen. Pessimism cannot endure forever.

So that out of the way.

What happens in the next two weeks?

1. Does the rally continue (despite being very overbought)
2. Does the rally pull back and consolidate and build a strong technical base?

I am in Camp 2, that is my opinion.

Report this comment
#8) On April 04, 2009 at 5:16 PM, Tutom (< 20) wrote:

I've been looking through all your posts and your analysis. You're all fantastic! Please, take my analysis with a lot of  grains of salt. 

I believe the previous wave {1} (starting Oct '07) is NOT complete. Of course I could be wrong, but so far we are only 6 quarters into this Large Down Wave. It took 11 quarters from 2000 to 2003 to do less harm than was done in the previous 6 quarters. I don't find it too far fetched to believe that we have another 4 to 6 quarters of pain to come before reaching a temporary bottom.

So, we're only at the end of (3) of {1} at 666 and not (5). We are currently in corrective (up) Wave (4). The length of Wave (3) is 775 to Wave (1)'s 320. Therefore Wave (3) is 2.42 X Wave (1). EWT states that we can anticipate that 30% of the time a wave 3 pushes to approximately the 1.75 to 2.62 range. So, 2.42 fits nicely.

Therefore I am bearshish short term (days or a week or two) as we will probably correct from this first A Wave of (4) of {1}. I am bullish midterm as I think we should retrace (3) 30% to 50% somewhere around 1000 by the end of July. And then it's the downward larger trend Wave (5) to end {1} somewhere in the 500's to finish by December. We're sitting very close to 23% retracement of Wave (3) and do for a pull back. How many sets of 4 up days have we have over the years? If we're not exhausted yet,  we soon will be.

It appears as if world leaders and politicians, policy makers, economists, bankers are moving quickly to make changes in this period. There is action. This lifts the market. Next comes the disappointment when things don't work out just right.

Here's my simple chart: http://www.bestfreecharts.com?emailChartID=54f157a7-9de3-4150-ac4b-f7907b3c37bb

So, my question to you is, if we are still in A Wave (up) of Wave(4) (up) of larger trend {1} down, would that affect the way you are currently counting this present wave up? Does that make sense?

Sorry I've tried to embed the chart many times and messed up. I'll have to go back and look for all the directions.

 

Report this comment
#9) On April 04, 2009 at 5:31 PM, herztical (28.23) wrote:

binve

I was referring to short term (as posted).  For me that's a few days/weeks to a few months. This is all what I refer to when I post things; basically from a traders point of view (or mine). 

My long term investments/strategies don't involve the markets at all (well at least from a tradable point unless they go IPO). They involve real estate multi family/commercial and companies I own/run....those are my long term investments.

With regards to the narrowing of highly piad vs not; the best economies are the ones where there is a great disparity between highly paid (elite) and lowly paid (workers) at least from a capitalism point of view.  People don't like it and may revolt, but the rich always get richer. By taking advantage of the unfortuate; that is the basis of capitalism.  From the vultures in bankruptcies, to home foreclosures, to the gov intervention (RTC in 80s) the best opportunities comes from another mans misery; just the nature of the beast.  But this topic is for another blog.

Short term: a cautious camp #1 to 900 - 1000 burning off overboughts w/ small pull backs along way.

Long term: range bound for years around this level

We'll see starting w/ AA earnings and the reaction to know for sure.

Report this comment
#10) On April 04, 2009 at 5:31 PM, IIcx (< 20) wrote:

I sincerely apologize binve, I didn't mean to imply you are intentionally projecting deep downturns and I think your logic is sound.

To your question, yes this is a single move up for many weeks to come.

One of my old posts pointed out the duration necessary to establish past bottoms. 2-3 months is logical from the 666.79 bottom to the top of the next wave down. Logic in the face of the extraordinary disfunction that has been introduced into the markets by the government programs is at best a guess.

No one in the history of the markets has ever seen anything like this and the market behavior is likely to be very unusual.

My point was simply to encourage a logical projection beyond the data we can chart in relation to a reasonable "should occur".

The 150 drop from later this week on the S&P to mid-March is highly unlikely to occur. The time frame, rise, and fall is to short.

Check the 2002-2003 bottom for the best hope. The 5 year process in '38 is silly but my best guess is that this will end up as something we've never seen before.

I still think this is a Bear market head and shoulders rally and when the Fed funds run out we're headed south in a big way.

Best, IIcx 

Report this comment
#11) On April 04, 2009 at 5:48 PM, IIcx (< 20) wrote:

PS I couldn't believe the CNBC "Cramer" told everyone in his Friday program that they had "missed the rally" and should stay on the sidelines.

GoodVibe is clearly a better teacher and as goldminingXpert pointed out, the trend is your friend.

Report this comment
#12) On April 04, 2009 at 5:50 PM, bostoncelitcs (59.67) wrote:

 Better investment than any stock

 

Report this comment
#13) On April 04, 2009 at 6:04 PM, binve (< 20) wrote:

Tutom,

Hey man, that is a really interesting theory!  Hmmm. I just looked at your chart through the link, and your Wave (4) and a subwave of {1}. Is this intentional? Or do you mean {A}. Based on your statements above, it sounds like either {1} or {A} is about to correct. Do you expect wave (4) to be an A-B-C, or are you really anticipating a 1-2-3-4-5?

But I really appreciate the different perspective. I am still stuck on this as new uptrend from 666, but maybe it is not the bottom. Hmmmm.... I will need to ponder this one for awhile.

This statement very much describes my feelings:

It appears as if world leaders and politicians, policy makers, economists, bankers are moving quickly to make changes in this period. There is action. This lifts the market. Next comes the disappointment when things don't work out just right.

The euphoria right now is just a little too much. The news recently has been okay (not great) and was not really unexpected. This current leg of the rally seems exhausted to me. But that is just my opinion. I am completely open to the fact that I could be wrong here.

But I like your arguments, and I love your wave Fib analysis. That is something I need to become more proficient at.

As for embedded and image, here is the deal:

1) Go to www.flickr.com and sign up for a free account (easy, takes less than 3minutes)

2) Chose the picture and upload it to Flickr through the upload page.

3) After you upload the photo, go to your "Photostream" and click on the photo. There will be several links / buttons above the photo.

 3a) Click on the one that says "All Sizes"

 3b) After you do you will see at the top "Small / Medium / Large" etc. Click on the Medium or Small one.

 3c) Now at the bottom of the photo there are some text boxes with HTML in it.  Go to box 2 labeled: Grab the photo's URL

4) Come back to Caps and write your comment

5) At the end of the comment, write this code:

But replace URL_TO_SMALL_PIC with the smaller picture URL from Flickr, same with the large one.

- Use the small photo URL inside the IMG Tag
- Use the large photo URL inside the a Tag

You are set!

I really appreciate your analysis and your thoughts. I will be adding you as a fave and following you!

herztical ,

Gotcha man, no problem. I was just clarifying my opinion and timeframe regarding my "PE of 6 statement".

However, I do not agree with your wealth disparity observation. I agree that it is that way (and there will always be wealth gaps). In am not suggesting that we all become communists and share everything equally. I am just saying that the wealth gap has ratched up over the last decade especially due to excesses in the finanicial system. And that is simply unsustainable.

And indicatior of a heathy economy will be for this gap to start coming back down.

I do appreciate your opinions. Thanks for all your comments to me (this is why you are already one of my faves).

IIcx

If no offense was intended then absolutely none will be taken. Thanks man :)

To your question, yes this is a single move up for many weeks to come.

Despite the fact that I state my opinions forcefully, I am loving this discussion. You are obviously very thoughtful and intelligent. And (I hope) I am too :). And it is so interesting that good-meaning people can look at the same data and come to completely different opinions :)

I am not being cliche. I really think this is cool! I love the exchange of ideas here!

.... but my best guess is that this will end up as something we've never seen before. ....

LOL! Now on that we have 100% agreement :)

I really appreciate the thoughts and comments directed at me, especially when they are different to my own. I will be adding you as a fave and following you too. Thanks!

Report this comment
#14) On April 04, 2009 at 6:09 PM, IIcx (< 20) wrote:

Great post bostoncelitcs, how can we put this into a chat ever American can understand and how can we fix it?

It's very ease to point to a problem, it's amazing when a solution is capable of fixing it.

I think Russia and China may have gotten it right last week when they suggested we need to go back on the Gold standard. Its pretty obvious that basing the value of currency on "Political Promise" is a foolish thing to do. 

Report this comment
#15) On April 04, 2009 at 6:33 PM, Tutom (< 20) wrote:

 binve -"Based on your statements above, it sounds like either {1} or {A} is about to correct. Do you expect wave (4) to be an A-B-C, or are you really anticipating a 1-2-3-4-5?"

Hey binve, I'm sorry, I left an anotation from a previous analysis of the current wave up. The {1} should not be there,only (4). So, I believe we are going up to 1000 after a breather at some point just as GV is saying. About the A-B-C, I guess that's what I'm asking everyone. Should we be counting this as A-B-C or 1-2-3-4-5?

Thanks so much  for the directions on posting charts!

Report this comment
#16) On April 04, 2009 at 6:47 PM, jimmybroderick (< 20) wrote:

Wow!  If Tutom's right it would go nicely with bvine's "similar to 29-33" thoughts.  Curious what Russ and GV's thoughts are with these pieces of analysis.  I've read that people lost money in the crash of 29, but it was the "head fake" post crash that really destroyed the wealth.  We obviously won't know until after it is over, but all the charting since Friday has been great to see.  Thanks for the insight, everyone.

Jim

Report this comment
#17) On April 04, 2009 at 7:56 PM, RussWild (< 20) wrote:

I just got home from a day and I be honest. I'm off my chair at the level at which people are at in such a short time. I don't even know where to start. From a first glance from the other post to here. I ran through it, but need to go back and look at everything in much more detail.

Binve~ And I thought I felt passion for learning this.. I think you took it to an entire new level... Just amazing work man! I don't think the ABC counts from the bear falls don't look right but i'm not sure yet.. give me some time to look at them.

Dan~ My god man! Those detailed counts were just amazing in both bear / bull counts... amazing!

GV~ Are you just shocked as I am... You got 1/2 dozen guys now that are at my level (or higher) in no time. I think that adds to those who were already good traders before digging into EWT and it is just "clicking" for them... What a great thing you have brought to people!

On a side note, I've made the best investment of all time. I'm moving from a 3 bedroom house to a 1 bedroom shack down the streat to save $1300 per month in rent..... You can't beat that no matter how you try to count it...lol I'm going to have trading funds in months now not years......Wahoooo! Downside is that i'm in packing mode now, so that's why I haven't been around as much and will get worse over the next month. I appoligize for that in advance.

I'll be back!

Report this comment
#18) On April 04, 2009 at 8:11 PM, RussWild (< 20) wrote:

Oh, and boston.. the last time I voted for a president was Ross Perot...lol

Love the vid and I'm so agree with that!! great add!

Report this comment
#19) On April 04, 2009 at 8:12 PM, binve (< 20) wrote:

Tutom, Hey man. No worries on the chart notes :)

But I have been pondering your chart very critically the last couple of hours. So I went back and made a version for myself (shown below).

So I am not saying that we are in Wave {4}, but this chart and these statements below are to be taken as: "What if we just experienced the bottom of Wave {3}, and are in Wave {4}?"

1. First, I have to agree with you, the count tends to look "cleaner". The relative size of the (1)-(5) subwaves are in visual proportion to eachother and the size of {1} {2} and {3} look in better proportion. (I will try to do a fib analysis like you did on my wave identifications)

2. Something that was nagging in the back of my mind about wave {5} ending at  666 was: "what changed?"

The whole purpose of waves at the Primary or Cycle degree or even high are to describe major changes of trend. The 1929 crash was at the culmination of the Roaring 20s . This was a major change for the US.

So I am asking myself, since we are talking about Primary and Cycle Degrees, and if 666 is the end of Wave {5}, what has fundamentally changed? The answer (at least to me) is: nothing

Banks are still messed up, the financial system is in utter dissarray. The uptick rule, M2M and Geither through newly printed Fed money at them does nothing to change the underlying problem. And the truth is that financials are the cancer of the economy right now. Instead of chemo, this was morphene.

So like I said in the last 2 posts that I have written on my blog, and the responses above: I believe this rally is a technical rally only. That doesn't mean it won't be spectacular. But we need a rally if only for the very simple reason that we are oversold on every weekly chart for the indices.

That's all.

So based on the fact that nothing has fundamentally changed about the economy, and that a Wave 4 is simply a correction in a larger wave, it makes sense that this could be the case in the larger economic and investor psychology picture.

3. Look at the fractal pattern of the (1)-(5) subwaves within the {1}-{3}.

The replication is brilliant!. Both 1 and 2 take identical forms at the larger degree. And per Elliott, when a 2 is simple, a 4 is complex. Which is true in (1)-(5). (4) turned out to be an impressive zigzag correction. And if this is fractal replication is a clue and the fact that {2} was a simple correction, then {4} is shaping up to be a very volatile zigzag.

.....Wow.....

Man, you have given me a lot to think about. I will ponder this some more. Here is the chart. 

Thanks!



Enlarge

Report this comment
#20) On April 04, 2009 at 8:14 PM, binve (< 20) wrote:

RussWild, Thanks man! Yes, please check my work. I would like feedback if I am making errors!

Report this comment
#21) On April 04, 2009 at 9:23 PM, binve (< 20) wrote:

Tutom, I have been doing a little more thinking about this:

Let further assume, for the sake of discussion, that we are in Wave 4 and lets add some non-Elliott observations that both you and I have been making:

1. Assume we are in Wave {4}
2. Wave (A) of {4} is running out of steam:
    2a. Daily stochastics are overbought
    2b. Hourly MACD is showing extremely bearish divergence
3. There has been no significant pullback since March 6

So lets say Wave (A) is about to end, and lets call the end point 860. From 666 to 860 is 194 pts. I think if we are in a zigzag and we are about to experience Wave B, it should be a fairly sharp retracement. I think 50% - 61.8% is reasonable. Lets use 55.9% as an average.

194*0.559 = 108; 860-108 = 752 Lets use 752 as a Pullback spot for B.

For zigzags, wave C is usually 1.0 - 1.618 times the length of A, lets use 1.31 as an average value.

194*1.31 = 254; 752 + 254 = 1006

So using some average retracement and advance ratios for zigzags, based on the initial conditions given above (you can tell I'm an engineer :) ), we get:

Wave B pullback: ~750
Wave C advance: ~1000

This is very interesting. These are the Fibonacci retracement levels that many of us have been watching for a few weeks.

I would love to get yours or anybody else's thoughts on this!

Report this comment
#22) On April 04, 2009 at 9:57 PM, mark91055 (< 20) wrote:

Herz-OMG your using options :-)  I like the play.  Excellant ex. of a way to start a long position.  And dare I say it 'less risk than just buying the equities outright.  There are so many ways to use options it surprises me that grown traders recoil in horror at the thought.  It is the safest way to trade.  My plan for Monday if Market gaps up as I think it will.  Wait for pullback(1/2 hour or so) and buy calls.  Still have lots of puts.  If market starts out lower I will put in call buy for out of money call at open which I will get because someone will "forget" to choose limit but instead choose market.  Either way I wait for market to climb and take profits.  Worse case it falls and my puts are good.  Oh Br'r bear please don't throw me in that briar patch.    

