Jan 31, 2010

FTSE100 - Elliott Wave update

          The tape looks almost the same from Friday's close price. Fifth 5 wave seems expanded. There is one more alt. scenario, where the selling pressure might extend that fifth wave, breaking more important support level  5 096, but I think the skinny dipping will be delayed few days(week). Fifths  sometimes expand around support/resistance levels , where the battle among bulls & bears is stronger.
          See you around the end of wave (2) or (B).

Jan 29, 2010

FTSE100 - Elliott Wave count

Our friends from UK already made their five waves down on FTSE100 index. My expectations are for corrective bounce up to the red target box next week. Full moon is coming :)))  I mean the moon has the power to make  flood tides and ebbs.
 After more than two years,  I am sure, that the full moon has the power to influence upon the stock market as well every month,,,, with no exception.

Jan 28, 2010

EUROSTOXX50.I- Elliott wave count

       One of my favorite European indexes is on the way to paint five waves downside as well.  Not much time for text, while I am at my day job.
I prepared two counts:
Alt. count.

Preferred count.

                                                       Long term expectations.

Elliott Wave Update - short term bullish signals

   My advice for the greenhorns, is to stay aside, waiting for higher levels for shorting the market. Because, I expect five waves up for (C) wave of an "expanded flat".

Good luck!

Jan 25, 2010

Dow ---- WOW !!!

    Wow !!!- DJIA made 568 pts decline  for only 3 sessions, I haven't seen such a long leg down lately, and hasn't finished yet. The waves are so clear --- even suspicious clear. Just have a look at the 10 min chart.There is not much to explain what do I expect --Few more points down, and then few days for any A,B,C to correct the first wave.

Long term I left the door open for one more "zig-zag" and higher high to hit the H&S target, but let the time prove it. It depends on that how low will dip the market price. However, let the bear play it's dance and get some"SHORT" answers.

Jan 24, 2010

Elliott wave count on Gold-update

            A serious correction towards the $930 level, painting "running flat" could shake out the speculative community while keeping the precious metal in a longer-term uptrend. As I mentioned in my previous update, a strong selling pressure is expected. Short term I see at least "X" corrective wave level area as possible target ($930). If the GOLD decides to paint an "expanded flat" the price might drop to deeper levels, around $650.

Jan 21, 2010

DJIA - Elliott Wave update- last call for the bulls

    It was necessary to adjust my count a little these days ( short and long term). Downside decline still remains according to my count. The ending diagonal pattern has extended a little more, than I expected. The current uptrend from the mid-Dec 2009 low is losing momentum. However all attempts on the downside so far find solid support near the 10 232 chart level. Eventually though, breaking this level, will give way to a strong selling pressure to correct the entire rally from the July 2009 low.
   Here my count shows, that one more little bounce up is expected. There is another alternative, that the end of that ED is already in place, and the expected decline is already on the way.

Jan 15, 2010

DJIA - Elliott Wave update

            The price's slightly climbing is getting weak last few days, forming an ending diagonal according to my count. As long as the prices stay above the 10 265-10 232 key support, the main focus still remains on the upside. However, when testing the 2008 resistance area at 10 827 will see whether  solid top can be found very soon (today or these days).
           On the downside, any move below 10 232, where is the ground of the ED will negate the above bullish view, and the end of (Y) wave is already in place.The current move looks like an overthrow. Breaking the ground ED line, painting 5 waves down, will support my bearish expectations.

Good luck!


Jan 10, 2010


                              (some thoughts about time cycles)
The most frequently asked question for every market analyst and trader is “WHEN?”   
                  I think most of you have heard about the great 13 century mathematician Leonardo Fibonacci from Pisa (Italy). He has rediscovered the well forgotten Egyptian sequence of numbers - 1,1,2,3,5,8,13,21,34,55,89,144, and so on to infinity, called Fibonacci sequence.
      Exploring  the Fibonacci Sequence, I see that this is not only numerology. I am impressed that the wave spans can be fitted to these numbers with remarkable accuracy. These numbers can serve to give the analyst the opportunity to indicate possible times and levels for a market turns, especially if they coincide with price targets and wave counts.   
                There is no sure way of using the time factor by itself in market forecasting.  Elliott has told that the time factor often conforms to the pattern, for instance with regard to trend channels, therefore it is so significant. Frequently, however durations and time relationships themselves reflect to Fibonacci measurements.
        Let’s see these numbers in action. The progression of years from 1929 top about DJIA produces a remarkable Fibonacci sequence as well:
1. 1929+3years = 1932 bear market bottom
2. 1929+5years = 1934 correction bottom
3. 1929+8years = 1937 bull market top
4. 1929+13years = 1942 bull market correction bottom and so on.

         I think the situation nowadays  is similar to 1929.

