Elliott Wave Update

   SP500

     The odds for extended Minor fifth wave become real , but not confirmed yet. The positive market bias still leads the price. Next short term resistance 1299.26 probably won't be a problem, because the bulls missed to touch 1300 last week, and I'am sure they will make another attempt. And 1304 is important angle acording to my Gann angle calculator. 

    1270.67 appears to be very strong support at least short term. If the bears get this support in the course of the week, will begin a correction. If that happens, the move will be very lazy, and probably will nest the price at the next support/resistance- around 1249.  

      There are many bearish calls last few days in the blogosphere, but I realy don't see any meaningful reason for dramatic and sharp sell off very short term. "What everyone knows is not worth knowing". 

     In 1/19/2011 the price broke dramatically 1287.25, touched 1270.75,  and produced reversal daily candle, which closed above the pink line (Gann angle). If we don't see weekly close below the main Gann angle, probably the price will bounce directly to 1360-1378 range, without a roundabout way.

STOXX50

     The upper channel line just stopped the bounsing price, but not for a long time. Typically for this index is  extended first wave. It occurs very often. 

I haven't labeled this sharp move, because I am not sure that first wave has  already unfolded and complete.

    "Grand picture" looks the same as it was last month-bullish long term. We are getting closer to weekly, and very strong resistance 3025-3043. We have Head and Shoulders pattern, whose projected target will be met this year probably.

Good luck trading!

Market preview

        

         Santa Rally might over, but the Grand Rally (since 6th of March 2009) might not yet .

        

         What do we need when the current picture is not impulsive and we are involved in counting waves and waves and waves,but corrective (till now) and unclear?

         We are looking for other instruments for help.

        

          As Elliott Wave Principle  followers, sometime we forget  the basic, and very well proved Charles Dow's theory. The Dow theory has been around for almost 100 years, yet even in today's volatile market, the basic components and patterns are still remain valid. The Dow theory, like the E.W. Theory  addresses not only technical analysis and price action, but also market philosophy.

      

        While I was previewing  few charts in daily base yesterday, a small lamp blinked over my head...(again)

I saw  it  in early August, but didn't pay it much attention.

         I've enclosed few charts; Just take a look at the first one - the main one.

      

 Isn't that the first one classical pattern we've learn about: Of course- HEAD AND SHOWLDERS.

As most of you know that's the formation, which has very high probability- about 90%,as much as in EWT.     

                                                                          One more chart:

 One more:

One more:

And one more:

 How do you think :

Don't they look like a big twin family?

Bubbles stories

           

           When someone says the financial bubble has burst, we all know what "burst" means: A decline in stocks, indexes and real estate. Yet a  few people realize that the "bubble" itself involves more than just asset values -- it also involves psychology. And it's really important to distinguish between assets and psychology, for this simple reason: the end of bubble asset values does not mean the end of bubble psychology.

           In fact, mini-bubbles can happen after the big bubble has burst.

           Depending on how big the big bubble was, it can take a long time and a lot of losses to extinguish the psychology that drove it. It's easy to understand if you think about it. If things are not so good now, and better times are in the past, it won't take much to get the old enthusiasm going.

           Too much enthusiasm based on too little evidence is common to all bubbles, big or small. So here's where it gets tangible.

           Gold prices have recently pushed to all-time highs, the Dow Industrials to a new yearly high. But gold and the Dow have done this alone, as in NO other equity indices or commodities have followed.

           Now  which markets get all attention in the media? Gold and the Dow, of course -- to the point that people think the performance of these two markets is not the exception but the rule.

          Too much enthusiasm, too little evidence.

                                                                Enjoy the cartoons.

This is not a cartoon :)