All, I am very much enjoying the chart analysis.  Thanks as this is taking me beyond the standard deviation moves from a moving average that have been the bullwork of my trading understanding.  By the way its facinating how the statistical odds of the market hitting a given Standard deviation line up with fib. numbers.  Gracias from south of the equator

Report this comment
#23) On April 04, 2009 at 11:22 PM, TigerPack1 (98.95) wrote:

Throw out all comparisons and charts to market conditions before 1970.  We left the gold standard, and money can and will be created at will by the Federal Reserve and Treasury to prevent massive deflation, like we have seen since September.

I still hold that 1975 is the best year to review for what will happen in 2009.  After a devastating 2-year, 50% drop in 1973-1974, 1975 saw a sharp rebound, a breather in the summer months and another push to new highs in November and December.  In addition the rally back then began months after Nixon resigned and a new set of leaders took control of the country's direction, similar to President Obama's role in this mess.  Clearly, Obama is gaining momentum and confidence from the markets and leaders inside and outside the U.S. the last few weeks.

I would guestimate that the S&P 500 will rise to the 900-1050 range into May, take a breather (10%-15% correction back to the 850-900 level), then rise strongly again as retail sales and consumer confidence pick-up into Christmas 2009.  By January 2010, the S&P 500 would be trading in the 1100+ range under such a scenario.

This zig-zag would confound conventional wisdom that now either expects a sharp reversal and retest of the 666 lows, or a sharp bear market rally that is followed by new lows later in the fall (Prechter, Dent and others).  If would further upset many of the late-to-the-party bulls that will appear the next few weeks with a summer breather (sell-off) that slows the rapid gains we should continue to see for another 3-4 weeks.

In total, few advisers or investors are expecting a decent gain from 840 now during the next 9-12 months, upsetting conventional wisdom yet one more time.  Cramer would fit in this camp; they believe buying at 840 is a bad idea, if a retest is coming soon.  I can list on one hand the number of credible advisers who believe the 666 number was THE low, that are aggressively advocating a bullish long-term stance at 840 today, either on the web or business television.

AFTER ADJUSTING FOR INFLATION (USING THE CPI), THE 55%-60% DROP IN PURCHASING POWER FROM 2007-2009 WAS ROUGHLY EQUIVALENT TO BOTH THE 1929-1933 AND 1973-1974 EXPERIENCES.  A FURTHER DROP IN THE S&P 500 BELOW 666 AT THIS STAGE WOULD CREATE THE BIGGEST DECLINE IN U.S. STOCK MARKET HISTORY.  If you believe in playing the odds, it is highly UNLIKELY the stock market will decline below the March low trade.

 

Report this comment
#24) On April 04, 2009 at 11:40 PM, anchak (99.86) wrote:

Tutom: Excellent approach and thanks for the link ( I just found a free Fib tool - thanks to you!)

However, I disagree with your call.

Here's why

ENLARGE

Look where the Fib extension passes thru on the 3rd wave. Need I say any more!

Also I am not trying to be a smart-alec here - this was one of the first analysis I did - after GV introduced us to EWT and I learnt the linkages with Fibs ( I am a math guy) - and I had shared my spreadsheet with him.

Of course that doesn't mean S&P will not see a lower value ever - GV believes this one UP is a Corrective {2} in a larger bear  - I belive this one is a corrective {4} in a larger bear that started in 2000.

If he's right  - well I guess my daughter's college fund will be decimated - unless somehow I can short the {3} to kingdom come!

I am more optimistic.  

 

 

 

Report this comment
#25) On April 05, 2009 at 12:06 AM, crystlz (57.72) wrote:

Here goes. I have bought the book and I am going to attempt to post a chart that depicts the theory that I have been operating under for a few days. I realize that my trend lines and fib lines are a little off. If my count violates any rules please let me know. I would think I should be able to precisely label my tops and bottoms using the stockchart software but I haven't been able to do that yet.

peace to all

Enlarge

Report this comment
#26) On April 05, 2009 at 12:25 AM, anchak (99.86) wrote:

All right..... the S&P chart is flummoxing a lot of us - and hence I started this thought of trying to get independent understanding by taking a step back.

Historical Perspective
------------------------------------

You can learn from history. Taking on a blind template - and hoping future will play out - well that's a pipe dream! That was my point of illustrating with the 2002 bear that initial Up waves can have strange shapes....its only the 3rd wave where things fall in place.

Another illustration that history does rhyme - this bear 3rd wave was a classic hybrid of 1929 and 1987-88 - basically the depression crash impulse combined with program/trigger-happy trading ( that's the rationale given behind the Oct 1987  crash) - lot of people noticed this - especially my friend binve.

Independent Confirmation
===================

Came from a thought of Tastylunch. Nothing new - GV has said this before - especially with the Daq this time - that its playing out differently.

When I looked at the Nasdaq in 2002 - the confusion with Wave 1 up in S&P was not present in it. It was beaten down the most and made a steady recovery - much cleaner count.

Thus this leads to my thought of trying to do the same with the 2 leading sectors of this crisis

(i) Philadelphia Housing Index ( HGX)
(ii) KBW Banking Index ( BKX)

Other candidates are

(iii) CRB Commodity Index ( CBJ , I think)
(iv) and the Nasdaq - these 2 are coming out as Jim Rogers likes to call "relatively unimpaired"

I will start with the HGX which I think I was able to finish,.....

 

Background
--------------------

The count is different - and so is the timeframe. HGX peaked in Summer 2005 - yes 2005!. Infact there's a reason why you see a lot of top fools who joined in mid-2006 (CAPS started in summer of 2006) and had some exposure to the housing industry - went berserk in shorting homebuilders - and mortgage financing companies by extension. Homebuilders were being decimated  - amidst a rocking Bull market.

Anyway here's my stab at the count

ENLARGE 

Observations

(1) There's a double bottom! Very very clear - especially if the count holds.

(2) Fib's hold but since its double bottom - you can't choose which one. Basically you have to do that thru the construction of the waves.

Anyway - by the looks of it - the index is approaching some resistance ( its defintely overbought on all technical levels) - however there's an outside chance of it being in the 3rd Up wave already!

ENLARGE 

Its a little busy chart - but the Fibs are marked by the purple dotted lines. This index broke thru the 61.8 Fib decisively - twice in fact. And it has now used the 50 Fib as a support - the bottom White line. Resistance is the last peak ( top white) - and the question is whether it'll respect that or break thru.

Last chart

ENLARGE

The source of hope for the bears - the index clearly gave a A-B_C corrective ( the circled piece) - last time. And it could be in a corrective 2 - which would complete the count.

However - all there is left is a c - and that points to be retracing to the Mar 30 level - which is Fib 50.

Based on this ( This index has almost a 2 Beta ie 2x movement with S&P) - it points towards a possible 783-797 retrace range.

But the key thing to watch is whether it breaks above the previous top which would be very bullish

I will try to handle the BKX next - if any of you can do that - you are more than welcome.

Good night! 

 

 

 

 

 

 

 

 

Report this comment
#27) On April 05, 2009 at 12:58 AM, anchak (99.86) wrote:

I agree with TigerPack  here:

Asset price inflation is the key ( possibly only) tool - available to the governments now.  This is one key reason -at least on a nominal basis of stock market recovery - ie lot of cash chasing after fewer assets.

However , Tigerpack  - amongst the historical candidates chosen for comparison - with the exception of 1981 both 1975 and 2002 had 2 severe 61.8% retraces of 1st wave Up.

Here's the chart

Enlarge

What you are describing is GV/Elliots - Beauty to behold - Wave 3.

Dont think we are there yet - and since most of us dabble in leveraged positions ( I know you are big UYG guy) - a Wave 2 down of these kinds - are going to decimate your long-term investment.

Report this comment
#28) On April 05, 2009 at 1:08 AM, herztical (28.23) wrote:

Bvine

Thanks for the fav...I tell it like I see it for better or worse, no sugar coating; that's my mo.  I appreciate your narrowing of classes, but I agree the US needs to bal it (or at least convince people of narowing it).

I'm also with you on the inflation trade (my top sectores of ag, oil, and comod).  The U.S. will inflate and this makes me wonder why I even care about USD stocks?  I'm not alstry, but it seems counterintuitive to worry about a 20% move here or there when your overall PPP declines...are we striving for true wealth or relative wealth?  Again, a topic for another blog, but I would love to hear the academic conversation.

 Mark

yes, I'm selling naked puts (my opinion), but I still feel it is more risky then buying outright bc of the time element.  For traders sure, for investors take the stock and scale in...maybe you also capture a div. BTW, I got a div credit today and I have no clue where it came from (no ticker symbol)...money in the bank!

Report this comment
#29) On April 05, 2009 at 1:12 AM, herztical (28.23) wrote:

...and I'm here to keep all you TA guys in check and avoid groupthink!

Report this comment
#30) On April 05, 2009 at 9:52 AM, Londamania (60.63) wrote:

In World War I many of the generals on both sides, especially the French ones, were stuck with outmoded concepts of warfare that failed to account for the technological advances that had occurred and had drastically changed the playing field.  Most notably this was the machine gun, which quite simply allowed a few men to negate the mass charge tactics that had worked so well in the previous 100+ years of warfare (to lesser degress of effectivenesss culminating in WWI with completely ineffective).

Same happened in World War II and this time it was tanks and airpower and the tactics to use them.  Once again the French generals were fighting the last war and lost completely, despite having more men and better equipment including tanks.

The tried and true patterns of warfare that had served these commanders for so long simply failed them because they failed to account for the new playing field.

What does this have to do here?  Quite a lot in my opinion.  The op shows what most of us should know at this point - we just lived through a depression.  It's the same chart pattern.  So now we need to figure out what comes next.

But the playing field has changed.  As one poster has already stated, we are no longer a reserve currency.  The Fed can do all sorts of money games and not be tied to how much gold they have around.  This is the financial equivalent of the machine gun.

And we have a Fed Chairman who just happens to be a leading expert in - the great depression of all things.  He is intimately familiar with what was done wrong the last time, and is doing everything he can just about opposite to that this time around.  And he is paired (now) with a bunch of very smart and savvy people in the administration who are in the process of waging a very coordinated blitzkrieg on the economy.  With a staggering amount of money as their arsenal.  This is the equivalent of the blitzkrieg.

Whether you agree with the approach they are taking or not is immaterial.   I posit that to say that all this action will have no effect on the economy at all, and we are doomed to simply repeat the same pattern we did before because that's just the way things are, is I think "French General Thinking", and will end up with a lot of dead frenchmen (dollars either lost or lost opportunity).  The chart this time around from here on out is going to be different from the great depression period 1930 - 1933 - whether in the end that is a good different or a bad different will remain to be seen.  Maybe it will end up looking like some other chart from a different time period - say 1942-1943 perhaps to reflect all the government spend going on.  Keep an eye out for something like that as well.

.02 cents for your considerations :)

Report this comment
#31) On April 05, 2009 at 9:58 AM, binve (< 20) wrote:

herz,

......I tell it like I see it for better or worse, no sugar coating; that's my mo. ...

Seriously man, I appreciate that. That's the way I tend to operate / think too. So I tend to appreciate that quality :)

anchak,

Here is a 3 year and an 8 month chart of the BKX. I will work on the CRB next.



Enlarge



Enlarge
 

Report this comment
#32) On April 05, 2009 at 10:16 AM, binve (< 20) wrote:

Londamania, Excellent post! I agree with your observations.

My purpose in bringing up the 1929 charts is that the technical similarities are striking, but so are the psycological ones. 2000-2007 very similar to the roaring 20s. Easy credit and new financial instruments the ultimate cause to both eras run-up and ultimately collapses, etc.

But to paraphrase what you said: "this in not your grandparents depresssion".

I am not actually forecasting the S&P to go down to 1933 levels. After the initial crash in 1929, the Dow went from 380 down to 200. The great depression led the Dow from 200 down to about 40 (another 80% drop). So to clear I am not suggesting that the S&P go from 666 to 133 (another 80% drop).

And it is precisely because of your inflation oberservation. 

I wrote a blog a couple of weeks ago that I think you would enjoy: Technical Investing Themes: MacroTrends.... Please check it out. I talk about monetary policy, commodites, gold the market etc.

So I believe wholeheartedly that this is not the bottom. I think the S&P will go lower, but my estimates are somewhere in the 500s. But how does this fit with my "broad market PE of 6" statement. Because earnings will be inflated.

I think once the S&P hits the bottom in prices probably sometime next year, prices will go nowhere for a few years. In the meantime, the economy will be in the process of reparing inself. But at the same time the Fed and Treasury will be inflating the dollar into obliviion (well, not quite that bad). But inflation will be very high.

So this is why I have stated: "The only sector that I am truly bullish on is gold". I am extremely bullish on commodities and I own many. But commodities are tied to economic demand. And I still foresee that dropping. So while they are inflation hedges, they will not truly outperform because of the economy. But gold will be the true outperformer. It is the true inflation hedge.

Thanks for the comments!

Report this comment
#33) On April 05, 2009 at 10:40 AM, IIcx (< 20) wrote:

Gold headed to 680?

 

Report this comment
#34) On April 05, 2009 at 11:00 AM, amassafortune (29.57) wrote:

binve, You mention the panic of 1901, but take a look at the panic of 1907 for comparison. From top to bottom there was about a 50% loss. More striking is that the action of J.P. Morgan providing a cash infusion is similar to the Fed's and congress' actions today. The resulting "white knight V" could resemble the rhyme in market action today. In both cases, panic and fear of a depression quickly subsided after the massive infusion of cash. The 1908 recovery had two very strong rallys with 30%+ pull-backs, but after neither retest could approach the low point, the recovery V continued. As in 1907, investors today know disaster has been averted, but there will be a future price to be paid from the solution.    

Report this comment
#35) On April 05, 2009 at 11:11 AM, binve (< 20) wrote:

amassafortune, Thanks! Yeah, that is another very interesting comparison!

The bigger question (that I certainly don't have the answer to) is:

- Is this a panic?
- Is this the prelude to a depression?

I have my opinions. And I think we will get a comination of both. Actually comment #32 above is a pretty good indicator of my long term thoughts on the matter.

But going back to the short term, the question for the next 2-4 weeks is: Will we have a retest?

And based on all of the bears and all of the panics (1988 was a panic) the body of evidence is unclear. Some had significant pullbacks / retests within two months, some did not.

I tend to think that we do need a pullback, otherwise this rally will burn itself long before 1000. We are already overbought on a number of indicators in the middle of the first heavy resistance zone. But since the market doesn't listen to me :), I am just making my guess along with everyone else.

Thanks for the feedback, it is much appreciated!

Report this comment
#36) On April 05, 2009 at 11:31 AM, crystlz (57.72) wrote:

Thanks so much for all of the past bottoms research that you have all done in the past couple of days. On friday the thought occurred to me that researching past bottoms would make a lot of sense and what  has been brought forth is beyond what I could have imagined. I am going to post a wikipedia excerpt that may, perhaps, add to the ongoing discussion.

Occam's razor, also Ockham's razor,[1] is a principle attributed to the 14th-century English logician and Franciscan friar, William of Ockham. The principle states that the explanation of any phenomenon should make as few assumptions as possible, eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory. The principle is often expressed in Latin as the lex parsimoniae ("law of parsimony", "law of economy", or "law of succinctness"): entia non sunt multiplicanda praeter necessitatem, roughly translated as "entities must not be multiplied beyond necessity." An alternative version Pluralitas non est ponenda sine necessitate translates "plurality should not be posited without necessity." [2]

When multiple competing hypotheses are equal in other respects, the principle recommends selecting the hypothesis that introduces the fewest assumptions and postulates the fewest entities. It is in this sense that Occam's razor is usually understood.

