EDIT 6PM, 5 Feb: As per Transform’s suggestion below in Comments, I too think this may be a 3-3-5 flat playing out in minute wave [ii] of 3 of (5). I jsut seen it and checked comments and sure enough someone else saw it too. I’ll post some charts later. That would imply the up correction is over.
EDIT 8:20 PM: I updated my commentary because I had time to chart some waves and I don’t want to confuse anyone however I left intact the reasons the market may go up Friday or Monday. I also added 2 charts on the overall count. My count has the move being over. However that would once again seem to fly in the face of market action. And since the SPX still appears to be in corrective mode, and no hard evidence of a true impulse down again, therefore the correction may morph into something more complicated.
Bottom line: Until the SPX starts revealing true impulse 5 wave structures to the downside again, I cannot say for certain the move up is over. But I certainly charted it that way. Yesterday was not a “five” it was a “three” and ended at 818 at the lower trendline.
These are reasons I wrote down earlier on why the market may move over 850. I left them intact:
1.) Huge gap above and there never was an attempt yet to fill.
2.) Market in limbo until some kind of bank plan is unveiled (apparently that would be Monday) Traders are not ready to pack it in until then.
3.) Positive divergence on the DOW 60 minute charts.
4.) NASDAQ was just too bullish.
5.) On Minute wave [ii] of 2 of both intemediate (1) and intermediate (3), this retrace retouched the 50 DMA. I don’t see why this wave won’t do the same. The NASDAQ may be in a slightly different count by then, but that won’t matter too much.
6.) Bottom line that gap down is just too large to not have an attempt at closing. I think the market at least moves to under the lip and attempts to close it. Also 1 more touch of the 50DMA which resides in the upper 860′s.
Elliott Wave Update ~ 2/4/09?
Well,
To me they all seem like EW updates on 2/2. Groundhog Day.
Sorry Daneric – I am not really into EW. But I could not pass-up an opportunity to play the words.
Hehe, yeah what grinding market.
GH Day indeed. That was my handle from Wed.
Anyway, I thought we were past (ii),[iii],5,(5) but this seems like a well formed 3-3-5 flat from Feb 2nd, so that’s what I’m going with. I think (iii),[iii],5,(5) starts tomorrow.
I just had the same revelation. Transform your on it.
Transform:
What does this mean in terms of market action tomorrow (i.e. how do you see the wave playing out) ?
Thanks
I’m kind of a superstitious person and I believe in a very screwy notion called the Heisenberg Uncertainty Principle, namely that simply observing a thing changes a thing. And certainly if too many people see a thing it can change that thing. Therefore I’m reluctant to say because it might jinx it. Ask me tomorrow!
ha ha!
STRONG INDICATOR WE ARE HEADED LOWER VERY SOON:
since im only right 7% of the time.
the fact that ive hedged my short positions with a long position on the SPX at an average strike of 845.50, the market is about to tank soon
I thought it was 6%. You’re up to 7%! You’re on a roll.
Had to change my name back… I’m so tired of hearing “wave 5 down has begun, hold on to your hats”… and then… nope, it’s just more zigzags, more upswings, more annoyances.
Not blaming Daneric or anyone else of course, just griping that I’m tired of the market games.
As they say, if a bear market doesn’t scare you out, it wears you out. In my case it’s annoying me out.
updated chart:
http://social.stocktock.com/photo/photo/show?id=2348194%3APhoto%3A15026
WHAT NEXT? this 2 DAY BAR chart can handle 2 more days or maybe 4 … but really, it should begin to show its hand tomorrow. of course, that is what we want because we are sick of this conolidation, coiling, manipulation.. whatever you want to call it….its dizzying.
here is my day: up $2800… up $1237…down $203… day over.
being a permabear is tough some days. but, if i didnt listen to the message
of the market first thing this morning… id be alot worse off! or maybe im worse
off tomorrow doing what i did today. time will tell. just being safe.
we all know one thing. 600 on the SP is nothing anyone wants to see. the Government will do everything it can to hide the depth of economic problems drowning the USA. cant blame them, even if they are propping this market up. if they are doing this, they are just trying to buy time to fix a problem they can’t fix. why are they taking so long to decide how to fix things? cuz they can’t fix em. however, they longer they keep people believing it can be fixed the softer the fall? hopefully this is right.
annoyed again, then you will be glad to here that $NDX violated wave 3 (5) today!
