Mar 31, 2010

SP 500 - Law of nature

       I can't claim myself as a bear at heart.  I can't afford to be extreme bull or bear in these volatile markets, so we need to be very flexible, turning from bulls to bears and the opposite often.
       The current market is really overbought, but actually trading overbought or oversold market without confirmation is a really looking for trouble.
       I wonder what is the particular reason, which holds the price so high and so long. According to my EW count there are five impulse waves already completed. Gann's calculations showed  me Mar 26 2010 as a mid top. Full moon cycle (Mar 28 2010) freaking all, passed away. What left? Maybe the extreme and naked optimism. But as we know the market needs pure cash, not optimism. Yesterdays volume was only 0.9m, which is peanuts money.  What left? - only optimism.
        As we know, every movement in the market is the result of a natural low and a cause, which exists long before the effect takes place, and can be determined days, weeks, months and years in advance. The future is a repetition of the past. Every move is a result of action and reaction. There is nothing new under the sun.
        Again, the market never likes to make the things easy for anyone.

Probably today will be the reversal day for correction (reaction), keeping the price 1180.69, made in Mar 25 2010 as a mid top.
Good luck!

Mar 29, 2010

S&P 500 Bull's herd needs a break

        Please Bulls, don't offend because of the title, I am medium term Bull too. 
I can put my hand at my heart and say -this top is not P2 or B yet. 
        In March 24. 2010 I made diffident try to mix EWTheory & Gann Theory, and it was very close-1 day and 2.94 pts, as I mentioned taking the bottom made in Feb 05.2010 only. Then I also painted potential triangle for the next few months before the final bullish push. Probably it could be a different formation-corrective as well.
      Yesterday I made few more calculations. This time I took the Mar25.2010 and 1180.40 as a potential top, and got some results as dates and price levels. These levels perfectly fit to the Fibonacci -38.2% and 50.0% of the potential (a)  wave of the last "zig zag", which we should see next months. To tell you the truth, I am really curious to see the results. Can you imagine how powerful market weapon could be constructed, combining both theories? 

     P.S.- The green vertical lines are dates in April.

Mar 26, 2010

EUR/USD -Did the P.I.G.S. sink the EUR ?

            As you know, the Ewaves are usually aroused by the social mood. That inaugurate events in the world, and when the EUR down  trend began, still nobody was talking about fiscal problems in Greece, Portugal and other European countries. We still don’t know if these problems will end next weeks or not, but the pair EUR/USD very soon will complete very clear 5 waves downward, which are built for nearly five months. It was very serious decline due to hmmm....Do you think the P.I.G.S did it?  
          5 complete waves means, that the EUR is going to be kicked out by the green old buck for deeper retrace very soon. 
        See the current labeling I did: Technically two weeks ago I was doubting about the (V)th wave could happen (the current (iV) wave was labeled in my chart as "leading diagonal" of potential (a)  corrective wave). So, that (V) is already underway and I relabeled my count.
I have enclosed the whole data  I've got, and as you see the grand channel (since 1971) still holds the price between the lines. 
The potential target looks like 1EUR= 1$

Mar 24, 2010

SPX 500 Very short term

    Today I made time and price calculations about SP-500. These very short term calculations were based on the GANN Theory  mainly and the EWP. My last few months dream is a combination between the EWP and the GANN Theory. I have tried many times before, but hopeless. Gann is very difficult( for me) to be understood. The calculation pointed price 1177.75 or 1187.58,which is at 360 degrees angle and date -03/26/2010  or the day before or after that date as a reversal time point.
                 I know, that many of the EW followers will say- tell us something we don't know! Yes,but that was according to the GANN Theory only, taking  the 02/05/2010 -1044.50 bottom ONLY.