Originally a tenet of the reductionist philosophy of nominalism, it is more often taken today as a heuristic maxim (rule of thumb) that advises economy, parsimony, or simplicity, often or especially in scientific theories. Here the same caveat applies to confounding topicality with mere simplicity. (A superficially simple phenomenon may have a complex mechanism behind it. A simple explanation would be simplistic if it failed to capture all the essential and relevant parts.

peace

 

 

Report this comment
#37) On April 05, 2009 at 12:39 PM, IIcx (< 20) wrote:

It probably just me but it feels like a complete stretch to compare today's markets to the 30's.

Population increases, increased demand, GDP, tech industries, inflation, world economy, etc. -- its a completely different world to the one that existed in the 30's.

Panic is likely washed out of the markets so the panic drops aren't very likely. No question we are over due for a couple of down days to correct the overbought condition and it's likely a retest will occur at some point.

This was projected to be a bathtub bottom so I'm still not convinced that we're about to enter the wave down to set a classic double bottom pattern like we saw in 2002-2003. But, I think GV did get it right and we saw the extent of any future dip in March.

If the news is accurate, we should see minor growth in the third quarter and are about to see the 150 day MA trend up. If the stimulus takes hold and they don't tax us to death, we might even see retail back in the black by the end of the year.

It's too early to tell but isn't it logical that we will trade within a 800-950 range to the en of the year?

Report this comment
#38) On April 05, 2009 at 1:02 PM, IIcx (< 20) wrote:

: ) take a look at the "Curse of the DOW" chart in this 2002 article for some fun

http://www.safehaven.com/article-267.htm  

Report this comment
#39) On April 05, 2009 at 1:03 PM, GoodVibe4Ever (< 20) wrote:

For those interested in past charts (which is very good thing):

Where do you think we are now if we assume that history repeat itself and playing the same as this chart?

DOW Old - Copy

Enlarge

The not annotated one:

DOW Old

Enlarge

Although I said it's a good thing to copmare past charts with current one for educational reasons, it's never good to trade based on them.

Everybody - I am happy that number of people are joining the chart school and I hope we will be ready soon with the class for those who are not there yet. I also hope those who posted on Market vibes to come back and update their charts and give their current thoughts of where are we going. I can discuss all your charts with you for no end but time is not giving me much luxury. You’re doing great discussing and navigating especially Binve who is like the chart terminator. :) Good job man especially when you said; "This [bear] is HIGHLY impulsive in nature". This is very important because this is not the end of the bear like the other bottoms. Even if it comes to be THE bottom on a chart that doesn't mean it's the end of the bear or the end of slump in the economy for sure.

If I see something that is very danger to believe in, chances are that I’ll mention it. 

Tutom - Thanks for your chart and the chart free service link. It's kinda cool. I will agree with anchak here. I don't see it coming the way you put. As long as 666 is holding we can't call for such thing. A lot of factors beside the Fib. ratios and number tell us that 5 of {1} is done with. 

#33 IIcx - Gold Video is EXACTLY my count and this is why I warned Sinch that a new low in gold and it will be a start of an ugly move DOWN. C wave should go below $680 and this is why I added short positions on that spike the other day. I hope Sinch is watching this video.

crystlz  - Congrats for your first chart. It's pretty correct. For the Fib. Numbers, currently no one of us really know where to put it! So take it easy on your self here. You started at a tough call. :) If your thinking that wave 3 of A started, then you must know that iii of 3 of A will be far higher than yours. 3 is never the shortest one and by the look of 1 and 2 (if they're done), then 3 must shoot high from here.

I hope this helped. It's not an advice or confirmation to your chart. Just telling you what is on your chart. I don't believe this is wave 3 (yet) even number of respected Elliott experts believe so. We always must think for ourselves because we put our money on the line not theirs. Sometimes right, sometimes wrong, but always honest.

PS. Nothing sexiest about it but are you one of the glory of creation, that is the fair sex? If yes, then welcome to the club, second only to Mary. Did you read my comment in the lounge? :)

Luke - Good try #201 on the other blog. keep at it. And thanks to mkrm in #203 for his kind and correct note to Luke.

Everybody - One more thing, if you noticed we had on Friday a contraction day where we narrowed the range between low and high than the previous sessions. These kind of days ALWAYS call for a LARGE move in the next day or two. Expect that to happen on Monday or Tuesday. It was confirmed by a small move in something called Maclellan Oscillator. It doesn't tell us which direction it will be but you know where are my bets.  

Note to all - Try to sharpen, simplify and narrow your analysis when you want to make a trade based on a chart but play with charts when you want to learn. Also remember not to relay ONLY on EWP. Like binve uses as many tools available in his disposal to predict the next move. It's a must. And Never wish the chart into your thinking! It won't work. Trade the chart even if you will come to be wrong. Trading your believes is an ugly business.

GoodVibe

Report this comment
#40) On April 05, 2009 at 1:22 PM, IIcx (< 20) wrote:

Great charts GV and my guess is that we haven't reached the 1st red circle yet.

I thought you'd get a kick out of Roy's vid - you called gold down to this level long ago.

Report this comment
#41) On April 05, 2009 at 4:43 PM, anchak (99.86) wrote:

I think this is turning out to be such a fascinating and valuable exercise.......

binve: Outstanding work as usual! However, I am not sure about the BKX larger count - there are some elements in it which I am not able to reconcile. 

Here's my Banking Index analysis:

First let me show how I tend to approach these things ( you can see one example of how I disagreed with Tutom's 3/5 count on S&P 500) - using Fibs as my secondary weapon, the first being the count - but its usually not uniquely resolvable.

The first 2 waves on BKX were fairly easy to count. Thus I use Wave 1 and Fibs to see a possibly clue for 3

ENLARGE

See where the bottom most Fib extension line passes thru?

Its a freakishly motive impluse wave - but then again this index is the epicenter of the crisis.

Now comes a very very interesting observation - do not know what to make of it - except take a slightly bullish stance.

 

ENLARGE

I am counting a 5th truncation on the BKX ( Yes its a daily chart - but this is a multiyear crisis - the granularity should hold)

There is some reason to justify it based on the gigantic 3!

Now just to ensure that we aren't off base and this could mean another wave 5 down :

(a) The up-wave has covered the last down sub-wave completely ie v of 5. Thus if there is a down cycle -this is just wave ii of 5 with a Full motive iii left - possibly but unlikely
(b) Fib support levels:

ENLARGE

The last bottom of BKX  was a TRIPLE support level as far as  Fibs are concerned. Look at what I did - I essentially took the 3 motive components ( i , iii, v) of the monster 3 and drew extensions of each - there's a support from each at this bottom. AND YES YOU COULD HAVE KNOWN THIS IN ADVANCE! Of course you are never sure whether the market will respect that or not.

Hope that approach added value to your thinking!

Now moving on. Take a look at the recent charts

Daily

ENLARGE

Hourly

ENLARGE 

I am counting a current a-b-c corrective pattern with a clear completion of 1.

The index is in a very very important channel. Its bounded below by 2 Fib levels which are support - both points a and c were on this line. While its flirting with resistance at the top - which also is another Fib retracement level.

Taking a step back and trying to triangulate this :

ENLARGE

The bottom resistance line (around a/c) is another TRIPLE Fib convergence - this would be around a 20% correction from here if it happened

On the top there's strong resistance at the white line ( top established from the corrective 5 iv) and 2 Fib levels - this is about a 6-7% up move from here.

This is the corresponding Hourly chart

ENLARGE 

Current Thesis
==============

Its not very clear unfortunately

The bear case: You expect an expanded flat with an a-b-c-d-e in which case we just completed d and it'll go down to retest a/c. I think its safe to assume this is the level - the amount of support is good and the count will point to a 3 wave at any time.

You do not want to be in front of the bulldozer to quote GV ahead of a 3.

The bull case: This can easily drift up another 5-7% without much resistance - but if it does - I think it will strongly point to a 3 and not an expanding 2. Because in which case it would establish 2 higher highs in a corrective down pattern - which I find very difficult to digest. Thus if it goes up from here , the next corrective will use this current level as support - and we are I guess all agreeing on a possible 3 unfold at any time.

Well it would be interesting to see how it actually unfolds. 

Report this comment
#42) On April 05, 2009 at 6:59 PM, binve (< 20) wrote:

All,

Sorry haven't read anything here for a few hours and don't really have time to right now. I was thinking about the move since March. So I threw together a quick chart and wanted to put up another variation.

DO NOT USE THIS CHART. FOR STUDY ONLY.

Also you see I have a [3] down there instead of a [5]. Ignore that for right now. I am still thinking about that issue.

What is important is the characterization of the middle corrective structure. It is really confusing and is not a clear Wave {2} by itself. I really did no meaningful retractment compared to the move of Wave (3).

But in this context, it might make more sense.

Take a look, and tell me if you think I am full of beans :)



Enlarge

Report this comment
#43) On April 05, 2009 at 7:31 PM, binve (< 20) wrote:

All,

Just a few more thoughts:

Wave 2s usually have zigzags
Wave 4s usually have flats

A big problem with saying we are in wave 3 now is that you would have a flat in Wave 2. Not impossible, but not likely.

Also if we are in Wave 3, wave 3 is shaping up to be much weaker than wave 1. Again, not impossible, but not typical. The structure since March 29th looks like a 1-2-3-4. Based on the triangle formation from the last two trading days, that definitely looks like a 4. 

I am very skeptical that it could be labeled as a 1-2, 1-2.

The third piece of evidence is that we are in the middle of a resistance zone on the daily chart, daily techinicals are overbought, and if you look at the chart above, the hourly technicals are sporting bearish divergence.

These are just observations / food for thought.

Report this comment
#44) On April 05, 2009 at 8:15 PM, anchak (99.86) wrote:

OK...hopefully last one for the day.....started with the Nasdaq.... I really didn't realize that the Daq actually bottomed on Mar 10th instead of Mar 9th......Opens up the count.....

ENLARGE

Looks like close to completion of a 5th....given this is an hourly chart - shoudl resolve tomorrow early.

Also the data shows so much gap in this index - unbelievable - asking to be filled.

Again....retrace is close to the Mar 30th level.

 

Report this comment
#45) On April 05, 2009 at 9:00 PM, IIcx (< 20) wrote:

Man this is addictive - I've been sitting here comparing the last chart in #1 to #44 and have to admit the similarities are strikingly logical. We're about to set the first "red circle" and drift down a bit for a day or two to set the head and shoulders. Driving up from there into a trading range is also logical.

The really disturbing part is the projected deep retest. Oddly, I've heard a couple of news mentions about a possible retest in September. They probably figure September is usually tough on stocks and is as good a time as any.

binve, shouldn't the [3] in the #42 chart be a [1]? We completed 5 down on the March 9th S&P.

Report this comment
#46) On April 05, 2009 at 9:29 PM, IIcx (< 20) wrote:

Interesting points in #42 binve.

This week needs to resolve 5 and set [2] before we can drift down to set a head and shoulders with [3] and back up to the flats for [4]?

Based on viewing Roy's vids, the trends like to cover chart gaps and there are several of them. Monday should be a very choppy trading day to pay all this off.

Report this comment
#47) On April 05, 2009 at 10:47 PM, mistermiranga (98.22) wrote:

#44 and #46...the gap covering concept fascinates me...it will be very interesting to see how all of this gets "resolved."

following and playing along over these past couple of months is really giving me an appreciation of how important the role of time frame plays and how hard it can be to see both sides of the trade once a position is taken.

 good work here...   

 

 

Report this comment
#48) On April 06, 2009 at 12:04 AM, arboretum (28.61) wrote:

I am late to this conversation, but fascinated by it. I would like to add a couple of points, hope these are relevant:

Current market conditions: Has anyone looked at the PVO lately? Volume shows strong confirmation of the current rally (unlike the Santa one) on a weekly chart. On a daily chart though volume is starting to take a dive. Again, more confirmation we are due for a big move early next week. I am with those who think it is most likely to be down, but hang onto your hats / stops for a spike first.

Historical comparisons - I got a bit verbose on this so moved it to my blog.

Report this comment
#49) On April 06, 2009 at 1:24 AM, binve (< 20) wrote:

All,

Okay, after some more deliberation and consideration, looking at all of the evidence of the current rally, historical comparisons, I will make this comment / post as my preferred count.

What this means:
- This is a seasoned TA trader's (but realtive EW newbie's) take on the rally
- All EW analysts (and TA analysts for that matter) must come up with what they believe is the most likely scenario for trading purposes. In EW parlance, this is the "preferred count".

What this does NOT mean:
- This is not a prognostication of any form. Absolutely nobody has a crystal ball.
- This is not a strict play-by-play, this is my preferred count based on the price action so far, analysis of current possible wave interpretations, Fundamental Analysis, and a certain amount of gut feeling
- This is not investment advice. This is simply me sharing how the next few weeks might play out. DO NOT TRADE BASED OFF THIS POST.

That out of the way, lets get to the fun stuff.

First, I will talk about what I think this rally will NOT do. I am doing this puposefully so that you can see why I am coming up with an alternative count. Basically the discussion largely boil down to two basic premises: Camp 1) Rally continues from here to 1000, Camp 2) Rally pullsback, consolidates, and then moves to 1000. There are several nuances and variations, but these are the two basic thoughts.

Camp 1: Rally to 1000 from here



Enlarge

Why I think this will not happen:

1. Huge resistance zone from 830-870

2. Rally has run right into that resistance with no significant pullback after a HUGE run up (>25%)

3. Daily indicators are overbought (Full and Slow Stochastics especially)

4. Hourly indicators are showing bearish divergence (RSI, TRIX, MACD, and Stochastics)

5. Breadth is decreasing, not increasing. Finanicals rallied the most (58%) but as the S&P climbed from 800 to 840, Financials (via XLF) has stayed below the same level acheived on Apr 19

6. Euphoria is too high. There are lots of bulls and lots of bears right now, but the bulls are bullish on "bull". No fundamentals are driving this rally and the bulls are pointing to economic numbers that were not unexpected and frankly not that impressive

7. A real sustainable rally will come from a retest that does not go below the lows, and all of the gun-shy players on the sidelines will have the confidence to jump in

EW factors:

8. Wave 1 (per the chart above) was a 160 point move

9. Wave 3 is shaping up to be much less impressive move. Remember, Wave 3 is typically the longest and NEVER the shortest. Per the current Wave count for 3 above, we are already in 1-2-3-4 of 1-2-3-4-5. Wave {iv} is in. In have checked is on a 5 minute chart and it is a very obvious 3-3-5 flat (I can provide a chart if necessary). Flats usually occur in Wave 4. I would be very skeptical of anybody trying to call the current count for Wave 3 as 1-2, 1-2. So in order for Wave 3 to be at least as long as Wave 1, (Wave 3 is currently 60 points long) Wave {v} of 3 will have to be 100 points!!!! This would be a massively extended 5th wave which is highly unlikely to say the least

10. Games can now be played with making Wave 3 < Wave 1 but longer than Wave 5, but it just strikes me as unlikely. I think the analysis below will show a more uncomplicated approach.

11. The only way to label the correction in the current rally (Wave 2) is as an expanded flat. This is a poor call for 2 reasons
a) Flats typically occur in Wave 4s not Wave 2s
b) And expanded flat is an expression of a very bearish correction. And up until now, the move has been very bullish (Wave 1 was extremely strong).

So this is my body of evidence against the current rally going much longer. 

Here is my proposed alternative preferred wave count:



Enlarge

Why I think this wavecount make more sense:

1. Per the daily and hourly indicators mentioned above, I believe (outside of EW) that this rally will end soon.

2. The is a much more "natural" fit for the data

3. Notice the discussion regarding Wave 4 above. This corrective structure is a 3-3-5 flat and its proper place is in a wave 4. This also make sense after the 9-wave move from 666 to 805. This was a huge move with lots of energy and a running flat fits the description for the expected correction. The description is almost perfect (pp. 46-48). The B wave in the flat is a very obvious 3 (not a 5).

