Daneric's Elliott Waves

E-minis

2013-05-20T05:26:00.003-04:00

Elliott Wave Update ~ 17 May 2013

2013-05-17T18:19:00.004-04:00

The charts that matter are probably the channel charts that have been posted as of late

E-minis

2013-05-17T05:29:00.002-04:00

Elliott Wave Update ~ 16 May 2013

2013-05-16T19:03:00.000-04:00

For all practical purposes, the S&P 500 price has met the upper channel line. Price action over the next few days should be closely watched for either a final lunge up or a break of the red curve that has supported prices for the last year+.

If consistent selling occurs tomorrow on Friday (which is what the wave count supports), there would likely be a high number of "buying climaxes" triggered. Buying climaxes often cluster near major turning points.

Intermediate (C) counts complete and the form is very satisfying.

Squiggle count of Minor 5 of (C) also counts complete.

An example of extreme sentiment. The Hurlbert stock sentiment via Sentiment Trader:

E-minis

2013-05-16T05:27:00.003-04:00

Elliott Wave Update ~ 15 May 2013

2013-05-15T17:17:00.002-04:00

Why do we characterize the rally from the 2009 low as one giant historic corrective wave? Because when all things are considered, form is what matters probably most. And the form since the 2009 low has taken the clear characteristics of a corrective wave. Specifically a zigzag, or a series of 2 or 3 zigzags. For the sake of simplicity in this discussion we'll just go with single zigzag count.

Per EW guidelines a corrective wave zigzag (according to Elliott Wave Principle: Key to Market Behavior (Prechter/Frost) there is exists some simple guidelines:

* Wave C if often about the same length as wave A

* Wave B typically retraces 38 - 79% of wave A

* A line connecting the ends of waves A and C is often parallel to a line connecting the end of wave B and the start of wave A (Forecasting guideline: Wave C often ends upon reaching a line drawn from the end of wave A that is parallel to a line connecting the start of wave A and the end of wave B)

The last point is important because channeling (which is described in the paragraph above) gives us the form of the wave. And the form of the wave tells us if its likely corrective or impulsive.

Channeling in an impulse is different than a corrective wave.

An impulse pattern consists of 5 overall waves. What does EW guidelines tell us about an impulse pattern concerning channeling?

* Wave 5 often ends when meeting or slightly exceeding a line drawn from the end of wave 3 that is parallel to the line connecting the ends of wave 2 and 4 on either arithmetic or log scale.

What does it matter if the rally from 2009 is labeled impulsive or corrective?

1. Corrective implies that the rally is a correction to the main trend of next higher degree. Since the rally since 2009 low has been UP, therefore the HIGHER DEGREE trend - in which it is correcting - is DOWN. (social mood main trend is down at the higher degree). Hence, since this 4 year rally is being labeled a CYCLE degree rally, therefore the next higher degree trend is a SUPERCYCLE degree wave. This SUPERCYCLE degree trend - wave (a) specifically is labeled as a downward social trending wave.

2. Using channeling techniques can help us identify the major turning point. In this case wave [C] has nearly reached the "typical" turning point by touching the upper channel formed by the zigzag.

I never thought it probable that this rally since 2009 would have met this channeling guideline and hence prices had to move this high as a result. Yet traveled this high to form a channel it certainly did. Although prices are astronomical, the FORM of the wave fits perfectly with the idea of a cycle wave corrective rally all along. A touch on the upper channel line would be perfectly normal and a perfectly normal place for a major turning point.

By the way, the rise since November 2012 is getting an "exponential" look about it. Parabolic, and hence utterly unsustainable and susceptible to a most violent destruction.

E-minis

2013-05-15T07:53:00.000-04:00

Elliott Wave Update ~ 14 May 2013

2013-05-14T18:57:00.002-04:00

UPDATE: Update on the parabolic condition of the market. Showing both the Wilshire and S&P. Wilshire has superior channeling in non-log scale.

Wilshire count log scale:

Wilshire count non-log scale:

Equivalent SPX.

Everything "looks" right on the count below.

Adjusted squiggle count. Best guess is that minute [v] of Minor 5 is occurring.

E-minis

2013-05-14T05:34:00.002-04:00

Elliott Wave Update ~ 13 May 2013

2013-05-13T16:38:00.001-04:00

No change in the short term outlook or wave count. Best count is that Minute [iii] of Minor 5 has peaked and prices are in some kind of sideways Minute [iv].

There was an interesting ED pattern that played out intraday. An ED pattern at this stage would be labeled wave [v]. However, its suspect for now but I present it because the internal structures count really nice.

But like all triangles, we tend to label them too early. Perhaps this:

E-minis

2013-05-13T05:24:00.002-04:00

Elliott Wave Update ~ 10 May 2013

2013-05-11T00:44:00.000-04:00

Perhaps Minute [iv] is over.

Or not:

E-minis

2013-05-10T08:40:00.002-04:00

Elliott Wave Update ~ 9 May 2013

2013-05-09T16:54:00.001-04:00

Long term count reminder. Cycle wave b of Supercycle wave (a)

At the weekly level, the triple zigzag still is the best count as it satisfies the most rules and guidelines of EW theory.

Wave (C) of [Z]:

Minor 5 of (C). Would look better if we had a Minute [iv] and then [v]. Previous subwave (iv) of [iii] is a key price level.

Not only are stocks frothy (EWI reported a 90% Daily Sentiment Index reading in last night's update) but bonds are also quite bullish. Via Sentiment Trader:

Which asset class will benefit from a sellof in both stocks and bonds? Why King Dollar of course. Technically its ripe for a surprise upside move that will catch almost everyone off guard. A solid break over the neckline should guarantee a rapid rise toward the 100 level last seen 10 years ago.

Everyone seems to agree the Fed was and is out to devalue the dollar since its 2008 low yet they have failed miserably in that regard. Funny how we never here about that in this cycle b bounce. Will a dollar index at 100 be good for the Fed? The economy? Corporations? What effect on interest rates? What about the massive derivative market?

E-minis

2013-05-09T03:44:00.000-04:00

Elliott Wave Update ~ 8 May 2013

2013-05-08T17:01:00.000-04:00

Counting through the final subwaves of Minor 5. Specifically looking to confirm the price peak of Minute [iii] of 5.

E-minis

2013-05-08T03:35:00.002-04:00

Elliott Wave Update ~ 7 May 2013

2013-05-07T18:11:00.000-04:00

Form is what matters. And the form looks great for the count.

E-minis

2013-05-07T03:22:00.002-04:00

Elliott Wave Update ~ 6 May 2013

2013-05-06T19:17:00.001-04:00

Finishing out the waves:

E-minis

2013-05-06T05:23:00.000-04:00

Elliott Wave Update ~ 3 May 2013

2013-05-03T19:22:00.001-04:00

The current count:

E-minis

2013-05-03T03:58:00.000-04:00

Elliott Wave Update ~ 2 May 2013

2013-05-02T19:30:00.000-04:00

The ending diagonal triangle did not pan out obviously. The ALT line recognizes that the market may have continuing plans on rising to finish wave 5. It does seem that 1600 SPX is a determined target. No doubt there are a bazillion short stops at that level and just above. If the bulls can squeeze it over 1600, maybe they can force a panic buying spurt (which would count as [iii] of Minor 5). Just stating that the upside surprise is no longer surprising at this stage. At least we have a count for that if it occurs.

E-minis

2013-05-02T03:38:00.000-04:00