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Market Thoughts and Analysis: Summer Doldrums or Hurricane Season?

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July 09, 2009 – Comments (41)

Green Shoots, Head and Shoulders, P-PIP and BS. Actually lots of BS. This post is just a "random walk" through some current fundamental and technical issues. And FWIW, I believe the market volatility coming up will resemble hurricane season much more than summer doldrums.

I am going to try to start posting a few thoughts on a semi-regular basis. I have written a lot of "special topic" mammoth blog posts in the past when I had time on the weekends. This post will not be a tome, nor will any in this series of regular updates. Just a few thoughts on the Fundamentals and some charts that I watch on a regular basis. It will tend to be broad market / equity focused. I will save gold, commodities, and in-depth Dollar analysis for special more focused posts.

Here is a list of most of my in-depth market analysis posts:

- This Rally was Pure Weapons Grade Balognium Jun 22, 09 - LINK
- Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog Jun 17, 09 - LINK
- Market Thoughts and Analysis: The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) Jun 15, 09 - LINK
- More Thoughts and Analysis: Timeframes - Bearish, to Bullish ... to Bearish May 17, 09 - LINK
- Still Bearish: FA and TA on S&P500, Observations on the Economy May 10, 09 - LINK
- Technical Investing Themes: MacroTrends, USDX, Oil, Gold, S&P500, etc. Mar 27, 09 - LINK
- Is Natural Gas Potentially Bottoming? Mar 23, 09 - LINK
- Update on Oil, Gold and the USDX Mar 19, 09 - LINK
- Short Term Oil Jan 7, 09 - LINK

Here is a list of very good commentary posts that discuss inflation / deflation / monetary policy / macroeconomics, etc.

- Steve Saville: Market Value, Money and Credit - Good layman's description of TMS and its importance

- Quantitative Easing Explained - Just a good funny article on QE
- Steve Saville: Why We are Gold Bulls - A good inflationary summary
- Steve Saville: Money Confusion and Inflation/Deflation - Good discussion as to what consitutes money and why some monetary discussions are invalid
- Zeal: Big Inflation Coming 2 - Good discussion of inflation and deflation.
- Mises: TMS - Good Definition of True Money Supply (TMS).
- Saville: Inflations New Upward Trend - Misuse of the Velocity of Money concept
- John Mauldin: The Endgame - Very good deflation arguments.

Purpose and Background

First I am not trying to convince anybody of anything. You may hate TA and think it bogus. Fine. You may think Elliot Wave is garbage. Perfect. You may think my fundamental stance is idiotic. Good for you. I am quite literally fine with all of those responses. I am sharing my thoughts. That's it. Maybe it is useful to you, maybe it is not. I have nothing to sell. I am not trying to wow you with prognostications, nor am I trying to indisputably prove that TA works. I am sharing my thoughts. Nothing more, nothing less.

I have written several posts and many have come to appreciate my thoughts and / or my writing style. And many of you disagree with me. And that is perfectly fine too. In fact, the discussions from these disagreements are some of the best discussions I read on CAPS. So even if you don't agree with me, please rec my posts if you appreciate my thoughts, candor, or analysis and the time I take to write them.

Regarding my analyis and Elliot Wave counts specifically: Read this RANT. I will not regurgitate that rant here. I have done it many times already. Please read my rant first before questioning the validity of my analysis, or presuming that I am stating my analysis as more than a guess.

Many of us EW Technicians have what we call a “preferred count”. This means the count and analysis that is the most likely to happen, in our opinion. We may have several different counts that are viable based on the unfolding price action (because ultimately any pattern is incomplete until it is in the past). But we select one that is most likely, the “preferred” one. And per the observation made above, any good analyst knows that even the best guess is still a guess. So even the analyst who makes the count does not put an absolute 100% likelihood of occurrence on it..

Okay, that out of the way, lets get to the good stuff!



Yes indeed, this is binv's Tin Foil Hat Area! Acutually many people don't agree with my fundamental analysis, especially regarding inflation / deflation. And even less agree with my TA, especially my Elliot Wave Counts. So if you find yourself actually agreeing with what I write, then might I suggest wearing a Tin Foil Hat? I will gladly sell you one for just $19.95! (plus shipping and handling of course) .... :) (just kidding). On to the analysis!