4. This scenario jives with my "gut feeling" regarding points 6 and 7 above.

5. This in my mind is a much more bullish interpretation. If the rally goes on from here it will be extremely overbought. But if it pullback as shown in the chart above, then after the wave B pullback the new wave will be a very powerful zigzag C wave. These are extremely powerful waves. This jives with my expectation of a very significant technical rally.

6. As one other piece, see below of a possible massive reverse head and shoulders setup. This further reinforces my massive technical rally expectations.



Enlarge

So that is my case for my preferred count call. I am not trying to covince anbody to do anything with their money. I am simply exploring the technical picture and sharing my thoughts on the matter. I am also not trying to convice other analysts to abandon whatever convictions they have, I am simply offering mine.

Please disagree. In fact I would personally benefit (and I am sure others would too) from other viewpoints. I only ask that you offer up concrete rebuttals or well thought out interpreations of the alternatives. "You stink", while perhaps accurate, is not appropriate :)

Unfotunately I will be out-of-pocket for most of tomorrow, but I would love to hear thoughts on this. I will answer questions when I can. Thanks!

Report this comment
#50) On April 06, 2009 at 7:03 AM, mark91055 (< 20) wrote:

Binv,  I agree witht he houly 1,2,3,4,5 that should be completed this morning as the world markets are up. 

GV- I agree with you that this relatively speaking side ways actions is a set up for a larger move.  The Volitility should continue to increase short term which means options have their best chance of returns.

Remember if you use options you only need to risk about 10%  of the money you have to risk when buying the equity outright so don't be tempted to use your whole bankroll..that is extreme leverage and will get you in the same trouble as the banks that used it.  Options if used correctly are quite safe..instead of having to set appropriate stops to limit risk the options expire worthless if you choose wrong and your risk is only the small amount per share you used to but it. 

Report this comment
#51) On April 06, 2009 at 7:34 AM, IIcx (< 20) wrote:

6. Euphoria is too high. There are lots of bulls and lots of bears right now, but the bulls are bullish on "bull". No fundamentals are driving this rally and the bulls are pointing to economic numbers that were not unexpected and frankly not that impressive

I couldn't agree more but the correction simply brought us back to the bottom seen in 2002-2003. Projected valuations, the stimulus, and the "worst news is over" triggered the rally.

I think your last 2 charts are the most likely projection, I just don't think we're going to see a retest until the consequence of the stimulus becomes fact which also happens to follow the last chart GV posted in #1 short of buying into waiting 3 years to see the retest. 

Report this comment
#52) On April 06, 2009 at 10:10 AM, columbia1 wrote:

Binve, you have out done yourself, I see no scenarios you have not covered over the week-end, I do like the look of the possibility were might be in wave 5 of A, it fits the charts nicely. Your  understanding of TA has gave you a huge advantage in quickly learning and interpreting EW. It makes me want to spend more time on learning the basic TA to balance it all out!!

Report this comment
#53) On April 06, 2009 at 10:25 AM, kstarich (30.60) wrote:

Binve

Pretty incredible the work you have done in such a short time.  I don't have my book yet :-( but I hope to do a chart soon.

Thanks for all you do!

Report this comment
#54) On April 06, 2009 at 11:32 AM, RussWild (< 20) wrote:

Binve~ Nice work bro. I'm pretty much at the 2 year chart at this point which I have the same count as you. 1 of A or A. then down to the fib. numbers. I'm full SDS still (for lack of options) and going to see the larger pattern breakdown.

As far as the 3mo- 15 day charts, I'm about 50% on the bears options 1.) up a little more up to conclude wave 5 (expanded diagonal or large wave 4). or 2.) wave 5 is already done and we are going lower now.

As for the major bull arguement I just don't see it, but I don't put much wait on the overbought indicators as much (short-term). When wave 3 (the official wave 3 kicks in) we will have overbought conditions lasting week(s)).

Great job everyone!

Report this comment
#55) On April 06, 2009 at 11:33 AM, crystlz (57.72) wrote:

Binve

I too, want to acknowledge your work. Your 2nd chart really seems to be an elegant solution to our current spot in time. BTW my EWP book just arrived and I am anxious to start working with it. I know that EWP is just one tool of many in TA but  having seen how the waves unfold it is hard not to be hooked.

peace 

Report this comment
#56) On April 06, 2009 at 11:35 AM, DanDarby (< 20) wrote:

Another frustrating day so far... Here is an updated 5 min chart. I now have it ending in a truncated {5}.

I see another possible move up after the {C} is completed, maybe turnaround tuesday? If we do move up, I don't really see it making a difference though unless it is a very dramatic move up (which I don't see personally). We could still be in wave 1 or 3.

Russ, binve, GV others... Is this count valid?


Enlarge

Report this comment
#57) On April 06, 2009 at 11:45 AM, anchak (99.86) wrote:

DanDarby:

The way I resolved this ( especially use the Daq alongwith S&P) - your (iv) should be an A-B-C corrective and thus end at (a).

And this will push (v) based on a clear 1-2,1-2 with a 5 count at your (b).

Thus this is just completion of 1 of {1} and begin 2.

Hope that made sense!

Report this comment
#58) On April 06, 2009 at 11:50 AM, beyondanonda (24.46) wrote:

Binve,

Thanks for the 2 options you mention in #49 above (and, by the way, nice work) and while I lean toward option 1 (3 up) I have looked at a third scenerio that is similar to your preferred count, in that we are still in wave 2 but we have actually completed wave A on march 30 followed by wave B and now are in Wave C which would go down to as low as 775 or so and then 3 would start up.   S&P 826'ish has really been strong support this AM but if we break below it we could go down bit. I hope to post chart (been practicing) tomorrow.  The good news is that all of these views show a window of opportunity over the next couple of months and I will be buying into this pull back (still short gold and silver)

Report this comment
#59) On April 06, 2009 at 12:43 PM, binve (< 20) wrote:

All,

Crazy morning, very busy. I will take a few minutes to respond here all great comments!

GoodVibe,

Regarding comment #39: Thanks!. Chart Terminator. LOL! I love it! And the title of this post is "Technical Analysis Unleashed", and in a lot of ways that is true for me for EW. I have been breathing this stuff for the last 2 months but only really felt confident with the charts in the last 2 weeks. But it is awesome! I love it, Thank you.

mark91055

Yeah, that looks to be the case. Interesting how it worked out. If it is true then Wave 5 of 5 of (5) is truncated. A littel surprsing but doesn not violate any rules. I just did the math quickly, and I was expecting a move for Wave 5 that was 0.618xWave 3. As it turns out, calling the top at 842 is almost extactly 0.500xWave3. Another valid Fibonacci number. And yet another indication that this rally has run out of steam. Thanks!

llcx,

Hey! Thanks! But regarding this ....

I think your last 2 charts are the most likely projection, I just don't think we're going to see a retest until the consequence of the stimulus becomes fact which also happens to follow the last chart GV posted in #1 short of buying into waiting 3 years to see the retest.

.... I am not quite sure what you mean regarding the time frames, could you clarify?

columbia,

Wow Thanks! Yeah, all of the other options were becoming too complicated, so I wanted to rethink and simplify. It just seems like a better fit. So far it the market is responding like Wave 1 ended, but I think it is "mostly" definitive. I have a chart below.

Also, thanks on the compliment. Yeah EW is awesome. And it is best to use all of these as complementary tools. No one is more important. But doing an analysis with one and ignoring the signs from the others is a recipe for disaster (IMO). Thanks!

kstarich

Hey kstar! Thanks! I cannot wait to see a chart come from you, that will be awesome!

Russ

Thanks man! I was thinking about the expanded ending diagonal for a long time. And while it is certainly possible, I didn't like it because it was too complicated. I wanted to find something simpler. 

This is an interesting statement and I would like to share my thoughts:

As for the major bull arguement I just don't see it, but I don't put much wait on the overbought indicators as much (short-term). When wave 3 (the official wave 3 kicks in) we will have overbought conditions lasting week(s)).

Here is the way I see it.

Right now the market is skittish that this is the bottom. This being the case, overbought means A LOT. But if we go down / retest / and don't go lower, then confidence will build, sidelines money will come in, and euphoria will become mania. When that happens overbought will not mean anything. But I never believed we got to that point, which is why I have been harping on it for the last 2 weeks :) I don't know if I am right or wrong, that is just my take :)

crystlz

Wow, thanks! I really appreciate that. But I really appreciate your earlier Occam's Razor post. That really kicked my brain into overdrive. It was the catalyst for me to try and find a simpler pattern. So Thank You!.

DanDarby,

Hey man! I am very confused by your chart and am not following. Can you post 2 charts? One from March 6 with the larger waves identified, and then your smaller one of the last few days with the smaller waves? Something seems off.

beyondanonda,

Hey!  Thanks I appreciate that!

I have looked at a third scenerio that is similar to your preferred count, in that we are still in wave 2 but we have actually completed wave A on march 30 followed by wave B and now are in Wave C which would go down to as low as 775 or so and then 3 would start up.

Interesting! I can't wait to see the chart!

Everybody,

Here is my take on the days action so far. We broke the last 4 wave. This looks like a new trend. Which means we have a truncated 5th (see my comment to Mark above).



Enlarge

 

 

Report this comment
#60) On April 06, 2009 at 1:12 PM, RussWild (< 20) wrote:

On a side note. Looking at the 6mo VIX chart. We are getting to the end where somthing big is going to happen. Support/resistance must break soon! Crazy times!

 VIX

Enlarge

Mr. Green (aka binve) ~ I agree with your comment about the overbought condition. It feels as if we need a major pull back to sustain the new wave 3 long.

Report this comment
#61) On April 06, 2009 at 1:16 PM, tahoestock (30.14) wrote:

binve…have been fascinated watching you work through your analysis for the last week; it’s like being let in to a person’s thought process.  Thanks for the transparency.  My count is similar – I have (1) and (2) in different spots; (3) and (4) the same; and still open on wave 3 of (5) of A.  And while we may both be right or wrong, the good thing about EW is the added confidence it brings for directional trading (at least for me):  A or (1), B or (2), it almost doesn’t matter (depending on the time frame, of course) as long as the major wave is correct.  I’m sure I speak for many who do not respond to your posts but are watching and learning (as I do), thanks for allowing us to look over your shoulder!

Report this comment
#62) On April 06, 2009 at 1:52 PM, binve (< 20) wrote:

Russ,

I agree with your comment about the overbought condition. It feels as if we need a major pull back to sustain the new wave 3 long.

I completely agree man.

And just because I am feeling particularly corny right now:

- You call me Mr. Green
- GV called me the chart Terminator.

So thinking along the Schwarzenegger lines. Do you remember Hans and Frans from Saturday Night Live (Dana Carvey and Kevin Nealon)? Think about them when I write this:

I am going to clean (clap) you up. 

... I know I am a dork :)

tahoestock

Wow Man, thanks! 

... watching you work through your analysis for the last week; it’s like being let in to a person’s thought process.  Thanks for the transparency. ...

Absolutely. That is sort of my teaching method. Except (which is the bizarre way to think of it), I am not teaching others, I am teaching myself. Thinking about something gives you one level of understanding. But when you write it down, if forces you to be much more focused and analytical. So I personally get a lot more benefit from that. And what is nice is that I can share it on Caps and hopefully others get benefit from it too. :)

Thanks for the kinds words and support. It is truly appreciated!

Report this comment
#63) On April 06, 2009 at 5:40 PM, binve (< 20) wrote:

All,

Here is an update for my preferred count. I was thinking this morning and wrote above that there was a truncated fifth. I think that was a headfake.

I think tahoestock is nailing this one. We were in a Wave 4 of (5) continuation most of the day. Look at the updated chart below. What is beautiful about this is the fractal replication at the smaller degree. Wave (2) was simple and (4) was complex (flat). This is the same for Waves 2/(5) and 4/(5): Wave 2/(5) is simple and (4)/5 is complex (flat).

I think the move burned off just enough overbought to make its last gasp at a fifth wave completion (all for Turnaround Tuesday) :). I think this also fits very nicely with GoodVibes MacClellan Oscillator observation / big move theory. 

Again, the are just my thoughts and I am sharing. USE THIS CHART FOR STUDY PURPOSES ONLY.

Thoughts?



Enlarge

Report this comment
#64) On April 06, 2009 at 6:03 PM, innerflame (< 20) wrote:

For what it's worth Binve- that makes perfect sense to me.

So is it time to buy oil yet? It dropped today but there are so many conflicting opinions out there- and I never forget how much the price is manipulated by Big Boyz.

Tomorrow is another day...

Report this comment
#65) On April 06, 2009 at 6:12 PM, binve (< 20) wrote:

Hey flame!

Regarding oil, I am still waiting. Coming down to $48 was a step in the right direction, but then it move right back up to $51. It was not enough of a pullback for me. For what its worth, I am still waiting. :)

Report this comment
#66) On April 06, 2009 at 6:22 PM, RussWild (< 20) wrote:

Not a bad count our Mr. Cleaninator...hehe I would not be shocked for a fast pop up to conclude (5) then a fast fall on very heavy volume.

I can almost see the morning headlines now. “Market fluctuates on mixed quarterly earnings and economic worries”

Could you imagine a headline like this instead:

“Conclusion of the first series of waves [wave (5) of 1 of A] was achieved according to a leaping majority of stock analysts this AM, turning to the downside for a race to the first fib. retrace line of 38.2% from this mornings high. 65% of the stocks analysts state that we will hit or pass the 61.8% retrace before concluding wave 2 (click here to read more)...... "

LOL

Report this comment
#67) On April 06, 2009 at 6:32 PM, binve (< 20) wrote:

Russ, LOL! That was awesome! We could have a series of those: "What if Elliott Wave Practitoners ran the newspapers" :)

Report this comment
#68) On April 06, 2009 at 6:52 PM, PrestonCheek (31.05) wrote:

Hey guy's I'm sitting on the side of the interstate on my Verizon card and I had to comment at least once.

Sorry I haven't hjad the time to work with you all like I thought I would have, truth is between work and family I'm snowed under. Building schedules for possible work and planting sod in my yard, etc, etc.

Anyways I hope everybody is doing grerat and I'm reading the book and still practicing when I can.

Good luck all.

Preston

Report this comment
#69) On April 06, 2009 at 9:07 PM, beyondanonda (24.46) wrote:

This is very basic first chart for me, which shows which way I'm leaning.  I'm not real excited about the apparent slowing momentum but since gold is still sinking (and I remain short there) and these wave counts make sense I am still pulling for a completed wave v up soon

Enlarge

Report this comment
#70) On April 06, 2009 at 9:56 PM, RussWild (< 20) wrote:

~PrestonCheek - Hey bud, thanks for checking in. You should do that in the lounge area as an FYI, but I hear ya. It's hard to take on a new passion in life when you have so many already.

Beyond~ great job bud! Keep going. Just posting is the largest step!

Report this comment
#71) On April 06, 2009 at 9:59 PM, crystlz (57.72) wrote:

I took a shot at the DAQ here. Since I'm looking for an entry point this chart will be the chart I trade if Mr Market goes in this direction.

I'm off to start studying the book that arrived at the shack today. 

peace

ENLARGE 

Report this comment
#72) On April 06, 2009 at 10:13 PM, binve (< 20) wrote:

Preston,

Take care out there man!

beyond,

Is this your alternate count that you were talking about eariler? That is a very interesting interpretation. Man, I love all the different ideas!

crystlz,

Nice chart! I like very much that both you and anchak are looking at the NASDAQ. I watch the S&P and XLF mostly (I have made a few XLF posts, but not too many). Things look to be coming to a head in the DAQ too. Very interesting.