Mar 22, 2010

AMD - Elliott Wave Analysis

                On daily base the well known US company AMD probably has made a potential historical bottom ($1.63) in November 2008. Since then I can count only impulse waves – Probably we are in ii of I of 1 of (1) waves, which means, that if that count is correct we can see the most mighty, bullish extension since Nov2008 bottom.
              I suspect a “flat” correction underway, which looks unfinished. Probably reaching $ 7.92- $ 8.10 resistance is going to look better. After completing that potential “flat”, and that resistance level hold the price, I will have the reason to expect bounce up for iiith wave of Ist wave of a 1st wave of a (1)st wave. Yes I know that looks little complicated.
            So, if the price action doesn’t “obey” to my desire and dip lower, then we should see closing the gap $6.17-$ 5.35 and testing the $ 5.31 support level, which will be the key level for the further price exit. If that level find support among the bears -AMD is in a BIG TROUBLE.
According to the data base we have, and calculations can be pointed the first target of a new potential, tight bull trend-$ 16.90.
$ 9.75 is a good conservative buy level.

Weekly base

Mar 19, 2010

SPX - Some thoughts

That is the best count  I can suggest about the grand picture. The look to DJIA similar as well.
 The price is getting weak and diverging  according to MACD and few more technical indicators on 4 hour base. Sometimes, when the wave structure is difficult to recognize I use technical indicators mainly, until the picture gets more clear.
On daily base, I really don't know what is the next formation type- (contracting triangle, expanding triangle, flat or any complex), but I am sure, it we will be a great challenge for the traders. Now the price will need  longer time (few months) to have a break before the final bullish push. 
Probably some of you are thinking  that I am talking  nonsense about bull markets and such stories. In December 2009, when I noticed something rotten in the bearish case the bulls were very few.
Some of the EWP followers are on the way to screw up the real meaning of the Elliott Wave Principle. These guys were calling and believing in the EWI crash wave 3 and "going all in" are not respecting the price action. 
 Yes, the bull market is a fact. I can't count any impulse up at all, but however, the market is up.

Let the force be with you :)

DEN 20 - There is nothing rotten in the state of Denmark

                       I decided to "walk" to northern Europe, and found something interesting in Denmark. The local index DEN 20 has made beautiful impulse, which is almost done.
The wave count I came up with, is for an impulsive five waves. There are many, many gaps, but so what. The price is very close to resistance since July 2008 and I will keep it on eye next few weeks. My expectations are for corrective reversal soon.

The picture in 1 hour chart doesn't show signs of  reversal yet. If I notice any , I will make an update.
I've been to Copenhagen once, and can assure you - There is nothing rotten in the state of Denmark.