Fundamentals

Broad Market and Earnings Well here were are in the midst of earnings season and the misuse / overuse of the term "priced-in" will be spouted by talking heads as if they have Teret's syndrome. Companies will seemingly be reward for crappy performance, or rather performance that is not a crappy as was expected .... or will they? Alcoa (AA) is the first example here. It had horrendous earnings, but was "not as bad as expected. And it was up over 7% in before hours trading, was up 6.8% during hours. .... However it closed around 2.5% down.

So is the cycle of bad news being ignored over? In short, I think yes. June 11 marked the peak, technically and I think it did so in terms of sentiment too. My June 22 post discusses this in more detail: This Rally was Pure Weapons Grade Balognium Jun 22, 09 - LINK.

Real, honest-to-God, GAAP earnings estimates for the S&P 500 for 2009 are still around $40 from honest reputable analysts (think John Mauldin). I have seen non-GAAP estimates that are much higher (which are BS) or other "fiddled" estimates. So at ~888, we are still in the PE rang of 22. For an overdone rally, this is pretty high if you ask me.

Financials (pigs with wings) Many are still flying, but a lot of hunters have now realized there is bacon just flying around in the sky. This was never bound to last long. Whatever P-PIP plan gets put forward, which is ultimately another band-aid, always remember these points when it comes to finanicals (from Still Bearish: FA and TA on S&P500, Observations on the Economy May 10, 09 - LINK)

- 1. Consumption accounts for 70% of GDP
- 2. Consumers are hurting
- 3. Unempolyment is rising
- 4. Home Prices are Dropping
- 5. There is another wave coming to the mortgage crisis: Option-ARMs (read increased defaults and foreclosures)
- Points 1-4 will hurt counsumers which hurts financials due to increased defaults, and point 5 is a direct double whammy to financials  
- 6. Most earnings are fake
- 7. Stress test results are fake
- 8. Mark to Market is fake

Maybe this weeds out the weak ones and the "strong survive" .... okay, good luck with all that. I personally do want want to place bets on completely opaque instutions with horrible fundamentals thinking it is a strong one and only to be blind-sided later on.

Why do I continually harp on financials? Because they led this rally up and I believe they will lead this rally down.

.... continued in the Comments section ....

41 Comments – Post Your Own

#1) On July 09, 2009 at 8:37 PM, binve (< 20) wrote:



Technicals

As a little background (first if you have not read any of my posts before, please read the links above at the beginning to get a feel of where I am coming from), I am very bearish short term. I think the technical picture is very bearish for the market. We made a high on many of the indices on June 11. We also had a Dow Theroy non-confirmation (Transports did not make a higher high with the Industrials), which is not necessarily bearish in and of itself, but it sure ain't bullish!

As a proxy, my go-to index is the S&P 500, and I present much of my analysis in that one. But you will see in my charts below, that I always look at the S&P 500, Dow Industrials, NASDAQ Composite, and Russell 2000 for all my counts and analysis, even if I show the SPX predominately.

Medium and Short Term Count for the SPX:

First I zoom out to the intermediate count so you can see the bigger picture before I drill down. I am very bearish right now, especially based on the technicals. Right now we are flirting with a support level at 875, and have not yet broke convincingly through it. There is an alternate count that is feasible and almost appealing analytically. But based on the *way* the the price has unfolded since June 11, I am sticking with my preferred count.

Just an observation: The corretive option is a possible one, but since June 11, all of the impulses down have been steepending (longer prices in shorter periods of time). It looks to me like it is accelerating toward Wave 3, if in fact it is Wave 3. This is another reason why the Wave 3 / impulsive count is my preferred. (my $0.02). Stop looking at the counts, indicators, channels lines, patterns, etc for a minute, and look at the *way* the price has developed since June. It it plunging farther on each down move. Also the speed of down moves is increasing. This trend is accelerating. This screams Wave 3 to me, and I would really ask you to think about this fact when trying to pick a bottom or a bounce here.



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Longer Term Projections:

I believe we have a very obvious Head and Shoulders (H&S) setup. I first identified this setup potential here: More Thoughts and Analysis: Timeframes - Bearish, to Bullish ... to Bearish May 17, 09 - LINK in May. I was early on the call and the formation of the head, and yes I do realize early is wrong :). I made another call here This Rally was Pure Weapons Grade Balognium Jun 22, 09 - LINK on June 22 after the top was in and on the way to forming the right shoulder.