Thanks for the work, the kind words, and different perspective (like I was saying before, that Occam's Razor post could not have been better timed for me). You are now one of my new faves :) Thanks!

Report this comment
#73) On April 06, 2009 at 10:38 PM, ekramer17 (< 20) wrote:

Binve, what can I say that hasn't already been said?  That is outstanding work that you've been doing...not only exhaustively comprehensive, but incredibly accessible as well.  A big thank you to you!

Another reason your count makes sense to me is because the "primary guideline is that corrections ... tend to register their maximum retracement within the span of travel of the previous fourth wave of one lesser degree, most commonly near the level of its terminus." (p.64)

Wave 4 of minor wave 1, according to your current count, spans the range 750 - 775.  Should wave 5 inch up from here, that would bring the.618 retracement ever closer to that 750 mark, which would strengthen its case as the level of retracement on pullback.  Just something to watch.

Report this comment
#74) On April 06, 2009 at 10:56 PM, anchak (99.86) wrote:

I need some opinion on this index - another important one and its a puzzle - US REIT INDEX

ENLARGE

Report this comment
#75) On April 06, 2009 at 11:24 PM, GoodVibe4Ever (< 20) wrote:

binve - McClellan Oscillator is not a theory, it’s very reliable technical indicator. Did I tell you how awesom you've been in the last couple days? Here's one more!

Flame – Didn’t you own oil before when you asked me for the charts and I give you some charts and told you these might let you sleep better? Remember? I never sold a share of my oil since I called the oil bottom in the mid 30s. That was around the same time or little bit later.

Russ #66 – That’s flat out fun!

Beyond – Good start! Welcome to the club. A very good count can be found in the video above. #33

Crystlz – You rock! WOW! Just move the Fib tool to whatever will be top to get the correct retracement levels. But lady! You’re awesome! And don't delete your charts! :) Oh! We're watching. People can learn from our mistakes.

anchak - Do you want a count or what?

I think we seem to agree that binve's chart is the most reliable count. So, I don't see a reason to post any charts of mine or update Market Vibes. The other chart is wave 3 and we know how this will turn be. Tomorrow is the day! If anything changes, I will sure come to tell you.

I will only ask you to expect the unexpected. Never fight the tape if it goes against your plan. If you have a plan, you can do anything as long as you are disciplined.

Thanks everybody for your work, thoughts, and positive energy. Keep up the good work. Have a good night.

GoodVibe

Report this comment
#76) On April 07, 2009 at 12:07 AM, binve (< 20) wrote:

GoodVibe: LOL! Of course, I didn't mean to call the McClellan Oscillator a "theory". But based on how I wrote it, I can see how you took it that way :) I agree, it is a very useful technical indicator.

What I mean was that based on how the last two days compressed, you are saying that we will have a big move tomorrow. That is the "theory". I was simply being loose with the vocabulary :)

Thanks for the compliments. I really means a lot!

Report this comment
#77) On April 07, 2009 at 12:27 AM, beyondanonda (24.46) wrote:

Binve

"is this your alternate count that you were talking about eariler? That is a very interesting interpretation"

Yes, these are the two scenerios that made sense to me (although since you and GV have quite a different count I will likely have to slide mine back into the training drawer) If todays (Mondays) lows get taken out tomorrow then my count would show us in wave C of 2 heading down rather than wave v of 3 going up.  Perhaps we end up at the same place even if our micro counts are different.  Thanks for your help

Report this comment
#78) On April 07, 2009 at 12:33 AM, binve (< 20) wrote:

cabot,

Wow thanks man! Absolutely, it is my pleasure. I am surprised I haven't been scolded for hogging the blog :) But seriously, I appreciate the compliment.

Wave 4 of minor wave 1, according to your current count, spans the range 750 - 775.  Should wave 5 inch up from here, that would bring the.618 retracement ever closer to that 750 mark, which would strengthen its case as the level of retracement on pullback.  Just something to watch.

It just "seems" like a really natural fit. I think the pattern wants to come down there. But like GV says, expect the unexpected :) Tomorrow should be fun :) Thanks!

Report this comment
#79) On April 07, 2009 at 12:37 AM, binve (< 20) wrote:

beyond,

Perhaps we end up at the same place even if our micro counts are different.  Thanks for your help

This is a beatiful statement. Because if different counts are feasible, then that means there is a certain amount of basic commonality. And that means similar retracements in some cases. The beauty of the Fibonacci sequence and fractals is quite an amazing thing!

I am very appreciative that you are holding a different count. I love the diversity of opinion! Thanks!

Report this comment
#80) On April 07, 2009 at 12:42 AM, RussWild (< 20) wrote:

GV~ I have to ask, if Mr. green has the right count where we are in 4 of 5.. and I like that count a lot.. you had some pretty hard numbers at the 850 number. Are you going to see wave 5 true and hold or call it quits and let go of more of those short positions?... I'm still holding true on SDS regardless. I have no stops and going to see wave 2 for what it is.... Just curious?

Report this comment
#81) On April 07, 2009 at 1:27 AM, GoodVibe4Ever (< 20) wrote:

beyond - yours could be the right. Guys, forget about the very small trees here. It's very simple.

1. Today's low get broken, then we are in wave C of 2 or a start of 2.

2. We top the high, then chances are great we are in wave 3

3. If we do the above but then roll over and break the lows, so we back to 2.

Until one of these three scenarios happen, don't get confuse yourself with where we are now because really no one of us know.  Once one scenario plays out, I will give you the most probable two scenarios. Until then, focus if you have trades at hand. If you're just learning, then indulge with the count.

Numbers to watch: 865 - 853 - 845.61 - 822.79 - 810.48 - 779 - 770 

The good news for you guys to show you all how far did you advance.. EWI JUST TONIGHT, made our second expanded flat an alternative count to their previous only original wave 3 count. :) That put a big smile on my face knowing that we said it far before them. Dare to say since March 23!Not only from me but from many of us. You all know your names so you should be proud of what you did (even if this might not reward you this time). I wish all of us will get rewarded for it. If not, live and learn!

Russ - I've been trying in the last week to use dips to rebalance my short exposure including today. Though I am not happy with my performance in that too. Also, remember I have long positions in oil and energy against short G.S.M. and the rest of my positions are different than yours with different time frames and more fire power that can sustain me. You have a small capital and you must preserve if you see that they are running over you with no come back to your entry level. That will depend on your thinking and count. Just don't panic! Good traders know how to make money but great traders know how to take a loss. 

Also remember if I tell you what to do with SDS, I will tell everyone reading this and I don't want people to depend on me especially after you read some of the things on my last blog. It's time for everyone to trust their work and take decisions. I communicated what I will do and this is the best I can say about that. I know you will understand. Best!

GoodVibe  

Report this comment
#82) On April 07, 2009 at 1:29 AM, GoodVibe4Ever (< 20) wrote:

And Russ - DO NOT LIKE A COUNT! Don't wish into the chart. TRADE THE CHART not your believe, wishes, or liking.

You've been forwarned. :)

Have a good night everybody!

GoodVibe

Report this comment
#83) On April 07, 2009 at 2:28 AM, RussWild (< 20) wrote:

GV~ your like my guarding angle, I love it. I can almost feel your hesitation and desire to tell me things in an open forum… You think I will take things in gospel format. Don’t worry brother; I’m already too stubborn in my own way of thinking to be moved even by you completely…lol My position was claimed a couple of blog’s before. 

I’m holding true to the 3-month chart that the daily count is nothing as to the nature of any motive rally will have a retrace regardless of the daily chart. I “like” binve chart and I also like the expanded diagonal chart as well, but the moral of the story is that we have a motive wave that needs retracement….. and I’ll hold that as my position….

The real question is that when do we officially conclude wave 2,,, and that is up for debate.. that is my overall short position changes to bear to bull when “what” happens. Being all or nothing I’ll wait until the 3 month chart is clearly broken to take the loss… and go long…. It’s just my play..

Report this comment
#84) On April 07, 2009 at 10:31 AM, crystlz (57.72) wrote:

The vix gapped up and is at about 42

peace 

Report this comment
#85) On April 07, 2009 at 10:46 AM, IIcx (< 20) wrote:

Post holiday rally next week:  http://www.cnbc.com/id/30085897 

Possible Weds. Uptick restoration by SEC: http://www.cnbc.com/id/30083434 

Report this comment
#86) On April 07, 2009 at 11:02 AM, runningin777 (< 20) wrote:

Russ / Binve / anyone -

What do you all think of posting some blank SPX charts for the rest of us to practice on?  Like:

- 1 month (60min)

- 2 year (daily)

- 1 week (5min)

Runningin

 

Report this comment
#87) On April 07, 2009 at 12:16 PM, Guntorius (< 20) wrote:

according to binve's preferred count chart comment #49, second chart, if the chart is correct, we should hit (c) B (the last retracement b/f we go up according to the chart) towards the end of april?

 

reply would be appreciated!  thanks!

Report this comment
#88) On April 07, 2009 at 12:47 PM, RussWild (< 20) wrote:

Running www.stockcharts.com Have at it!

Report this comment
#89) On April 07, 2009 at 12:58 PM, GoodVibe4Ever (< 20) wrote:

No Russ! You didn't understand Running request.

Here's 2Y, I'll do the rest soon. Please save it to your saved charts in case I delete them from mine. They are blank with the most TA indicators I use.Best

GoodVibe

Report this comment
#90) On April 07, 2009 at 1:14 PM, Mary953 (65.93) wrote:

Taking a chance that this question is also acceptable within the confines of this area.  The market is closed for Good Friday.  Is it closed on Monday as well? 

And More important, Does this normally have any effect on the behavior of the market short term or mess with the count (like the way that turn-around Tuesdays?

Binve, these charts are amazing!  Thanks also for the information on getting the charts moved over to the blog.

Report this comment
#91) On April 07, 2009 at 1:25 PM, RussWild (< 20) wrote:

Ahhh I see said the blind mouse.... Actually that would help me out setting some of my indicators up as well GV, so I won't post mine.

Here is some fun i'm having at the micro count 5-day SPX. I'm just playing around with count options and thought I would share so take it with a grain of salt please. This is an attempt to count wave C as a 5 count.... It's pretty messy... but I think it is within the rules..

 spx-5day

Enlarge,

*** Read at your own risk*******

Report this comment
#92) On April 07, 2009 at 1:56 PM, beyondanonda (24.46) wrote:

GV,

this has been the most fascinating formation I have seen yet and i was wondering how you assess such a pattern on the run (I know it has broken down now but this image was taken to show the pattern).  What I mean is, do you consider that the support line was hit 4 days in a row at nearly the same time of day (can you use that for a swing or day trade?), does the fact that it has all the appearance of a bullish flag enter the equation when the momentum doesnt seem to support an upward move?  Just wondered how you work through this very ineteresting pattern


Enlarge

Report this comment
#93) On April 07, 2009 at 1:57 PM, columbia1 wrote:

Russ, when you use the call-out tool for your text on stockcharts, how do you get the line or pointer to work?. All I get is a box with text in it.

Report this comment
#94) On April 07, 2009 at 2:02 PM, Tastylunch (29.44) wrote:

Mary953

I believe it's open monday

What holiday weeks normally do is reduce activity, volume and volatility in the markets.

There is almost never any major economic numbers or earnings released during those weeks either.

I.E it's usually a boring week 99 times out of 100.

Report this comment
#95) On April 07, 2009 at 2:06 PM, GoodVibe4Ever (< 20) wrote:

Look at this chart and tell me what do you think?

SP Wave1

Enlarge Live Chart

Current 815

Running - You can use this one for one month 10M. Actually it's 45 days to cover the whole move. Just delete the channel and you're clear.

Report this comment
#96) On April 07, 2009 at 2:11 PM, RussWild (< 20) wrote:

Columbia ~ hold down the control key then drag. easy peazy!

GV~ it look like a solid break to me. Just need to gain some distance and i'll feel better about it.

Report this comment
#97) On April 07, 2009 at 2:21 PM, GoodVibe4Ever (< 20) wrote:

The live chart above now is different than the Flickr one where I am just trying to put the outlines of my thinking. Nothing confirmed yet. Thanks!

Current 816.74

GoodVibe

Report this comment
#98) On April 07, 2009 at 2:27 PM, GVdrone (< 20) wrote:

GV that is beautiful,

 I am just disappointed at myself that I didn't catch the blue line intersecting the rubicon at 779 last week, that was an "uber-support" (then).

Report this comment
#99) On April 07, 2009 at 2:43 PM, RussWild (< 20) wrote:

I have a simular chart GV, it might be to early to draw this, but I'm seeing a chanel forming here, take a look. I think I know what your going to say, but thought I would post anyways.

 SPX15day

Enlarge

 

Is it 3:00 yet? I might be 2-0 today on my 1-day chart new low prediction....lol

Report this comment
#100) On April 07, 2009 at 3:07 PM, runningin777 (< 20) wrote:

GV -

Thank you!!

 Runningin

Report this comment
#101) On April 07, 2009 at 3:23 PM, kstarich (30.60) wrote:

GV

#95 I see a channel.  Does this mean we are still 1 (A) and not corrective 2 a,b,c?

Report this comment
#102) On April 07, 2009 at 3:48 PM, innerflame (< 20) wrote:

I see Mr Market bumping his hard head at 822- he needs a helmet

Report this comment
#103) On April 07, 2009 at 4:02 PM, innerflame (< 20) wrote:

GV- After all the nervousness I've had the last month trying to learn this stuff- the last 5 minutes of the market were awesome-

Because- you said above- it didn't matter what happened until we closed- and it needed to be below the low of the day to be a start of 2.

Very interesting...

Report this comment
#104) On April 07, 2009 at 4:16 PM, binve (< 20) wrote:

Well now,

That was certainly an interesting day :) Like GV said last night, expect the unexpected. Certainly not what I was expecting, but it ended similarly to expectations. I was expecting a gap up, new high and then a crash. Well, it crashed from the begininning didn't it?

So right now, my chart revision last night looks invalid. If (and this is still a big / unable to be determined if) my current overall preferred count is correct, then the trucated 5th was the end of the move.

I have a few charts below

- S&P 8 months / Daily
- S&P 1 month / Hourly
- S&P 4 day / 5 min
- XLF 1 month / Hourly

All say approximately the same story: Lots of weakness and bearish indicators, possible new downtrend.

And again, just to be clear: THESE CHARTS ARE FOR STUDY / EXPRESSING IDEAS ONLY. DO NOT TRADE OFF THESE CHARTS



Enlarge



Enlarge



Enlarge



Enlarge

Report this comment
#105) On April 07, 2009 at 4:45 PM, binve (< 20) wrote:

Mary (#90): Thanks! I really appreciate that!

Report this comment
#106) On April 07, 2009 at 5:13 PM, innerflame (< 20) wrote:

This is my first chart on ADBE- not even too sure what I'm doing. But it sure is pretty. I don't know how to put it here- but if anyone wants to see it I'll see if I can put the link.

http://www.bestfreecharts.com?emailChartID=ec42e6e9-bbee-48fa-af61-0d1a60873cb1

 

 

Report this comment
#107) On April 07, 2009 at 5:16 PM, runningin777 (< 20) wrote:

Here goes my first one :)

Enlarge 

Report this comment
#108) On April 07, 2009 at 5:24 PM, adventure818 (< 20) wrote:

Dear GV, Binve, Russ and others,

I have a few questions as relates to the assignment of waves and retracement predictions seen above. I'll use Binve's last post #104 as reference.

