Dec 31, 2009

Elliott Wave update

                 The picture looks almost the same as yesterday, no market makers left last few days, due to the holidays .The price seems to paint  any kind of "flat" or "triangle" corrective pattern, which is typical for 4th waves. Little more optimism is needed about 5th wave to be finished. Probably it will occur first few days in 2010.  

That is one of my counts, which shows almost completed complex correction(till now),only the (C) wave of Z looks unfinished.

That is other variant of my counting. According to this labeling the last wave of the W,X,Y pattern is not completed too.Very soon (early Jan.) the price will meet important resistance zone, where will be the battle between bulls & bears.


It doesn't matter which count is correct, the fact of bearish smell is all around in the air. I see many signs, that the market rally is running out of steam. It’s just a matter of time. Well, important tops are usually a process, not a one day event. Money first flows from more risky assets to more conservative. Then eventually it flees to bonds. And then it goes to cash equivalents. All that takes time. It doesn’t occur from one day to the next.
Some facts, supporting the bearish idea. 

  1. According to AAII Sentiment Survey( American association of individual investors ), 11.5% have turned into bullish camp only for one week.   

up 11.5

up 3.2
down 14.7

      2. The price moves up, but volume is going lower last few sessions. This is based on individual investors naked optimism. More investors (speculators), less money.
       3.Put/call ratio is going lower.
I don't have to reject next chart as well. I expect any dropping soon, but  I do not believe that this cyclical bull move is done yet. As I said - it's a question of time. 


Wish you Happy holidays, God bless you all !
And better trading in 2010 !

Dec 29, 2009

Elliott wave count on Gold

           Probably you have heard the maxima that Gold is not only an inflation hedge, but also a deflation hedge.It is wright. I believe the Gold will shine a lot next few years.  

         A general strengthening of the USD could break the back of the speculative element in gold as of late. Although I am  long-term bull on gold (believing it could reach $1,500 within 2014), this trade seems to have become too easy and too widespread to pay out in the shorter term. A serious correction towards the $870 level could shake out the speculative community while keeping the metal in a longer-term uptrend.

The Elliott wave count shows us short term bearish expectations according to my labeling.

Good luck!

Dec 28, 2009

Elliott Wave update

  Hello,  speculators. I am back again.  I hope you had a great Christmas Holidays.      

  However,  my alternative  count  came into play. And prise action doesn't  still show us reason to cover the long trades (if we have). 
Today the market did 6 green sessions I think.  I have labeled (V) wave as extended, which is probably due to the Christmas spirit  :-)   

See you.

Dec 22, 2009

Djia- update

I guess this is the market where most want to know when does it stop, well there is at least 3 variations how you want to count this particular move, as its gone from a clean 5 impulsive waves down, to a mixed pattern, where depending on the skills of the analyzer/Elliottician, those counts come into play.
However, if you have noticed the move up, on the counter 5 waves down (according to me)  has been very sharp and strong (typical for 2nd wave pullback)  
I am going to let the market now prove my count. 

Dec 20, 2009

DJIA - update. Correction of the correction.

              I call "correction of the correction" all that rally since 6th of  March 2009 till now.
And now I have a few reasons to expect downside move, which is correction of the upper  "correction of the correction".
                                                 I think became too complicated.

  1. First one is a huge divergence to many indicators and price movement on daily base MACD,RSI, etc. 
  2. All that straight rally hasn't got it's big enough correction  ( 06/11/2009-07/08/209)
  3.  The bulls advanced to 52.2% from 48.4% a week ago. That is the most long-term optimism we’ve seen since December 2007, when their number was retreating from 62.0% shown at that October’s all-time market high. A year later at the first bear market lows the bulls had slipped to just 22.2%.         Advisors Sentiment Table
    S&P 500
    Advisors %

    Advisors %

    Advisors %

    Tue Dec 15, 2009
    Tue Dec 8, 2009
  4. We are very close to end of  Fibonacci 3th cycle on the chart (orange dotted vertical line)  
  5. I think we have 5 impulsive waves down.