I think this H&S setup is key to the market action over the next 6 months. You can see in my projections that this H&S is the first of two, and this also sets up a massive inverted H&S. Read this post for more thoughts on how the fundamentals can help drive this technical setup More Thoughts and Analysis: Timeframes - Bearish, to Bullish ... to Bearish May 17, 09 - LINK



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Sector Analysis:

Anchak and I were discussing a few days ago about the Wave 3 setup (down move) that I am forecasting. He was skeptical yesterday because Health care was not breaking down (and consumer services to a lesser extent). However health care broke down today. In fact all of the sectors are looking weak. As in Oil and Natural Gas in the short term. The US Dollar is not breaking down, but rather is consolidating with bond auctions have generally been pretty good this week. None of this portends well for equities.



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Investor Sentiment via the CPC and the VIX:

The Put/Call Ratio ($CPC) by itself gives you very little knowledge about what option investors are thinking (it is a very erratic number, changing all the time). But what is very useful is looking at the trends of the CPC. Extreme values (usually above 1.25 or below 0.75) are usually found at turning points (when the general investing sentiment is either too bullish or too bearish). From these extremes, the direction of the shorter term Moving Averages can give a clue as to how option writers view the progress of the rally and how they are hedging their bets. Based on the recent trends, it looks like Option Writers (in general) are turning more bearish on this rally.

The VIX has also broken its long term down trend, which is another bearish sign.



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Long Term Projection:

Here is my long term projection. A valid was asked by TastyLunch, if I am such a believer in inflation (which I am), why such a bearish projection for the market? Doesn't inflation help the market? Yes.... it helps it from falling as far as it would otherwise. Here is my synopsis:

- If I thought the outcome was truly deflationary, I would be making a call for the S&P to drop to 133 (during 1929, after the initial 50% drop, the stock market dropped another 80%! over the next few years). 20% of 666 = 133. And no I do not think that is realistic given governement policies. I think something like ~400 on the S&P (4000 on the Dow) is more realisitic
- But what the big drop in the middle of inflation?
- Because earnings still stink!
- Inflation is not enough to keep prices high (I think all the inflated money will find itself in real assets, not the stock market), however, I think inflation will keep prices in the stock market from dropping as low as they otherwise would
- Inflation will also help earnings from dropping in price terms as low as they would go (in nominal terms they will be much lower)
- I have said before, that the market needs to make a bottom in terms of valuation before it can go up again, and historically that is when PE is 6-10.
- Just for kicks, lets use PE = 8 as the bottom.
- Earnings (GAAP) from good analysts (such as Mauldin) are around $40. And for the sake of argument, lets say they stay the same for the next few years (I see a much stronger argument that they will actually shrink, I see no compelling argument that they will grow). But lets say inflation keeps them about $40.
- PE of 8 * $40 earnings = $320 Price of S&P at the bottom
- This is where I get my ~400 estimate for the S&P.
- I think we will have inflation big time, but I think the market fundamentals are so bad that they will fall regardless of inflation
- Indicidentally, my gold argument still stands. Dow at the bottom of ~$4000 (not as bad as an equivalent Great Depression move) still puts Gold at $4000 eventually if you believe like I do that the Dow-Gold ratio will bottom at 1 (or even less).

So that's my story, and I'm sticking to it :)



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Please feel free to comment, disagree, discuss. And even if you don’t agree with my conclusions, please rec if you appreciate the effort or the explanation of my thoughts, even if you use them draw different conclusions than mine.

The binv standard disclaimer: This in no way constitutes investing advice. All of these opinions are my own and I am simply sharing them. I am not trying to convince anybody to do anything with their money. I am simply offering up ideas for the sake of discussion. As always, everybody is expected to do their own due diligence and to ulimately be comfortable with their own investing decisions.