In the 8-months, daily chart. Head and shoulders formation and resistance band at bottom of long drop since Oct '07. Couldn't the current up from 666.79 to 845.61 and now back down be forming Intermediate ABC correction to the Primary and motive bear we just experienced?

 If so, and see 1 month hourly for this next, then Minor 1 of A up is done with peak at 832.98 (Binve labeled this pink "B" in 1-month hourly, now we are in corrective 2 of A which is mirroring how we came down last Nov-Dec but looks very much like ABC with 779.81 (Binve's pink C (4) then up to 845.61 and now down to ?  Which leads us next into 3 of A up (then 4 and 5) ultimately to 1000+ to satisfy fib retracements of at least 1006 probably next summer based on distance down since Oct 07. Can't this work?

I keep looking and looking at this because I cannot explain to myself the predicted April drops to lower levels that are as low as 740-750 that many are presenting. So if not ABC as  Iwrote above, then why? Or maybe better still, what rules am I not applying?

 Thanks all! This discussion is very appreciated and hope you don't mind my questions.

Adventurer

Report this comment
#109) On April 07, 2009 at 5:39 PM, binve (< 20) wrote:

adventure818, You can look at my comment #49 to see my thinking on the retracement. Be sure to look at both charts in comments and read all of the notes on the charts and well as the supporting text in the comment. This gives my thinking on my preferred count. My other posts (such as #104) are trying to figure out the hourly and minute timing where these waves could be ending.

But the overall trend is still the one I am working with.

Keep in mind, this is simply my opinion. And this opinion certainly by no means speaks for everybody in this forum. Some of us are carrying very different counts. This one just happens to be mine.

And absolutely! Don't think twice about asking questions! We are all happy to answer :)

Report this comment
#110) On April 07, 2009 at 6:44 PM, GoodVibe4Ever (< 20) wrote:

Running - Nice try! Congrats for your first chart. Did you read the book? If yes, where did you get this f g h i count from? Why did you label them this way?

PS. Make sure to replace my name from your charts with your name so we don't confuse anyone. Thanks! 

Mary - Market holidays. These days usually have lower volume and the difference between open and close usually contract sharply. Also options get knocked down ahead of these days knowing that 3 days will be lost from the value of the option premium. Sometimes, the next open after the holiday carry large moves but not always. 

Tasty - Thanks for your answer.

Beyond - The pattern you see is a defined downtrend channel. A break above the channel will suggest a break out of the down turn. But be careful, you can't take part of the chart and trade it. You must see how this piece fits in the whole picture. If you widen your chart's timeframe, you will not see it as downturn but as flat, which is hard to trade. Flat will tax you patience and kill your options. The worst for a trader but it's a part of the game. Using this channel is for day trade and I don't trade the market on day trades basis but if you will know how to do it and find it rewarding, go ahead for it. Just remember it's the toughest to predict and 80%+ of traders lose their shorts on it. I prefer to play a weekly swing and use high leverage vehicles to increase my profits (and helpfully not my losses).

Innerflame - We sure got you going! Did you show this chart to your kid? What do you want to do with this one now? Okay Lady art, it's not a painting! :) Try to play with the tools like edit and draw and see how the chart will look like?

var bfcParams = 'Symbol=ADBE,TimeFrame=0-Minute,NumberOfBars=364,WebChartID=cfa628f7-b31c-47ff-825a-fd1a4efd70c0';var bfcWidth = '300';var bfcHeight = '250';

adventure - Lady K - As I said before, if I knew the way, I would take you there! :) If I want to really give you a straightforward answer on this situation, I won't find one but sure I'll tell you soon. So hold tight and everything will be clear soon! Did your hubby let you free finally?

Do I dare to say and believe that we have many sisters in arms now trying to have their first shots at the battlefield. 

Mary, crystlz, innerflame, .... Roll on sisters.. You also got bills to pay. Did I forget anyone? And can I wish for a dozen of our "better halves" soliders? Yes! I can. Yes! We will? Who is next? And do I dare to say that crystlz is gonna hit the ground running!? :)

GoodVibe

 

Report this comment
#111) On April 07, 2009 at 10:48 PM, crystlz (57.72) wrote:

Hi Everybody,

The chart that I'm posting tonight is a continuation from comment #71. We got the move that we had been anticipating and it went down as in yesterday's chart. I may be guilty of charting what a want to see but this is real money here and I have to look for a favorable set up.

The recent moves have been large and strong both up and down. It seems reasonable to expect this correction to take a while to play out. I'm continuing with the book and am trying to chart everyday to gain some time on the water as I gain more experience with the waves.

BTW I am only a beginner and nothing that I post should be used for investment decisions.

Binve Thanks again for all that you do here.

GV What a wonderful thing you've done here.

namaste'

ENLARGE 

Report this comment
#112) On April 07, 2009 at 11:07 PM, binve (< 20) wrote:

crystlz, Hey excellent chart! I definitely agree with the count (that is how I would count this chart).

I'm continuing with the book and am trying to chart everyday to gain some time on the water as I gain more experience with the waves.

This is a pretty fun ocean to play in, isn't it :)

Just a few observations on the chart:

1. Since this is a 30 minute chart, it is not the 50 day MA, it is technically the 30 period MA (which on a daily chart is, of course, 50 days). On this chart a 50 MA = 3.8 days (since there are 13 periods of 30 minutes each in a trading day).

Depending on the chart horizon I like to play around with different moving averages. This chart is about 1 month long, so I would go for a 1 week (5 trading day) Moving average, which would be a 65 MA on this chart setting.

2. The MACD you are circling below is definitely bearish. But the term "bearish divergence" is used when you are looking a the trend of an indicator. e.g. If prices are rising of time, but the MACD peaks are lowering over time, then there is bearish divergence between the price and the underlying indicator. (Take a look at my last chart in post #104).

I must say, for a beginner you are putting out some top-notch stuff! Keep up the excellent work and post often!!

Report this comment
#113) On April 07, 2009 at 11:08 PM, binve (< 20) wrote:

Sorry, correction:

1. Since this is a 30 minute chart, it is not the 50 day MA, it is technically the 50 period MA (which on a daily chart is, of course, 50 days). On this chart a 50 MA = 3.8 days (since there are 13 periods of 30 minutes each in a trading day).

Report this comment
#114) On April 07, 2009 at 11:19 PM, GoodVibe4Ever (< 20) wrote:

crystlz

I am so happy and proud of your courage to come and call the shots but I have to warn you, never chart what you want to see. First, it's deadly. Second, you really don't need it! :) You can make money trading whatever chart is there! Right? 

Okay! Let's see here with your chart. First, don't buy TOO HARD that wave 5 of A truncated. It might play in the Nasdaq as you and anchak charted but be careful with your cheese area. I don't believe that wave 5 went that far up especially in the S&P. This is just what I believe.

Also, your wave 3 is too long and the look of the wave according to your count is little bit off. I believe 3 ended @ 1260 not 1280. It's fine because 4 will be an a b c flat correction.

Also in your MACD - where you pointed, there's no divergence. it's following the direction of the market. You can see a better divergence in the March rally until the top much better.

I hope this helped.  

नमस् namaste 

GoodVibe

PS. Currently, I am writing my next Market Vibe to conclude my position as soon as 810 breaks to the downside. All the scenarios we oultined here are still on the table. As of now, wave 3 up still in play. Don't get sucked into one way or the other unless you see an evidence on the chart.

I hope this find you all as much as you wish to find yourselves and maybe even a little bit more.

Report this comment
#115) On April 07, 2009 at 11:38 PM, RussWild (< 20) wrote:

Crystlz~ congrats on the chart, well done.

Mr. Green~ great explination of the MA's. It good you understand that well, I've really never used MA's outside of daily/weekly charts.

GV~ love to see another  Market Vibe to get grounded. "as of now, wave 3 is still in play"...humm gives me pause for thought.

I'm just posting this because I'm starting to consider this to more probable if we fall tomorrow and the futures are pretty low at the moment so I'll go ahead and post it. I'm think Binve (and what does that name mean anyways??) It's why I have a need to give you an AKA name...lol  Anywho, I think you posted this option in the past, but I didn't like as  much at the time but it's growing on me.

 SPX-15day

Enlarge

15-day SPX (Wave 3 not started yet), Just an option count so take it with a grain of salt.

Report this comment
#116) On April 07, 2009 at 11:55 PM, RussWild (< 20) wrote:

Russwild <-----Slaps forehead.... 810 is wave 1 of wave 3 droping that will redue the count... I'm being a "good boy" tonight and reading and doing notes on EWT book and what I was reading just hit me where you got that number....lol

Ok, back to the grind!

Report this comment
#117) On April 08, 2009 at 12:06 AM, GoodVibe4Ever (< 20) wrote:

Brother Russ - I think you ruined your DESK! :)

Okay! Now, all of you are stealing my thunder and everytime I want to post something, I found someone else posting it! :)

I love it! Keep doing it. Actually, I start delaying my charts until I see someone else doing it. You know your names or should I name you? I said it before and I will never stop saying it. Seeing your chart up here puts a smile in my heart. Please, keep trying.

Your chart #115, Russ, stole third or less of my future chart but hey pal, don't think that GoodVibe is running out of tricks. Oh, boy! I love a challange and I will get you banging this head of yours every once in awhile. 

Thanks for the cheer mate. You are a ball of fun. How is your moving going?

GoodVibe

Report this comment
#118) On April 08, 2009 at 12:59 AM, RussWild (< 20) wrote:

GV~ Wow, I got just the opposite response than I thought...lol Cool, i'm not so off track! So you enjoyed my 5-day B count this morning as well then.. speaking of losing thunder, as of 2 weeks ago I was the only one posting charts along side of you, now my thunder is gone to the new chart peps comming up and wow, I'm even wondering if I even have a place here...lol

Brother! This is the best part of teaching when you see the students get near your understanding... I think their is nothing more scary and rewarding.....lol

Something you don't know, is that I've had my 89 year old father-in-law live with us for the last 5 months and is leaving at the end of april when we move...... You came in at a time with all of this when I was about to lose it with the stress of it all and getting envolved in this has helped me deal with the um....... stress..... no MADNESS of it all...lol! May, it's so on you don't understand! Finacial is back on line as well as my relationship with my wife, job and well being...lol

Report this comment
#119) On April 08, 2009 at 8:00 AM, DanDarby (< 20) wrote:

Hey Russ, I love looking at your charts keep it up. When I see that I'm charting close to what people like you and binve are, it gives me more confidence that I'm on the right track.

Report this comment
#120) On April 08, 2009 at 8:29 AM, mattskin (< 20) wrote:

I see the S&P futures were down to 809 as of 8:01 am...

I haven't gotten as far as I wanted with my EWT, so I am not following the exchange between GV and Russ.  Looking forward to your post!

Report this comment
#121) On April 08, 2009 at 8:40 AM, runningin777 (< 20) wrote:

GV -

Sorry for leaving your name on the chart.  Too excited about actually getting a chart posted and missed the details (including explaining the 9-wave triangle.)

The fghi part is from fig. 1-44, pg. 51 in the EWT book.  "A triangle always occurs in a position prior to the final actionary wave in the pattern of one larger degree, ie., as wave 4 in an impulse..."

I've been reading the book and reviewing tons of charts, my head is beginning to spin.  I'm seeing 5-3-5's so much I'm starting to chart my kids music scales :)

Runningin 

 

 

Report this comment
#122) On April 08, 2009 at 8:41 AM, IIcx (< 20) wrote:

We haven't had 3 straight down sessions since March 9th. 

Report this comment
#123) On April 08, 2009 at 11:09 AM, ekramer17 (< 20) wrote:

I'll agree that wave 3 is still technically in play, but if we're in wave 3, then that's one strange looking corrective subwave we're currently tracing.  Anyone want to take a stab at charting it?  Might be fun. I've been staring at it for ten minutes and still don't have the slightest clue.

Report this comment
#124) On April 08, 2009 at 12:09 PM, RussWild (< 20) wrote:

~running, thanks bro and I think that is when you really start to get it is when you can't help but count the obvious in things (all things). It's funny you mention scales, boy do I have a doozy for you in the future. I got our companies finacial statment yesterday and couldn't help count the earnings chart...lol and yes, it did worked...lol

Cobo~ See Binve's chart on #83 that is the wave 3 count. It still works.... i think.

Dan~ thanks man, I like the look and feel of your charts! keep up the good work!

Report this comment
#125) On April 08, 2009 at 12:29 PM, beyondanonda (24.46) wrote:

I've been teetering back and forth between a flat and a possible triangle (with the base at 810?)  5 waves made up of 3 subwaves (usually happen in fourth wave which we are very possibly in.  This would mean a huge correction up, but not sure that it fits

Report this comment
#126) On April 08, 2009 at 12:56 PM, binve (< 20) wrote:

All,

I have been watching financials this morning and things look "interesting" (read: very unhealthy technicals).

Take a look. This is not advice for any specific action. But if you are thinking of going long financials here, I simply urge caution :)



Enlarge

Report this comment
#127) On April 08, 2009 at 1:04 PM, ralphmachio (23.90) wrote:

Is there an easy way to get here?  i have to go through three posts to get here, and it sucks. 

Report this comment
#128) On April 08, 2009 at 1:15 PM, tahoestock (30.14) wrote:

binve….just a question about $SPX – the counts seem to be somewhat everywhere at the moment:  wave A or 1, even wave B and 2.  My charting says wave A (and I’m trading that way) but I can’t seem to get wave 3 of wave (5) of A to complete without a new high above 845.  Any thoughts?

Report this comment
#129) On April 08, 2009 at 1:30 PM, binve (< 20) wrote:

tahoestock. I know exactly what you mean!

Right now, based on how the correction is moving (very weridly), I give a 40% probability on my preferred count and a 40% probablity on Russ's count (#115) , and maybe a 10% chance that we are in the middle of Wave 3 with a weird correction, and then another 10% for something way out of left field.

This is one of those days where you watch a lot of other sectors too. But unfortunately, they are not saying anything definitive. However financials look very weak, which is why I posted that chart above. Will that help to give us an edge on the S&P, I really don't know at this point.

My charting says wave A (and I’m trading that way) but I can’t seem to get wave 3 of wave (5) of A to complete without a new high above 845.

Yeah, the longer we flounder the less convinced I am that we are still in Wave A (or 1).

Is it too early for a drink? ... :) Thanks man.

Report this comment
#130) On April 08, 2009 at 1:39 PM, excaliburmini (< 20) wrote:

Funny you mention 666, I saw Palm trade fill up a last sale screen in TD Ameritrade at 6.66, more than once actually.

9.11 is another abused number...

sometimes you just have to question what is right in front of you

is something being said in the stock market?

Report this comment
#131) On April 08, 2009 at 1:59 PM, RussWild (< 20) wrote:

Binve~ Thanks for XLF, I remember GV, told me once not to use that for charting purposes rather one of the finance ETF's. Just thought I would mention that, but i do like your XLF chart, it's pretty clear it's showing weekness.

Report this comment
#132) On April 08, 2009 at 2:11 PM, binve (< 20) wrote:

Russ,

XLF is a pretty stable Spider that moves in tandem with a few of the financial indexes. I think this is a safe one to use for TA. 

Using FAZ or FAS however (which I trade, but do not use for TA purposes), then I would agree with your statement above.

Report this comment
#133) On April 08, 2009 at 2:22 PM, GoodVibe4Ever (< 20) wrote:

I think Russ, you meant to say... GV, told me once [not - delete] to use that for charting purposes rather one of the finance ETF's? Correct? If not, you misunderstood. XLF is the one to chart for financial.

