S&P 500

My short term bearish bias is getting extreme. Target  around 1243-based on the current count. If not correct- max 1215. 

Later I will put on air daily SPX chart.

STOXX 50

                           STOXX50I is already in the targetzone of it's H&S target.

 In the last update I counted 5 waves down and supposed brief upward correction, and down again. Unfortunately it was really "five", but "C" wave of an "expanded flat".  You know......, the market is always right and never likes to make the things easy for anyone. I was in the trap as well, but smell it earlier and covered my short without profit.

Gold - Elliott Wave Update

                 Since my last update I am bull on Gold . By the last week closing price, the gold confirmed its 1320 main target. On weekly as well as on monthly basis, it is a clear BUY for me.
In February the precious metal produced a reversal candle on daily base, confirming a significant low ($1044  per ounce). If the price continues up, chasing that potential (y) wave, should paint just one more zig-zag, or any complex completing Y of (B) wave of potential "expanded flat". 
             The price now is in the resistance zone ($1163  per ounce) and we will have to reckon on a stronger retracement to around $1120 and get the ideal buy entry for $1320 target, which could happen late July or beg. of August 2010.  

Trading Psychology, Plan & Risk Management

Trading Psychology

Covers trading psychology and how the optimum mindset for Forex traders involves having a trade plan and managing risk.

For many Forex traders, their trading psychology and mindset will ultimately determine the success of their forex trading business. In fact, learning how to manage your emotions while trading and training your responses to various trading situations is a very important aspect of maturing as a trader. Many rogue traders that caused huge bank Forex losses failed to manage their trading psychology well.

The primary emotions that tend arise when trading Forex includes fear, greed and hope.

Secondary emotional responses might include anger, frustration and elation. No matter what emotion arises for you when trading, it makes sense to have an objective trade plan worked out in advance that helps you manage them for optimal success.

Having a Trade Plan

Because of the volatility often seen in the Forex market, a trader without a sound money management component to their trading plan could be likened to a skydiver without a parachute. In the event of a string of losing trades, the trader’s account balance will drop much like the ill-fated skydiver without the benefit of a parachute to break the fall.

A large percentage of people that begin trading in the forex market fail mainly because of lack of discipline and poor money management. Without knowing how to deal with losing trades, many novice traders start “chasing money out the door” by committing a range of typical money management mistakes. Eventually they can end up losing a lot of money, perhaps even their whole trading account.

Nevertheless, having a good trading plan only comprises one part of the overall trading game. Knowing what to do when the going gets tough will eventually distinguish a successful trader from the other high percentage of unsuccessful forex market participants.

Managing Forex Trading Risk Effectively

Generally, Forex traders will risk between 1% and 5% of their trading account’s value on any given trade. Also, by always risking the same percentage, the trader’s trade size will tend to grow along with the equity in their account. 

In order to effectively trade with stops, the trader would do well to examine technical indicators and other trading signals and to place stop-loss orders accordingly, thereby maintaining a more objective mindset when trading.

Furthermore, trading involves making both profitable and unprofitable trades, and knowing how to manage emotions that arises from the unprofitable trades tends to matter more. When trading profitably, the money tends to take care of itself, but when a trader encounters a series of losing trades, having an objective exit strategy and knowing when not to trade could save the account from ruin.

Basically, having an optimal trading mindset that includes sound money management principles is not only essential for Forex traders to learn and practice, but can benefit just about any business. In fact, even people that do not trade at all can often profit considerably from learning how to manage their money better.

Once that important element gets taken care of, the next thing to do involves finding the best forex broker that suits your needs.

S&P 500 Timid trend line breaking

According to my EW count there are five impulse waves already completed.

DAX - Elliott wave update

Since my last update, DAX and most of the world indexes decided to play another impulse up. That probably means one more "zig-zag". The price have already met 423.6% of a 1 wave, and 261.8% of the I wave, moving in very sharp and tight trend channel. Perfect Fibonacci sequence in play. So, the time and place for deeper pull back probably came already. We just need to see short confirmation. As I said: trading overbought or oversold market without confirmation is looking for trouble.

I attach PUT/CALL Ratio chart as well, where the indicator dropped to new significant low. It means sell off soon.

Probably Ben will produce last spike today.

S&P 500 Final Rally

Here we go again "hungry for the market" after brief holiday(s).
 The market action is on the way to complete the last of the last wave 5 of the (a) wave of the potential "zig-zag". The time gap for the first obvious target is going to close next week probably. Possible targets 1200 or 1215 max - and then down for (b) wave.

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!

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.

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$

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.

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

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.

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  combination:  punk 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 1^st 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. 

     

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?

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 19^th and the beginning of the 20^th 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 54^th "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.

TO BE CONTINUED …….