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#2) On July 09, 2009 at 8:39 PM, binve (< 20) wrote:

Huh, the links in the first section vanished, lets see if this works:

Here is a list of most of my in-depth market analysis posts:

- This Rally was Pure Weapons Grade Balognium Jun 22, 09 - LINK
- Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog Jun 17, 09 - LINK
- Market Thoughts and Analysis: The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) Jun 15, 09 - LINK
- More Thoughts and Analysis: Timeframes - Bearish, to Bullish ... to Bearish May 17, 09 - LINK
- Still Bearish: FA and TA on S&P500, Observations on the Economy May 10, 09 - LINK
- Technical Investing Themes: MacroTrends, USDX, Oil, Gold, S&P500, etc. Mar 27, 09 - LINK
- Is Natural Gas Potentially Bottoming? Mar 23, 09 - LINK
- Update on Oil, Gold and the USDX Mar 19, 09 - LINK
- Short Term Oil Jan 7, 09 - LINK

Here is a list of very good commentary posts that discuss inflation / deflation / monetary policy / macroeconomics, etc.

- Steve Saville: Market Value, Money and Credit - Good layman's description of TMS and its importance

- Quantitative Easing Explained - Just a good funny article on QE
- Steve Saville: Why We are Gold Bulls - A good inflationary summary
- Steve Saville: Money Confusion and Inflation/Deflation - Good discussion as to what consitutes money and why some monetary discussions are invalid
- Zeal: Big Inflation Coming 2 - Good discussion of inflation and deflation.
- Mises: TMS - Good Definition of True Money Supply (TMS).
- Saville: Inflations New Upward Trend - Misuse of the Velocity of Money concept
- John Mauldin: The Endgame - Very good deflation arguments.

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#3) On July 09, 2009 at 9:11 PM, Mark910 (< 20) wrote:

The term you were searching for....Cascading Waterfalls.  coming to a market near you soon.   Cascading Waterfalls is a trademark ed term.  Please send .24 cents for each use of this term to Mark910 in Argentina.

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#4) On July 09, 2009 at 9:22 PM, binve (< 20) wrote:

Mark, absolutely! I think your orginal analysis / observation was right on! Cascading Parabolas. We will rise fast level off for awhile and then fall farther, rise-level-fall farther, in parabolic / waterfall progression just like you are saying.

Yeah, you get the royalties! Can I get a referral bonus (kind of like an Affliliate program)? :)

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#5) On July 09, 2009 at 9:25 PM, RootnToot (30.22) wrote:

B Bro,

Once again you have outdone yourself. Rec 9 from me.

I was watching the news tonight and here in the state where once upon a time we made autos, there will be 100 thousand people that will run out of unemployment (79 months worth) by the end of this year. Me thinks we will have an extended hurricane season this year.

Root

 

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#6) On July 09, 2009 at 9:29 PM, RussWild (< 20) wrote:

I'm getting dizzy... I need to sit down.....

 Great Job Binve Rec #8 here

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#7) On July 09, 2009 at 9:42 PM, binve (< 20) wrote:

RootnToot, Hey man, Thanks! I appreciate all your compliments and support.

Yeah, I hear you man. I know we have talked about this before, but I have lots of unemployed family in Michigan. It is category 5 conditions up there :(. Thanks for the comment man!

RussWild, You spin me round round baby right round :) Thanks bro!.

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#8) On July 09, 2009 at 9:58 PM, portefeuille (99.65) wrote:

Cascading Waterfalls/Parabolas

For an illustration see Monday and Tuesday in the following chart. The character can of course always switch (see Wednesday to Friday) ...

 

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(from comment #22 here

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#9) On July 09, 2009 at 10:20 PM, starbucks4ever (98.67) wrote:

Hi binve,

I have one very simple question. Here is what I can gather from the EWT as applied in practice:

----------------------------------- 

Comment 12  in "GoodVibe Community Alert - This Is The Time!"

"Skinnee - My current bet is short that I started at both 955 and 925. Those will be covered with nice gains if 927.09 will be taken out tomorrow! It's simple as this. The rule that wave 1 can't retrace more than 100% of 2 (if you are aware of EW). If we top 927 high, then all we know that wave 3 DOWN is not gonna happen and the bullish scenario have better chances. This is the only thing we can be certain of. For the upside above 956 from above 927, we have to find out like everyone else. We will have to wait for more actions on the chart."

01:11 in CIL 12: 

"GoodVibe:  I think you should post that chart in the comment section, approved by me. :) I have the same count and I was going to post it. Just make sure to put the alternative. I am putting three lights as stops. Green 907, yellow 910 and red 927. I will cover on one of those depend on what comes tomorrow. This channel is bothering me and it's telling me that if it breaks, It's better to book my gains in this trade. I'll give it a little bit room though." 