GoodVibe

Report this comment
#134) On April 08, 2009 at 2:49 PM, RussWild (< 20) wrote:

Great! I'm glad that's clear, and yes, I did misunderstand. So XLY, XLP, XLE, XLF, XLV, XLI, XLB, XLK, XLU are all fair game for charting fun... Sick!  I've been dieing to put a "sector" chartlist together...

Report this comment
#135) On April 08, 2009 at 7:48 PM, beyondanonda (24.46) wrote:

I traced the speed lines on the action since early March and found a coincidence between the strong support at 814 at the end of todays market and the first retrace line from the high we reached a couple of days ago.  Admittedly it may mean nothing but if we are ending in a descending triangle or a wierd flat it might add some weight to an upward move.

 

Enlarge

 

Report this comment
#136) On April 08, 2009 at 8:13 PM, beyondanonda (24.46) wrote:

Although it is possible that we have completed wave iv of 3 and will go up on wave v (until we break below 810 who knows?) it is also possible that we will quickly drop below 810 and head down on wave c of 2 instead.  I am having a little problem with the current pattern, regardless of the direction,  it makes either for a wierd wave 4 (but the books say that wave 4's often have triangles) or an equally wierd wave c

Report this comment
#137) On April 08, 2009 at 8:21 PM, Mary953 (65.93) wrote:

Okay everybody,

A new lounge is open here -

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=177932&t=01007737217973478225

It is up to all of you to keep it rec'd up enough that it doesn't disappear by morning!  I still haven't gotten to my taxes and I am going to HAVE to get moving on them, so I will leave the first bursts of conversation to all of you!

Mary

Report this comment
#138) On April 08, 2009 at 11:16 PM, isusan (< 20) wrote:

ralphmachio, the easiest way is to click follow underneath the recs box at the top of a blog.  Then on your caps page you'll have a tab listing "following", click that & it'll show each blog you'd like to follow & when it was last commented on. 

Report this comment
#139) On April 09, 2009 at 12:18 AM, ralphmachio (23.90) wrote:

Thanks isusan!

Report this comment
#140) On April 09, 2009 at 11:46 AM, cubswin08 (30.66) wrote:

No one else will- so I'm calling it.

850 is the end of wave 1.  Wave 2 begins today.  Retrace to 750 range over the next month.   How can BAC considering recap while making mongo bucks.  Not making sense.  Bulls out of ammo now.  Sell of to continue.   Close below 830 today.

Cubs   (still long FAZ)

Report this comment
#141) On April 09, 2009 at 12:16 PM, SolarisKing (22.52) wrote:

Thanks for your post Cubs. I have a little FAZ @ 28.0, and did a little computation with anchak, and others, and it looked pretty sad.

original post

folowup post

I really don't understand it all, but GV said it was a good thread, so i thought i'd put the link to it. 

   FAZ experienced %25 loss against financial etfs like the Russell 2000 select or XLF, IN 20 10 DAYS,  due to factors that i don't understand well (like volatility decay and other factors).

FAZ  is a much better play in the future, and i don't really know what to do about my holdings. Having lost %25 in 10 days, and needing to cross a similar distance to go down, I am guessing a 50% price decay or more before we reach two weeks from now.

So if the underlying ETF is worth the same on april 20th, as it was on may 20th, then FAZ will be worth half as much. Damn.

So to experience breaking even on April 20 under lying would have to fall 50%?. 

I think all you you are better at this than i.   : )

Report this comment
#142) On April 09, 2009 at 12:22 PM, GoodVibe4Ever (< 20) wrote:

SolarisKing wrote: "due to factors that i don't understand well (like volatility decay and other factors".

And this is why I and many others always say you shouldn't trade them at all. :)

GoodVibe

Report this comment
#143) On April 09, 2009 at 12:29 PM, MountainMan434 (< 20) wrote:

GV / Russ / Binve / All -

Call me crazy, but am I seeing us ending wave 5 of 1 of A of P2 up with an Ending Diagonal (p. 38 in EWT)?

(p.37) "An ending diagonal occurs primarily in the fifth wave position at times when the preceding move has gone too far too fast."

(I'm having problems getting my image to show up.  Done it before, but computer is acting up.  Please chk out the link)

http://farm4.static.flickr.com/3647/3426926852_7bb608f658_o.jpg 

MountainMan

Report this comment
#144) On April 09, 2009 at 12:50 PM, beyondanonda (24.46) wrote:

MM

Re your image you might need to break the link (highlight the blue text when you paste it in this comment box then hit the break link icon above)

I am in the wave 3 going up camp so I differ from your conclusion in general and it appears you may have broken some rules in your count for wave 5

SP 847

Report this comment
#145) On April 09, 2009 at 12:55 PM, Helgaki (< 20) wrote:

SolarisKing

if you just jump in at the deep end, there is no guarantie that you will swim.

Report this comment
#146) On April 09, 2009 at 1:16 PM, GoodVibe4Ever (< 20) wrote:

As I've been avoiding any count of late, I will not trade any counts but will play defensive (will not go long for sure but also will not push my shorts). When in doubt, set it out.

Here's a chart that I believe should resolve to the downside even if we top this wedge a little. It's an end formation.

It's not an advice to trade on it.

Current trade

Enlarge

Report this comment
#147) On April 09, 2009 at 1:22 PM, GoodVibe4Ever (< 20) wrote:

Mountain man!!!!

I swear I didn't see your chart before I posted mine but you just put a big smile on my face when I saw your first chart here taking my thunder away! :) :) :)

I didn't call count yet but here you go, fellas! A first chart from Mountain man might be the correct one! :) My only probelm with this count is the length of it, time wise but I saw what you saw. Just decided to keep it to myself until I watch more.

Thanks for the chart. Please, post it on the lounge or mention it to people so they can come and check it for themselves.

Welcome to the club!

GoodVibe

Report this comment
#148) On April 09, 2009 at 2:25 PM, grandmah2 (< 20) wrote:

Hi Everyone,

This is my first post on GV's blog and the first for CAPS for that matter.  I'm embarrassed to say I've been lurking in the shadows soaking up the knowledge for at least 2 months.  To say the least, I've learned a lot.  Thanks to everyone for sharing your knowledge and charting time. 

I have a question - I certainly appreciate all of the EWT with all the wave numbers and man does it work like magic sometimes.  But in the bigger picture, I can't help but notice that a lot of individual stocks seem to have pennants forming this past week or so (consolidation from the recent advances).  In the bigger picture, the pennants seem to be part of a gigantic (inverted?) head and shoulders or maybe a double bottom. 

The clarity of the formation depends a lot on which stock you look at.  For instance, see C.  XLF looks like a pennant that just broke out, I guess thanks to WFC.  TTM looks like it could be tracing out a very symettrical double bottom.  GNW too.  Some of these formations have open gaps on the left side, which makes me wonder whether there will be a gap up if (IF!) these pennant-looking formations resolve to the upside.

But here's my dilemma.  VO and VB appear to be consolidating under resistance in a pattern that my admittedly amatuer pattern recognition skills would say is an upward sloping triangle that often resolves to the downside.  Maybe it's a poorly formed pennant, but they should ideally reverse the trend temporarily, right?  Since these are broad market ETFs, it really makes me wonder.  On the side, S looks to me like it's about to fall off a cliff, despite Cramer's solid recommendation.

Any thoughts?  Like I said, I very much appreciate all the wave counts, but I've noticed that some other EWT "practitioners" are having a hard time calling the counts, especially after the latest trend modification.  It's definitely apparent that it's easier to count the short timeframe waves a week or two after they have happened, which makes it a little hard to predict the short term future. 

Is there a bigger picture here to look at?  I know the market isn't ever obliged to make any common sense, but the market does reflect human psychology, which is in turn affected mood.  (I mean, the market didn't crash just because EWT said it would - some big institutions failed and that rightfully scared a lot of people).  And mood can be - to an extent - affected by the news.  I'm really not trying to get on GV's bad side on my first post, but WFC didn't jump 20% today for no particular reason.  It was good news.  (If any of you had predicted it with EWT, please give me a heads up next time!).  That said, I completely agree that EWT can be used to interpret people's reaction to price, as people's reactions are somewhat predictable.

Enough said for now I guess, let's see how many eggs get thrown my way.  To redeem myself, I offer the following idea/question:

Is there any legal reason that I can't short an equal dollar amount of FAS and FAZ at the same time?  As many of you have (hopefully) realized, the extreme churn in those triple leveraged funds means that if you buy $1000 of each, in a month or two you will have about $1000 total (ie. not $2000 invested) no matter which way the market has swung.  In other words, if you short both, you are perfectly hedged and as the mangement fees eat into both, the sum of the two funds will always deteriorate.  Try it with a spreadsheet - divide $1000 by the price of each share on Feb 1st to determine how many shares you would have bought.  Now multiply those shares by today's value and you'll definitely end up with less than $2000.  But if you had shorted that combination, you'd be up double.  Is that legal?

FAS and FAZ are such a joke.  If you're a genius or very lucky, they can make you rich (or poor) in a day.  But the only people really getting rich are the fund managers because they are constantly charging their fees out of the fund.  I would gladly short both at the same time if I can.  Basically I would be selling some sucker a basket of depreciating assets. 

 

Report this comment
#149) On April 09, 2009 at 2:57 PM, mark91055 (< 20) wrote:

Solaris-please sit on the sidelines and learn.  Unless your someone who has to experience a broken leg to decide its not a good thing, please just watch and learn.

GV-don't hate me in the morning ;-)

Grandma, its hard to find a broker who can borrow the shares to short it...but I hear where you are ,coming from.  I am not an EW guru..but I respect it.  That said, the psychology of an individual stock may not be as dependable as an index for the very reason that you mentioned...News does matter.  Oh and if Cramer reccomends it I short it.

cheers

 

Report this comment
#150) On April 09, 2009 at 3:51 PM, geno0010 (< 20) wrote:

Man! I come back from Jamaica and find that everyone has learned how to count. I have to set some time aside to read that book and start learning. Russ, Binve, everyone else posting charts, GREAT WORK. I got online last Tuesday long enough to buy some longs - sold half today at a tidy profit. I'm looking forward to seeing everyone's take on what is going on this last week. Hard for me to catch up when I don't know what is happening!

Report this comment
#151) On April 09, 2009 at 3:56 PM, SolarisKing (22.52) wrote:

wow, three folks who told me nothing, except to tell me to sit down and hush. sorry,

I've stareed at this screen for twenty minutes or more trying to figure how to say how i feel. 

How i feel is . . . .  I feel as if i say how i feel i will be told to sit down and hush. I feel like ranting, but i'm sure you will just ignore me, or tell me to go away.

Well ten minutes later i still can't think straight so i guess i will just go back to my corner and hush, and listen like i was told. I guess i should take a walk before i let this ruin my mood all day.

Damn i'm in a bad mood. What makes me think that smart people want to check the math of someone who's not a smart as them?

Well i may not be smart as some people, but at least i'm healthy and have a nice girlfriend. I'm going for a walk, Maybe i'll read a book or two and try posting on a GV  blog sometime next year. 

sorry to have use up your ink, and your space.

Report this comment
#152) On April 09, 2009 at 4:12 PM, anchak (99.86) wrote:

grandmah2: "Is there any legal reason that I can't short an equal dollar amount of FAS and FAZ at the same time? "

Absolutely not! Completely legit way of making money - except you need to have the shares available at your broker .....one person I know who has done this successfully is Michael ( EverydayInvestor) ....and he plays the same strategy in CAPS - while RVA who runs ultrasuck - does that wholehearted in CAPS.

Report this comment
#153) On April 09, 2009 at 4:27 PM, cubswin08 (30.66) wrote:

Solaris, not sure what to say.  I'm down too.  Have a good Easter.   The treasures found are greater than those of earth anyway.   Cubs

Report this comment
#154) On April 09, 2009 at 5:00 PM, anchak (99.86) wrote:

SolarisKing :

Let me give you an excrutiatingly painful resolution strategy:

If its not a huge amount of capital assume it'll go to zero....and keep holding it......Unless another round of financial armageddon happens (who knows!) - you'll not recover capital - but maybe you can see a $20 day to recover some.

If its a big amount - and you hate to see the decay - well sell it and move on.

GS which is a big FAS/FAZ component reports on Tuesday. JPM does on Thursday.

Report this comment
#155) On April 09, 2009 at 5:37 PM, SolarisKing (22.52) wrote:

Thanks, anchak, and Cub.

The truth is it's not a lot. I was going to channel in some, and it went wrong so i didn't buy more. I'm not really worried about the $500, but i thought the position might give me a chance to participate in a conversation and learn something (something besides the already established fact that most folks are smarter than me about stock).

    I did learn alot when i asked on other blogs. This is the only place that it was insinuated that my questions weren't worth answering.

I have more questions, but i will ask them somewhere else, where the folks aren't so busy. I've noticed that sometimes when folks are popular, they experience a certain type of stress. 

Report this comment
#156) On April 09, 2009 at 8:09 PM, Tutom (< 20) wrote:

I'm trying to grasp the scale of what's going on since I often confuse the many waves and their sub-sets. I'd like to understand why we seem to be looking for Wave A to finish around this present level. I know that nothing goes up in a straight line, but if the last set of 5 waves down amounted to an approx $900 decline in the S&P, then we should be looking for somewhere between 38% and 62% retracement for this A,B,C corrective wave up. If we assume even a 50% retracement or $450 rise in the index off its lows of 666, it would be pretty hard to do with the first wave (A) being only 190, as it stands now. In fact, I think C wave should be the shorter wave at 62% of wave A. So, shouldn't we expect wave A to be longer? Even a lot longer since B wave will retrace some 50%. For example: wave A = $400 in length, B wave = $200 down, and C = $250. That would take us to a 50% retracement of the last large wave down. 

 Or maybe I haven't got the big picture correct. I wonder if someone could help me look at the big to small picture for the future and correct me if I'm wrong. Thank you. 

Report this comment
#157) On April 09, 2009 at 9:31 PM, tahoestock (30.14) wrote:

tutom…

 

Not sure if anyone will respond soon given this is a market holiday, but I’ll give you my take on the market by referencing GV and binve’s charts from above.

 

I think you have the big picture correct - I always start with the big picture such as binve #2 above.  It shows wave [1] complete at 666.79; caveat:  there are some posts referencing that [1] is not complete, that 666.79 is actually wave{3} of wave [1].  I agree with GV that wave [1] is completed. 

 

If you agree that wave [1] has ended then wave [2] has begun and is an ABC corrective wave to wave [1]; as shown on binve’s chart (see #2 again) it should correct to a minimum 1014.14, and perhaps higher.  If wave A is 200 points, and wave B retraces 50%, and wave C is 250 points, then the following happens:  666 + 200 – 100 + 250 = 1016.  This is close to the minimum retracement.  Personally I believe wave A has a bit to go, perhaps to 875.  Again, some posts may disagree with me (see RussWild #115), that we are in wave 3 of A.  If so, then the ABC retracement is even higher, and may even fit better than my scenario.  You would then be correct to believe that wave A needs to be longer.

 

I think you have a good handle on the major wave count.  Not knowing how you invest I have just one piece of advice:  always go with the major trend, which is down.  You can have long positions with wave [2] if you are comfortable trading shorter term (and if you believe we are in wave [2]); I would just hedge with some shorts.  Otherwise, trade with the trend and scale in short positions at the Fib retracement levels (1014, 1121, 1228).

 

Hope this helps.  Feel free to ask more questions; your thought process is excellent.   