Mar 15, 2010

The Hard Rock music and the Elliott Wave Principle part II

                                                      PART II

             In the beginning of 60 - groups like “The Beatles",” The Rolling Stones” change the rock by accessioning greater sounds, heavy guitars, loud drums and strong singers. That sound  becomes the hard rock’s ground, and leaves a deep sign in my musical culture later. That style forms at last and becomes known at the end of 60s . Deep purple and Led Zeрpelin help out for its imposition with their first albums.    Note that then the world indices are already consolidated.
            During the 70s the assortment of other genres evolves from the hard rock. Queen mixes hard rock and heavy metal, progressive, even opera.
        Like every economic trend, and the musical one makes corrections.
 In 1980 Led Zeрpelin breaks after the drummer’s sudden death. The AC/DC’s vocal- Bon Scott dies  in the same year. Thereupon the fact, I have reason to suspect the end of the first  from third wave of "classical" hard rocks-bands.
   Some groups like Queen even goes away from hard rock sounding, they oriented to the pop-rock.
        The end of 80’s, according to my screenings is the most successful period for the hard rock music.
       Based on the wave counting, I suppose to expect third of a third wave. The first places in the musical rankings have been reached by hard rocks bands mostly. Bon Jovy’s "Slippery when wet" (1986) stays for 8 weeks in ” Billboard” ranking.  Europe’s "The final countdown" reaches a number-1 in 26 countrys. In 1987, the most mind - blowing albums are" Appetite for destruction" of  Guns’n Roses, and  Def Leppard’s “Hysteria”. I know that I cut quite great names in hard rock and their interpretation in the rankings, therefore expect all fans to forgive me.
         In the beginning of 90 appears new  combinationpunk and heavy metal and other styles . The bands who make this manner are Nirvana ... . . I do not remember about others.  I offer  to label this period as a fifth of third wave. Then launches a range of genres with hard core, rap and soul mixture. I intentionally missed  to enrich my musical culture, because I prefer the classics.
        I have the reason to suspect  beginning of wave four  around the beginning of the new millennium.This period begins I think with apathy about  the fans and the rocks-bands. The concert manifestations are rarity, probably due to the concern about avian flu  infection, anthrax or terrorist  assaults. The world indices as well went in corrections . The fourth waves have consolidating character .
      Fifth waves are usually based on extreme and mindless optimism.  Their form is different  and depends on previous 1st and 3th waves proportion.
       In the beginning of the new century older and gray, some of my favourite groups begun to make songs, singles as well, validated their concert activity and even visited my country few times.
       I offer this period to be labeled as wave number five. During this wave i was really happy, because one of my dreams came true.  I had the opportunity to watch my favourite rock bands live. I visited in a three years period Deep Purple, Whitesnake, Ronnie James Dio and Rainbow, who brought dose of harmony in my soul.
       The most famous recent hard rock-bands have members from last century groups. For example “Velvet revolver” has member of the ex Guns’n Roses. These groups make secondary  meetings out and events
       Led Zeppelin export one concert and revive the hard rock-pastime again.
    According to Elliott Wave Model if we have five waves in one direction suppose to expect three waves (A B C) in the backward direction.

      I have reasons to think that the correction has already begun. What exactly do I can expect in times after this correction still can only imagine, but possibly the rock music will receive some other kind of sounding. I really hope that kind of the rock to sound like Deep Purple, Whitesnake, Rainbow, AC /DС, Def Leppard and other rock dinosaurs. 


Mar 12, 2010

DJIA - A sight from the ridge

              Probably some of you remember my post DJIA update-bullish signs  (Feb 10 2010), where I suggested scenario about the current picture. That scenario was totally different than the most preferred  in EW Sphere. The time is on the way to prove that lateral truck picture. 
              Now the 1 hour chart is giving me some mixed thoughts about the wave count. It seems better as 3 waves rally, still holding the price over the trend line. Despite that, looks a bit sloppy to count it as 5 waves for now. 

                  The best count I can suggest in daily time frame is a triangle formation to form, and very difficult range trading for the next few months. The difficulty comes from the fact, that the traders will need to turn from bears to bulls very often. It will probably cause lots of loses to the not too flexible ones. According to my time calculations that bull rally will probably show signs of exhaustion around the mid of July 2010. Then I suspect it will begin the down turn phase of a larger degree. Other- alternative count, which I didn't label on the chart is downside rally, breaking 9 835 low and painting one more "zig-zag", and resuming the bull case after that. We'll see next few weeks. 
 Very short term I am bearish, expecting possible 10 042 test.
While I was keeping on eye PUT/CALL Ratio, I noticed that the indicator crossed the DJIA trend very dramatically. That shows the PUT OPTIONS quantity last few days has risen rapidly. It is a very bearish sign.
         According to AAII, the bullish expectations for next few weeks market direction have risen to 45.3%. For me that suggests bearish expectations as well. 

Bullish 45.3%
up 9.4

Neutral 29.4%
down 8.5
Bearish 25.3%
down 0.9

Any other ideas?