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

Should we interpret this as saying that EWT practicioners are now long, having covered their last shorts at 927? 

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#10) On July 09, 2009 at 11:04 PM, binve (< 20) wrote:

portefeuille, Hey man. I do not take credit for the coining of term cascading waterfalls / parabolas. That was originally made by Mark910 in this post. But I do like your mathematical representation in your post, I did read those series of posts of yours and I like them. I like the concept, and you can see it on 1-minute charts and 1-day charts. Thanks man!

zloj, Hey man. Let me preface this by saying that I like your writing and your humor. Your terseness, I believe, is often misunderstood. But I am going to ask you to read my Purpose and Background section above and this rant.

First you are laboring under the assumption that there is one singular interpretation of an EW count. This is not the case! Each count is in flux until this price action in front of and behind it is completed. This is why projections are just that, projections. They are opinions, nothing more.

I am going to go no further explaining anything above in your comment, because it is obvious that you have not read the setion above or the rants in any of my other previous blog posts.

I cannot speak for anyone else only myself. I was short at S&P 945 June 15 and got out at ~910 June 17. I went short again at 920 on June 22 and I am still short. I have communicated all these moves as they took place on the CIL.

I did not abandon my short when they went in the red at 932 on July 6. I do not let anybody else set stops for me. All traders have their own loss tolerance and their own timeframe. I can't speak for anybody else, only myself. I listen to other's and I let others opinions help guide some of my decisions, but all my trading decisions are my own.

So as to your last question, for me personally: I am NOT long. In fact I am 100% short, as I just said, since June 22. I am holding right now because I believe we will be getting a large down wave for the next 2 weeks. This is not advice, just stating my opinion.

Please read this rant before asking questions like this again. But, and this is an honest statement, I appreciate your comment. Thanks man!.

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#11) On July 09, 2009 at 11:22 PM, binve (< 20) wrote:

zloj, One further thought. I communicated my bearish stance and the call of the continuation of the general downtrend on June 22 in this blog post - This Rally was Pure Weapons Grade Balognium Jun 22, 09 - LINK. I even answered JGus's questions in commment #12 regarding my trades and their timing, and my opinions regarding the next moves. In this post I made my case for the continuation of the downtrend. Will it be volatile? yes. Even now, could it go higher before it goes back down? Absolutely. But I have laid out my *opinion* as to why the move will continue to be down the next few weeks.

My opinion will not necessarily be the same as another other analysts opinion. And there is only one thing I can guarantee ... neither one of us will be 100% right. All analysis is an opinion, nothing more.

Jeez, I am ranting again. Please read this rant, and you will know where I am coming from. Thanks :).

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#12) On July 10, 2009 at 12:11 AM, starbucks4ever (98.67) wrote:

Hi binve,

You are wrong because I HAVE read your rant before. And don't get me wrong, I'm well aware that 10 EWT traders will have 10 different counts (which is why I haven't bought into the idea in the first place). My concern is that the theory may not work as well as advertised. Yes, we hear every day about a new successful EWT trade, but these new trades come from new traders. But follow the track record of one and the same trader for a little longer, and you will see about 50% heads and 50% tails.

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#13) On July 10, 2009 at 1:26 AM, binve (< 20) wrote:

zloj, .... :) I think all I can do with this is shake my head and smile.

You are wrong because I HAVE read your rant before.

Okay, but you keep dancing around questions that I have already pre-emptively answered in my rants

I'm well aware that 10 EWT traders will have 10 different counts (which is why I haven't bought into the idea in the first place).

As per my rants, I am not asking you to buy into any of my ideas. From the orginial post above: I have nothing to sell. I am not trying to wow you with prognostications, nor am I trying to indisputably prove that TA works. I am sharing my thoughts. Nothing more, nothing less.

My concern is that the theory may not work as well as advertised.

LOL! As I have said at least a dozen times now I am not advertising or selling ANYTHING.

I am sharing my thoughts. That's it.

You seem to want to argue about points that I am not trying to make.

And I have no interest engaging in that argument.

We have beat this dead horse too long. Peace zloj.