Report this comment
#158) On April 09, 2009 at 9:36 PM, beyondanonda (24.46) wrote:

Well, I wont be able to do anything else until I figure out that last pattern.  I havent confirmed the counts but I would like you to shoot this theory out of the water if its a non starter...anyone please.  I dont think its too much of a stretch to see this last move as a bullish flag. 

1. They are preceded by an almost straight line move (flagpole)

2. Prices trend down on light volume for a week or so

3.The trend reverses on a bust of activity

4.The pattern occurs at about the midpoint of the market move

The pattern slopes against the prevailing move

 

Enlarge

Report this comment
#159) On April 09, 2009 at 10:10 PM, anchak (99.86) wrote:

SolarisKing :  You are always welcome to ask questions. I think why people got aggravated here - is that there is a misconception I think in CAPS - that this place promotes trading in 3x Ultras and condones it.

That is not the case - and your statement raised some antennas.

The relatively small position is heartening. You could even hold it as a hedge - while going long if you choose to.

Tutom : You have the big picture correct - and I believe if you position yourself in UNLEVERED instruments in the big scheme - you should do well.

 

Report this comment
#160) On April 09, 2009 at 10:33 PM, adventure818 (< 20) wrote:

OK, I have a theory and a count. Very contrarian and hopefully in line with Elliott (which I am reading). I created my first ever chart on bestfreecharts.com. I would absolutely love to post it here and have everyone send condolences/kudos/corrections ;-) but I cannot figure out how and have tried 4X.

Could someone who uses bestfreecharts give me precise instructions on posting? Thanks!!

Adventurer

Report this comment
#161) On April 10, 2009 at 10:18 AM, grandmah2 (< 20) wrote:

SolarisKing -

Hey man, I'm sorry, really didn't mean to shoot you down.  Looking back at my comments, they definitely weren't directed towards you in any negative way.  In fact, I'm trying to confirm your fortunate new understanding that the leveraged funds only work on a daily basis.  In other words, within +/- a percent, those ETFs will generally do what they say between opening and closing bell. 

The problem is that 50% up is not the same as 50% down.  So if FAS goes down 50% one day (and FAZ goes up 50%) and then you get a complete reversal the next day, the numbers don't add up to the original amount.  Therein lies the problem.  There is a name for it - it starts with a "c" (someone help me?).   To oversimplify a little bit, when prices fall and these leveraged funds rebalance daily, they loose exposure on the way back up.  The fact that 10% down is not offset by 10% up is true for all stocks, but when you triple the effect, it's huge.  Think of it like the benefit of compounding interest, except in reverse.

 Anyway, I don't want to junk up GV's blog, but I think you're getting the picture better now.  Don't get me wrong, if you think the market is going to take off like a rocket (ie. GV's "cheese"!!! or perhaps you observe a more reliable pattern such as a pennant or flag or any type of downward consolidation on a sharp rise - profit taking), FAS or BGU could make you very happy.  But if things are very volatile and those leveraged funds are going up and down rapidly, the asset value can get destroyed equally fast.  You know what they say about get rich quick schemes, right?  If something is too good to be true?

I'm sharing these thoughts because I am coming from your position.  My comment about suckers buying leveraged funds includes myself, except that now I want to try to exploit the other side of that deal.  Fortunately, with the help of this blog, I've made enough good trades to come out even (thanks GV!).  As long as your capital doesn't go to zero, you can still redeem yourself. Stick with things, don't chicken out, soak up the free knowledge, be smart, learn from your mistakes, and I hope you'll do better. 

 

Report this comment
#162) On April 10, 2009 at 10:56 AM, grandmah2 (< 20) wrote:

Sorry to get off topic, but here's a fictional graph of what I described above about leveraged funds and volatility.  I've seen SSO, SKF, FAS and FAZ mentioned here a lot, so I think it's worth mentioning.  Don't get me wrong, I would trade them again on the right day, but definitely NOT a buy-and-hold ETF. 

 http://farm4.static.flickr.com/3581/3429228736_2e3510beb9_m.jpg

I've decided I can do much better with much less stress if I use a bit of TA including EWT to pick some real swing-trade breakouts instead of trying to day-trade FAS.  

By the way, my best non-miracle / substantial / no worries position is a very unexciting Vanguard broad market ETF purchased in the cheese zone (ie. "666 day").  Boy was that exciting to watch that pattern play out, right down to the darn vertex of the last diagonal.  Thanks again, GV.

Report this comment
#163) On April 10, 2009 at 1:46 PM, GoodVibe4Ever (< 20) wrote:

Hi everybody - I hope all are doing fine. I'll take few days off the computer. Binve also emailed me and said he's taking couple weeks off as well. I don't know why he didn't come and say this here but I thought to tell you too. I would love to answer any questions here or from the lounge but I really don't want to start this or I will not stop and I need to get going. Welcome grandmah! I hope you enjoyed the conversation, I'll join in soon.

Only one thing that I wanted to respond to here, which I think to be important because it's so dangerous. It's to anyone who trade Ultra ETS (long or short) without understanding. 

Anchak and portfolio sat down generously with solaris and gave him a good advice and that was his answer:

I don't have to understand the reason for the price wackiness, i need to know if my target is approximately right
. Then i can decide when to rid myself of the FAZ. I TRUELY appreciate your desire to clear this up for me and point me in the right direction, but i am afraid i might spend all night reading and typing and still not understand the full issue. I just need some round numbers. Do i sell in less than a week, or can i hold for 30 days. I'm beginning to think i should sell fairly fast, like this week or next. But if it's feasible for FAZ to return to it's former glory, than i can afford to hold it till the correction, and or impending doom, that i think is comming.

........

Your statement says please give me a round number to sell at because I might have no time or ability to understand all this stuff that you are talking about.

If you don't understand it, don't trade it and when you make that mistake after all these good people here said before about ultra ETFs, the best advice to you is to sell that small position, take your loss as a lesson learned to never trade what you don't understand.

Anyone who will advice you anything than this out of kindness is guilty by association and I have no desire to do so. Read the guidelines and know they are there for a good reason. If the truth hurts your feelings, brother, stay away from self-directed trading or investing and hire a personal investment advisor to do this for you. That doesn’t make you less than anyone in the world. I, myself, know very few things in this world and never shy from saying so. Emotions as well as the lack of understanding what you trade are the enemy when trading. But if you really want to learn, take it slowely and make sure to master the basics. It’s a marathon not a sprint. You can't run before you walk, and you can’t walk before you crawl. If you still wanna complain about our honest responses to you instead of making things right, then would you like some cheese and crackers to go with your whine? :)

I hope this helped.

If anyone want to talk about something outside the topic of this blog, please use the lounge instead of using this post. People are starting to find it hard to keep up with the many off topics such as solaris, which if it belong to anywhere here, it will be the lounge. That said, I still believe that telling others what to do with a position they started already is not a good idea and Caps is not the right place for it but if you still want to do it, please do it in the lounge.

Have a happy holiday and blessed days ahead

GoodVibe  

Report this comment
#164) On April 10, 2009 at 3:38 PM, mistermiranga (98.22) wrote:

I guess I should do a more thorough study of the EW book to come to terms on my own but is there any guidance on proportions of wave 1 to wave 2 if we are looking at the longer time frame (Russ' post #115 and GV's #146)? The power of the rally certainly points to wave 3 underway but the "wave 2 correction"  would then be very small on the time scale. Just trying to step back to make sense of the counts...from what I have observed the shorter time frame price action has been very bullish but bigger picture makes the wave 3 scenario tough to buy into...literally and figuratively. Forgive me if this is overly simplistic. 

 

 

Report this comment
#165) On April 10, 2009 at 5:14 PM, RussWild (< 20) wrote:

Miranga~ exactly! I've placed my bet for down, but I'm just getting board here in the crazy end of wave 1 or 2 or the 3 start. I just want to know and take a loss, make some money and start fresh. The lack of uncertianty is getting to me a little.

Report this comment
#166) On April 10, 2009 at 5:28 PM, Tutom (< 20) wrote:

Thank you tahoestock and anchak for your response. It's good to know that I'm somewhat on the right track. Still, what's bothering me is similar to what mistermiranga just pointed out--scale. In comparison to the first wave down in {1} down or any other wave in that series, our present wave and its sub-sets seem very small. In time as well. Could we possibly be in a sub-wave of A? For example, Wave 1 up of 5 waves that make up the first wave A of {2}. That would mean that we could power up to 1100 or so quite easily during this 5 wave trip up. If we went that far I would be surprised if the A,B,C is a flat. Also, A could take quite a long time to complete. But, considering that the 5 waves down took very little time, perhaps we would get back into the normal time period for each wave. Hope this doesn't sound utterly stupid, but something seems odd and I'd like to get it out of my system before I get back to charting. I'm in no hurry to invest now anyway. I would really like quality companies to set proper bases before jumping in, and I don't see very many yet. Thanks in advance!

Report this comment
#167) On April 10, 2009 at 6:37 PM, Tutom (< 20) wrote:

I think it would be unlikely that sub-set 1 of 5 Wave up of A of {2} still be in play. The 5 wave count worked better to 826.78. If this was the top of sub-wave 1, then we would have started sub-wave 3 at around 780. Yesterday would have been the start to wave 3 of sub-wave 3 of 5 of A of {2} up. Pivot point a little above the previous top of 847.9. Yesterday's actions was the most wave three-ish I've seen. A high volume breakout, a quick return to the breakout point, and then a launch at the end of day.

Subwaves of A --Wave1: 190 point advance to 856. Wave 2 to retrace to 756 (actually went to 780). Wave 3 to advance 272 points to 1027. Wave 4 to retrace 136 points to 891. Wave 5 of A to advance to peak of 1072 and begin Wave B down.

The server down for bestfreecharts... I should find better things to do with a day off, but this is stuck in my head.

Report this comment
#168) On April 10, 2009 at 7:39 PM, IIcx (< 20) wrote:

Mondays are typically down and there are chart gaps to cover below so expect some profit taking to shake the nervous out of their positions but there's no question we'll see this week trending up for weeks to come.

Best, IIcx 

Report this comment
#169) On April 10, 2009 at 7:58 PM, IIcx (< 20) wrote:

Report this comment
#170) On April 10, 2009 at 8:25 PM, mark91055 (< 20) wrote:

I like the Russle 2000 for its action.  It seems to be the clearest right now if you like the idea we are in  wave 3 up.  Strong Bullish action.  With one week to go there is a good chance my April puts go to "option heaven" as GV put it.  My straddle paid off on the upside so I'm profitable but its always nice to double-dip.  Cheers

Report this comment
#171) On April 11, 2009 at 8:20 AM, HomeOnTheRange (< 20) wrote:

Good debate and discussion about short selling and the uptick rule going on EverydayInvestor blog yesterday.

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=178740&t=01001529370998141183

What do some of you think, in the "Goodvibe" Bear's Den??? 

Please chime in your views, we are getting a strong collection of various perspectives.

Report this comment
#172) On April 11, 2009 at 1:40 PM, grandmah2 (< 20) wrote:

What do you guys think of the VIX finally breaking out of it's triangle to the downside?  Does that change your bigger picture view of the patterns or "preferred wave count"?  Last commented in #60 by RussWild.

Report this comment
#173) On April 13, 2009 at 8:01 AM, GoodVibe4Ever (< 20) wrote:

Good Morning everybody -

I hope your holiday was pleasant and joyful.

Here is my count and two scenarios for this week until I get thing into a post. I hope it will add some value to your thinking.

Best Count 04.13.09

Enlarge

See you after the bell. Stay positive, be happy, do good, and you will win.

GoodVibe

Report this comment
#174) On April 13, 2009 at 8:05 AM, nevercanstop (< 20) wrote:

Tutom,

I agree with the gist of what you wrote in the paragraph Subwaves of A.  My question is, how long (ballpark) do you see this taking to play out? And, when we then get Wave B down, what would you calculate as the max. downside target?

Report this comment
#175) On April 13, 2009 at 11:01 AM, TakeABreath (< 20) wrote:

Morning all,

GV- Thanks for the chart, a question about the green, orange and red ovals surrounding the Fib numbers . . .  are they color coordinated to reflect your confidence wether they will hold or not? i.e. green oval - most confident, orange oval - confident, red oval - least confident? 

Report this comment
#176) On April 13, 2009 at 11:29 AM, Tutom (< 20) wrote:

nevercanstop, I'm just posing a theory for discussion and I'm not trading my theory because I don't have confidence in it. EW is still very new to me, but it facinates me. From my calculations, "A" could go top 1000 if we're in a sub-set of "A,"and I won't go as far as set a date because of my lack of experience. Then, as tahoestock said, look to fib retracement points and major support lines for "B" down. What i'm trying to get is not only a better perspective on the big picture from the past, but extrapolate from there into the future.

GV, I wonder if you could show us on a chart, how the big picture could play out, say, one to five years or more in the future. I won't take that as something to trade from, but rather a way to help me understand EW a little better. Thanks so much for all the fun. Your teaching and everyones charts and discussion has been so helpful.

Report this comment
#177) On April 13, 2009 at 8:42 PM, nevercanstop (< 20) wrote:

Tutom,

Thx for the reply.  I would NEVER trade off of someone else's analysis, let alone one that is as long dated (most probably) as the one you posted.  I like reading other people's thought's and discerning what brought them to that conclusion.  For me, it is helpful in coming to my own conclusion.

Right now, in my opinion, there are many different factors and the maket is in (my words) "somewhat uncharted territory" (no pun intended).  I think this week, and certainly the next 8 trading days will bring more clarity as to where we are, and where we are going.  In the meantime, I'm staying on the side lines, and starting to build some select short positions on strength.  That being said, my holding time is typically very short, or intra-day.

Report this comment
#178) On April 14, 2009 at 3:51 AM, GoodVibe4Ever (< 20) wrote:

Please see the new post here.

GoodVibe

Report this comment
#179) On April 14, 2009 at 5:07 PM, GoodVibe4Ever (< 20) wrote:

Tutom - No one knows the future. There are many theories of what the wave count will be. All are valid because they follow the rules. I don't like to present any of them at this time so I won't enforce any view on others or on myself. One day at a time is my way to go. But for the large picture, we will visit these lows again late 2009 - early 2010. If I am still around, I will present the case for that as I usually do. I hope this helped.

Breath - These colors has nothing to do with confidence. These are all levels of entry point that I can feel, let's say, comfortable with starting positions. The red equal less risk/more reward. Below these numbers, the emergency and hit and run operations are in place. In this case they are way to the bottom. Read the hedge post.  

grandma - Did you see my new VIX update? This is what I think about the VIX. And I believe people should stay away from shorting Ultra ETF even if you can. You can do it in Caps because you will never get a margin call! :) Let's see you shorted equal $ of FAS and FAZ @ S&P 666 or any day after that, go and see how much under water you would be with this play today.

In this case, FAS can stay irrational more than you can stay solvent waiting for time to bring them both down and your broker will liquidate your positions if you don't have enough capital to sustain 500% gain in FAS! It’s great to short these when they first introduced and even this also I will not do it. Does that make sense? And thanks for your kind word. I am happy to help. Hope to see one of your charts or calls soon.

GoodVibe

Report this comment
#180) On April 15, 2009 at 11:32 AM, Mary953 (65.93) wrote:

THE TAXMAN COMETH, BRINGING CHEESE!  IN THE NEW GOODVIBE LOUNGE,  found at http://caps.fool.com/Blogs/ViewPost.aspx?bpid=180689&t=01007737217973478225

Try to rec the lounge enough to get it on the board, guys.  Since the lounge is never listed, no one can find it to comment!  That may be part of the reason that GV ends up with so many lounge comments on his blog!

 

Report this comment

Blog Archive

Featured Broker Partners


Advertisement