                                                                       To many reasons.

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?

Dec 18, 2009

DJIA - Santa Rally might over.

                It's majesty-the market make us all dump heads almost all the time.Now I feel like that, trying to predict next Dow move. My both charts review two different directions. I know that you have seen that movie (the price will go up or down), but the current tape is very unclear (for me).
                        That's why I released two counts.

               Firs one shows completed (5) wave, which is truncated after completed "expanded triangle", and marks the end of (Y) of double zig-zag.
The first leg down is underway and (V) of 1 is still incomplete. If the price breaks 10 235 key low will confirm that count.

               Second one shows (I) up after completed "expanded triangle  and very deep pull back as wave (II) as "zig-zag".
If the price breaks 10 235 low will eliminate this count.

I bet on the first chart.

Good luck !!!

Dec 14, 2009

DXY - USD Index - 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".At the bottom the bulls were over 90 %. In my post - Nov 25th  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 wave up.A small correction is expected next few days, reaching 75,49 area, where is 50% Fibo retracement,  and then up again.

Good luck!

Dec 11, 2009

DJIA- Peak rally- short term

                                        Have we made a truncated top?, I still don' know .no,

                 I am not really sure about that wave count until the opposite is proven by the price paintings.



I still wait for my fifth wave (5) to extend little higher to complete the pattern (W,X,Y) i have labeled. Also according to  Fobonacci time instrument, the reversal moment is very close, nearly 21-22 Dec.2009.
Interesting point of view comes from a colleague ewaver. Filipe Miguel has put all these, nearly 1 month SPX's squiggles in a frame,called "Diamond".The "diamond" is  trend reversal  formation, which means that the price will drop down early next week, which is very possible too. He made very sharp forecast about EUR/USD last week.

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 :)

Dec 9, 2009

DJIA - update


                                                           The triangle pattern looks completed.
                                             Get ready for the X-mas rally until something goes wrong :)

Good luck!

DJIA - update (last call for the bulls)

                                             Hello wavers,
             I've got an important info to share with you today.

            According to Investors intelligence advisors sentiment, this week’s data included a new twelve year high for the advisors projecting a correction, along with lower readings for both the bulls and the bears. As things stand, the indexes continue to bet with 2009 highs. Pullbacks last week was brief and followed quickly by new buying. However, I have noted a narrowing of the participation.
            The bulls were down slightly to 50.0% after last week’s 50.6% reading, which equaled their September high. Both are still up nicely from the start of November, when a market pullback saw their drop to 44.4%. The advisors continue to show a major sentiment shift from a year ago when the bulls were just 22.2%. That was almost a twenty-year low going back to 15-Nov-88 when the bulls were 21.1%.The bears have left very fewThey were just 16.7%down from 17.6% the previous week and 26.7% the first week of November. That is the least bears since 13-Jun-03 when we counted them at 16.1%.
            The long-term bears are at their lowest level in over six years, while the short-term bears (those for a correction) are at their highest level in over twelve years - a very unusual pattern, according to them. The bulls are also well below where they were at the market peak in October 2007. This shows there are not a lot of bulls out there. But there are also many advisors who would like to become bulls if the market pulls back. As the markets often confounds expectations, I could see a year-end rally to new highs that could force the correction camp to capitulate and buy on strength. That, I think, could mark the top.
            The difference between the bulls and bears was 33.3%, up just 0.3% from last week and another bearish reading. Remember that last time we had such a large negative difference was in late 2007, just after the all-time high in the DJIA, pushing the  spread over 40%.

S&P 500
Advisors %
Advisors %
Advisors %
Tue Dec 8, 2009
Tue Dec 1, 2009
Tue Nov 24, 2009
Tue Nov 17, 2009
Tue Nov 10, 2009


My expectations are for higher prices after completing the "triangle pattern".

My longer term count :


Good trading to all.