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#14) On July 10, 2009 at 2:30 AM, ati2ud (32.66) wrote:

very nice, well thought out, easy to see where your thoughts are, as usual.  great post

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#15) On July 10, 2009 at 2:39 AM, AdirondackFund (< 20) wrote:

Really, really nice work Binve and a solid argument which covers all of the important bases.  The VIX Chart is easily the most exciting.  Adding to the heat is also the correct count of it now being a 'third down'.  I do have an alternate count which counts the a-b-c- lateral moves as a lower 'b' than the original size of the 'a' wave.  If that is the case, cascading is too polite a term for the spike down that is either underway or is simply continuing.

Really appreciate the work.  Thanks.

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#16) On July 10, 2009 at 9:12 AM, binve (< 20) wrote:

ati2ud, Thanks, I appreciate that!

AdirondackFund, Hey Adi! Thank you for that compliment. Thanks man. Yeah, things could really move down fast here. My preferred count definitely suggests that. And yeah, the VIX breakout was very telling for those of a bearish mindset. Thanks and take care!.

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#17) On July 10, 2009 at 10:15 AM, helicopterfool (35.00) wrote:

Thanks Binve.  Another GREAT post.  Guys like you are why I participate in CAPS.

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#18) On July 10, 2009 at 11:31 AM, bostoncelitcs (41.04) wrote:

Man, hell of a job on those charts. They are very pretty to look at but...........

Our whole financial system has been "hijacked" by Wall St. "traders" who sold "credit default swaps" (aka financial weapons of mass destruction) to financial institutions of which AIG insured them with no collateral.  Now AIG (or the US government depending on how you want to look at it) has just lost it's lawsuit against it's former head Hank Greenberg for $4.3 b.......that's right BILLION dollars. 

When the banks start "lending" again, then we will have an economic recovery.

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#19) On July 10, 2009 at 11:33 AM, Tastylunch (29.39) wrote:

I Like natural world analogies

Doldrums, Hurricanes, cascading waterfalls

 what about QuickSand or Monsoons or Jökulhlaups?

http://en.wikipedia.org/wiki/J%C3%B6kulhlaup

Incidentally Jökulhlaup is my analogy term for describing how inflation will take hold if it actually does come. :)

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#20) On July 10, 2009 at 11:39 AM, portefeuille (99.65) wrote:

#18 for the A.I.G. F.P. story see this post.

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#21) On July 10, 2009 at 12:30 PM, biotechmgr (35.59) wrote:

Binve Really nice post, great work. Thanks for your contributions. Regards, biotechmgr

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#22) On July 10, 2009 at 12:34 PM, tonylogan1 (28.24) wrote:

I see a TMFBinve title in your future... rec 51

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#23) On July 10, 2009 at 12:44 PM, briyan (31.63) wrote:

Enjoyed your post as always, binve.

Side note: check spelling on "Teret's" vs. "Tourette's".

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

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#24) On July 10, 2009 at 12:55 PM, PrestonCheek (32.53) wrote:

tony, your right. It would be better than a lot of articles that they have now.

Who would have known that binve had it in him.

And you do, you have a writing talent and I'm glad I knew you before you were famous. :)

See you in the lounge.

Prseton

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#25) On July 10, 2009 at 1:04 PM, binve (< 20) wrote:

helicopterfool, Thanks man! Wow, I really appreciate that !  :)

bostoncelitcs, Thanks. And I agree with your assessment of financials and the economy, which is why I am very bearish, hence my last chart projection.

Tastylunch, LOL! Thanks man :) Have you ever seen a glacier eruption during your time in Iceland? Holy cow, just knowing they are around should be unnerving :).

And yeah, I totally agree. I think the monetary inflation that is built pressure in the monetary base will erupt into prices quickly and take a lot of people by surprise. But I am cognizant of your "if it does come" too :)

biotechmgr, Thanks!! I really appreciate that especially from you. Your posts and thoughts are exteremely helpful, glad I could contribute!!

tonylogan1, LOL! Thanks man :) I appreciate the thought and the rec!

briyan, Thanks! And thanks for the correction. I wrote this post really fast last night, and looking back I see all kinds of typos and grammatical errors. :(.

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#26) On July 10, 2009 at 1:05 PM, binve (< 20) wrote:

PrestonCheek, Thanks bro! I really appreciate that man :) Good trading!!