Mar 11, 2010

The Hard Rock music and the Elliott Wave Principle

       I wrote this material almost one year ago, but i lost it somewhere in my PC hard drive. Fortunately few days ago I dug it out. 
    First I want to appologise about the botchy translation, but I think the idea by itself is more important, so leave the market for a while and read this;  
                                                                            PART I

              As a huge hard rock fan, I will try to apply this type of music as a social mood, its beginnings and derivatives to the Elliott Wave Principle.
          The blues originates at the end of 19th and the beginning of the 20th century.  Largely the country-music has been brought by the white emigrants in North America.
              Most of us know the meaning of "the blues"-, melancholy, depression etc. In the blues the escort has been with a guitar and banjo. The love, the farewell, the death, the slavery and the similar excited-physical states are the subjects.
             We will review that period as wave 1 of one musical trend, which has reflected in itself the crowd’s emotional condition. Typically for the first waves in a new bull trend is, that they are build themselves when everybody are totally despaired , concerned about the future. That period is overlapped by the world economy, which is at the doorway to the strong rise unseen for all time, whose pick achieves in 1929. We all have heard about that year.
           Wave 2 normally begins, when the negative spirits are still in evidence. At this time the news are even worse, than they have been near the previous bottom, but despite this the mass stock selling and the fear do not manage to bring new low. Prices do not fall under the previous bottom.
               Next few years the music gets curling up as a social mood. Some names in blues are confirmed in this period /1930-1950/ as Moody Waters, Willie Dickson etc. That time matches with the Spirit Prohibition and the Second World War.           Let’s label that period as wave 2.
          In 54th "Rock around the clock" with guitar and drums accompaniment by Bill Haley blows the crowd and become a hit very fast.
              Then begins wave 3 according to my point of view. That is the best thing could happen to everyone. It is a suicide standing against the 3th waves.
  Wave number 3 matches with the rising economic trends and continues to nearly 2000 year.
              In the end of 50s - Radio announcer used the concept-rock"n"roll for the first time, which is blues and country mixture. Then that style is presented and sung only by Afro-Americans as Chuck Berry, Little Richard, Beau Didley etc. A deal of great contribution gives "the boy of America" Elvis Presley. We have to mention Buddy Halle, Jerry Lee Louis and Johnny Cash as well.


Mar 7, 2010


Probably hurts.
          I view the bull action as likely a final move before a correction. Technically, the price is overbought in 1 to 4 hour time frames, and DJIA is squeezing every ounce from the bears.
         Now the most likely scenario is for a rally to continue in today's session little more higher - around 10 600, completing (C) wave of a (Y).  Then should be followed by a down turn phase.     
                  The Daily Index Sentiment is pitching into the extremes again.
Put/call ratio 5 day MA crossed down, supporting my bearish expectations. 
Let the force be with you:)

Mar 4, 2010

DAX - Elliott wave update

The current up move (a) looks completed in 5 waves. I expect a brief action (b),  reaching 5 650 area, where is the red bear back test line. That action is also called correction of the correction  in the next upward move to new corrective high in next few weeks. I remain modestly short, and expect a lateral track for a few sessions.

Let the force be with you :)

Mar 1, 2010


      Last month I was thinking about end of (B) wave of a potential "expanding flat", but last few weeks the price action put me in doubts. The main reason is that the downside move's wave structure looks corrective about now. I have labeled a corrective complex- W, X, Y, made of "zig – zags”. In addition February produced a reversal candle on daily base, confirming a significant low.

     As we see the Gold rebounded from the 1032 line-strongly and impressively. I do not  see anything bearish on the horizon about now. 
    If the price continues up, chasing that potential (C) wave, should paint just one more zig-zag, or any complex completing 'Y' wave. Then that count remains to be valid.
      If the upward move I expect paint an impulse 5, then the Grand picture would be totally different. It could form 5 waves of a larger degree.
     The tape now is a bit unclear as a wave structure, and I prefer to have little more data till the next update on spot Gold.

     The expectations are for new high to 1 252- 1 320.  The herd escalated with one more bull---me. 

Enjoy the video!