A similar series has begun in 2007. Then  DJIA and most of the major indexes made their all time highs. Thus I could see some interesting possibilities with respect to DJIA  in near future. However, let’s take 2007 high as the majorpoint, and add some numbers:

1. 2007 top+1year = 2008 bear market reaction high as second wave
2. 2007+2years = 2009 bear market bottom
3. 2007+3years = 2010 possible top
4. 2007+5years = 2012 ???

Now I would like to mention W.D.Gann. He’s been one of the greatest traders and mathematicians in 20th century. He has made 50 millions in 50s , which is equivalent to 50 billions in nowadays.
I will take a very surface look at his rules, because they are very complicated (to me).The time factor is one of the most important things in his works. According to him every movement in the market is the result of the natural law and a cause, which exists long before the effect takes place, and can be determined years in advance. The future is a bit repetition of the past. Everything moves in a cycles as a result of a natural law of action and reaction. He also has described few major and few minor cycles. Studding the past we can discover what cycle will repeat in the future.
    Sounds simple, ah?
He  has also put  specific market behavior behind each year’s  number. The interesting is that every 10th year is a “BEAR year “according to him.
   One of the cycles, which I paid attention to, is  the 10 year cycle. According  to Gann this cycle is one of the most important, which is the half of the 20 years cycle and 1/6 of the 60 year cycle. An extreme high or low occurs every 10 years.  Important is a 7 year cycle as well.
      Let’s fit some cycles:
1. 2010 should be a “bear year” according to Gann
2. Let’s take 2000 year as a major top point plus 10 years- makes 2010.
3. In 2003 the market made bottom- plus 7 years makes 2010
      Do you think all that is a coincidence ? ….I do not.
      It is provable by the Elliott Wave Principle as well. In terms of time, we can use wave structure for guidance. Note, that time factor is not as well incorporated into EWP as distance, so while we come up with tight time ranges, the confidence in them is less than with the target distance range.

Some more matches , based on the Golden Ratio


         So, I still can claim that rally as a bear market correction, and the reversal point is very close. Question of time. There is nothing new under the Sun.

Jan 8, 2010

INDU- Elliott Wave update

I think the battle between bulls and bears begins.
According to this count, the picture  looks like an ending diagonal.


                                     The negative market reaction after these news is bearish sign.

DXY-Elliott Wave update

            I think US Dollar's downtrend is already done for now. According to my EW count we have five clear waves downside  completed, which completes the A,B,C pattern - called "expanded flat" of larger degree (primary). At the bottom the bulls were over 90 %, which was one of the signs of trend reversal. Few weeks ago  i pointed  reversal area- about 74,17, and I was very close, it stuck at 74,23 and bounced up to make it's first impulsive wave up. Correction after the 1st  wave is already  on the way , reaching 76,58 area, will suite my ego. There is one of the Pivot points, which is right in the middle between 38.2% and 50.0% Fibo retracement. Still hasn't reached 38.2 % Fib. 

Jan 5, 2010

Exponential VS Log scale

             We all live in an exponential world, and many of the market analyzers use that fact  in their analysis.
The main problem comes from fact, that sometimes analyzers use linear, sometimes logarithmic graph.
            You can't use log scale and make linear calculations, and the opposite.
              Have a look at the both graphics bellow:


At first hand they look totally different, and have nothing common. More observant of you have already noticed
that on both is DJ 30.
Here is an interesting example:


Let's suppose that you have invested $1000 in General Electric for $8 per share in 1995, it makes 125 shares. For two years the price rises to $16 and you cover the long, taking $8 profit per share in the pocket, which makes 100% profit.
Few years later the price rises to $30, and you decide to buy your favorite instrument again. But this time you spend $1000 to buy only 33 shares. However, the price is going higher, reaching $60 in 2000. Then you decide to sell again, taking profit $30 per share, which is 100% profit again. Visually the spread between the blue lines is four times wider than the red ones. It's easy to make a mistake, that the second trade's profit is four times bigger. It is so, because the graphic is linear.
Here is the same GE logarithmic scale example:


I have calculated GE Fibonacci retracement levels of the move from $8 to $60 in both ways:

Fibo                          38.2%

Linear                     38.9

Logarithmic           27.21

        If we follow the linear calculating, could make a conclusion that GE's 61.8%Fibo retrace is nearly ($27.10)  of its rising up, and as an ewavers using Fibonacci tool to expect bounce up again.
        The picture is totally different, if we have calculated that correction in logarithmic way. It is obvious, that 61.8% of the correction is nearly $17, and there is more dropping down.
                                                                 Which scale to use?
 If we are daytraders, can use both, because the difference  is very small.
 If we are swing or longer term traders or investors- the linear one.

        P.S. The price now differs , I just use an example graph.  

Jan 4, 2010

Elliott Wave update

Sorry, no time for text part today.
Probably we'll see the valley from higher.
I changed the count a little.