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#27) On July 10, 2009 at 3:05 PM, anchak (99.87) wrote:

I take great offense at Tastylunch 's reference to the Monsoon - so hereby I sentence him to experience the thrill of walking 10 miles in waist-deep water in pouring rainfall ( I have first hand experience - had to do it once to get back home from work)

Random Pic From Google: http://blog.gagankaul.com/wp-content/uploads/2006/07/mumbai-monsoon-3.jpg

And by collusion/association  Binve is also found guilty and hence only receives +1 rec instead of the 10 deserved.

Hey man! Looks like a running flat currently...watch GS though

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#28) On July 10, 2009 at 6:49 PM, SkinneeJ (28.44) wrote:

rec +1.  I like looking at the charts...  If nothing else, they are pretty...

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#29) On July 10, 2009 at 8:34 PM, Tastylunch (29.39) wrote:

anchak

My goodness that's a hard core commute!

I can only imagine what that amount of water does to builidings

Dep water like that is incredibly dangerous (and gross), scary stuff 

binve

haha no  I haven't witnessed one in person. I like having a Tastylunch not being a Tastylunch.

Well I was 5 Km from one once in one of my glacial excursions, but I was a glacier over so I wouldn't become fricaseed. Couldn't really see anything though.

I did get to see Keiko of Free Willy fame though when I was rafting around one of the sub islands.

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#30) On July 10, 2009 at 11:36 PM, binve (< 20) wrote:

anchak, Hey AC! Holy cow! 10 miles in waist deep torrential rain! Man, that is hard core. But, wow, a 90% rec reduction is pretty hard core too :). jk :). Thanks for the comment bro!

SkinneeJ, Thanks! Yeah, I like pretty charts :)

Tastylunch, LOL! I remember you telling me about some of the crazy things the Icelanders eat, and so your statement put a vision in my head about geyser-charred visiting scientist on the menu ... :)

But seeing a killer whale from a raft in glacier filled waters sounds awesome man! .... uhhh, I think I saw some manatees once in Florida, so that's almost the same .... :).

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#31) On July 12, 2009 at 2:13 AM, AWF (< 20) wrote:

It looks to me that your EW projections are just a guess?

How about your " technical" reasons for the length of the waves and the price projection of your " preferred" count.

This is the "heart" of the EWP

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#32) On July 12, 2009 at 11:47 AM, binve (< 20) wrote:

AWF,

It looks to me that your EW projections are just a guess?.

The point that I have belabored repeatedly is that *anyone's* EW projections are a guess. Yours, mine, GoodVibe's, or even Prechter's. No one *knows* what form the price action will take. The only thing a projection can tell you is what form the price action is likely to take, or what it is likely not to take. 

Also read my comment #9 from this post

Like we preach in the CIL; Don't think and ask "does EWP predict the future?". "What is the next step in the pattern with 100% accuracy"

Instead think: "What is the new prevailing trend", "Where is the next junction between an impulse and a corrective wave *likely* to occur", "what is the risk/reward associated with that setup", "where is a good place to set stops (physical or mental) based on nearby support/resistance", "what are good scaling levels based on S/R".

People are so hung up on "Can TA predict the future?", and I think that is dumb. It is a meaningless debate that is a huge distraction. Because price tends to cluster in areas and in patterns. We see it all the time. I am interested in finding *probable* outcomes to those scenarios. The question of a *definitive* outcome is academic and irrelevant to me.

How about your " technical" reasons for the length of the waves and the price projection of your " preferred" count. This is the "heart" of the EWP.

You can see from my charts that I spend a lot of time laying this out. I have preferred projections with possible alternates, each one being technically possible. I look at multiple indices all which should describe the prevaling movement of the equity market, and make sure the count works for all of them. And I combine classic TA with EWP. From my longer term projection #2 chart above:

Head and Shoulder Confirmation. Neckline underneath the head peak was 810 with a Head Peak at 950. This has a head height of 140 points. This gives a measured target of 810 - 140 = 670. Very close to the 666 which was acheived!

Head and Shoulders. Neckline should be about 830-840. I think the (A) of {B} wave will come back and bounce off that support level. Measured target for (C)/{B} based on this head and shoulder would be ~720

The neckline is about 950. Based on Points: Head to Neck is 950 - 666 = 284 pts. Target is 950 + 284 = 1234. ZigZag Calcs: {A} = 290. From {B} of 720: 1.00*{A} = 1010. 1.618*{A} = 1189. Wave 2 should retrace most of Wave 1, and these setups describe that..

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#33) On July 12, 2009 at 7:18 PM, AWF (< 20) wrote:

The point is that *anyone's* EW projections are a guess.

Now that EWP is debunked-RN Elliott is rolling over in his grave--Prechter is on oxygen and you have made the " fools" the smartest guy's in the world--"Idiocracy" ?

Now to Edwards and Magee--You have identified the secular "Double Top" in your long--term chart but you made no mention of this pattern in you analysis??

Would you please share your thoughts on this pattern.

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#34) On July 12, 2009 at 11:15 PM, binve (< 20) wrote:

AWF, Dude what is your damage?

Now that EWP is debunked-RN Elliott is rolling over in his grave--Prechter is on oxygen and you have made the " fools" the smartest guy's in the world--"Idiocracy" ?

I have no idea what you are trying you say with the above statement but it certainly does not sound complimentary to anybody.

So now you write: Would you please share your thoughts on this pattern.

Based on your response, what incentive do you give me to engage you in a conversation? 

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#35) On July 13, 2009 at 9:54 AM, AWF (< 20) wrote:

Binve --you missed the point--

The Elliott Wave PRINCIPLE is a set of rules.

It is not your guess is as good as mine?

I was challenging you to make an accurate forecast.

How could you do that?

You would start by identifing the cycle waves and primary waves.

Applying the Elliott RULES and reviewing previous support and resistance areas and reviewing standard TA patterns you have a forecast. You may be surprised at how good the cycle and primary wave forecast can be!

Just the big picture

Where are we in the cycle and primary wave?

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#36) On July 13, 2009 at 10:38 AM, binve (< 20) wrote:

AWF, This is getting tiresome.

The Elliott Wave PRINCIPLE is a set of rules. It is not your guess is as good as mine?

If you have read any of my other posts, I have belabored this point.... repeatedly. But in case you missed any of the other dozen posts that have my rants in it, please re-read my rant above. I will no longer address this point with you anymore.

I was challenging you to make an accurate forecast.

LOL! What do you think the point of these posts are? I am making a forecast / projection based on the information I have, from EWP, TA and FA. I have short, medium and long term projections.

If you don't like my projections or think they are stupid ... I could care less. I said this in my the background section above. Like I have said I am sharing my thoughts, nothing more nothing less. I am not trying to convince anybody of anything.

If you think you have a better take on the counts than I do or better long term projections than me, then by all means write your own blog and share it with the community.

I am done addressing and re-addressing these points with you, and I am ending our conversation now. Peace.

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#37) On July 14, 2009 at 1:16 PM, madcowmonkey (< 20) wrote:

Challenge:)!!!!

http://www.youtube.com/watch?v=XhYC6pnBuWA

binve- your disclaiming your disclaimers of the disclaiming and getting dissed during the dissing of the disclaimer. What is this world coming to:)

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#38) On July 14, 2009 at 5:55 PM, binve (< 20) wrote:

madcowmonkey, Hey man, no kidding. Some people want to make an agument no matter how much you qualify an opinion as an opinion, sheez. :) Oh well.

Dude, I love that video! Yeah, I remember seeing that at some point before, but it is awesome! Don't mess with Sammy Davis Jr. :).

Thanks man :)

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#39) On July 15, 2009 at 11:11 AM, madcowmonkey (< 20) wrote:

I just love sandman yelling Challenge to all the others. Absolutely hillarious.

BTW- I think you should put the binve tags on every chart you run and post:) Maybe even market the tinfoil hat emblem next to it. 

 My "gut" instinct is telling me to get ready to take aim at some companies after earnings come out. I don't gamble with low probability of being successful, so I will wait it out while the market takes it time to figure out which way is up:)

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#40) On July 15, 2009 at 4:37 PM, sohumtrader (30.69) wrote:

binve I am very interested to see how you are going to update highly speculative scenario after today's action in the markets, where you were expecting a wave down for the market.

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#41) On July 15, 2009 at 9:08 PM, binve (< 20) wrote:

sohumtrader, Yeah, I have to really re-think the highly speculative scenario, but the basis of my overall count needs to change based on the size of the move the last 3 days. Check out my next blog post for my thoughts. Thanks.

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