Kenny:
What are your thoughts on tomorrow ? I noticed you have not yet updated the market day commentary on your web page.
Thanks
NASDAQ closed above 50 day SMA (and 20 day SMA) today, and it looks like it wants to go up some more (it has some momentum behind it). My guess is retail customers will be buying tomorrow and institutional traders will be selling into the strength.
If tomorrow’s job number is “worse” than expected, my guess is that the SPX will briefly touch the 840 mark, then it will go up from there. For the next few days, I think bulls are gunning for the SPX 50 day SMA (currently at 869).
Trying to count the waves while trading and dealing with government market intervention today were not fun at all.
annoyed has echo’d my feelings a bit as of late. absolutely no disrespect to the ewavers intended, but i see more often than not ewave analysis that tries to anticipate trends and just ends up being revised subsequently as more of an explanation of trends that occurred. as far as anticipatory tools, it’s starting to fall way down on my tool list (more standard TA and fundamentals are on top, though that may be more of an adjustment to our current volatile market). that said, I have made some money off of ewave calls (especially long term investments) and have much praise for you guys that give us the anlaysis
I’m with you on that.. Seems like it’s impossible to know what wave we are in.. and that the whole mechanism is set up so no matter what happens,, there’s an EW explanation.. Oscar says EW is for loonies.. I think he’s a loony,, but I can definetely see how EW vagueness & flexibility is not as reliable as other TA.
EW isn’t for day trading in my opinion. Swing trading MAYBE, medium and long term, almost definitely. I’m using the EW for my retirement money since I can’t trade it in and out easily. I have a small daytrading account and have found that I just don’t have the eye for it. That’s ok, it was just for fun and I’ve lost a few dollars. If I can get back to break even I’ll call it quits and focus on the longer term swings and trades.
I find EW fascinating. Any time you can find patterns within chaos I’m intrigued.
After tried to understand EW using Prechter book, I gave up. Finally I got another source that teaches this subject in a better way.
In the very beginning the author defines his approach:
- don’t try to apply this analysis every time because sometimes it does not work. In the average only 50% of the time you will find something that fits in the theory
- Elliotians have a tendency to try to explain every movement. This cause those change in their forecast. Don’t waste you time with corrections and extensions because they are pointless
- What really matters is a good forecast for entries and exits. If everything is confusing, let it go
Based on what I have been learning I posted something. Financials seems that are ready to explode in a beautiful 3rd wave. I would say if they surpass 01/28/09 top (XLF for example) I will be ready to surf it in all extension.
I do believe in a correction soon based on the major moves. Unfortunately on daily basis it seems that the basic support/resistance approach results in the same thing found by EW.
I have not went over everything yet and even so I could only point out strong points and weak points.
If you combine EW Analysis with other technical indicators it’s very helpful. Today was a news driven event not a technical one so many got caught going in the wrong direction. Tomorrow will likely trap the Longs going in the wrong direction as well to even things out.
Somebody say something about 850 spx?? Yesterday’s ‘dbl gum drop’?? I thought so…
2/5/2009 1:43: PM Order Filled You have sold short 000 share(s) of POWERSHARES QQQ TRUST SERIES 1. @30.71
Even better A/H…
Hi Guys — Very interesting today.. How come I just KNEW while all the bears were predicting this wave 3 of 5 Down that it wasn’t ever going to happen? I’ll tell you, it was because the fear was already spent from the markets. What’s another down day when the stocks are already kicking dirt? And what about that BDI Index I warned you about — Still Rising! Hmmm.. And then there’s all those Nasdaq stocks that didn’t make new lows below Oct-2002. Just another spent correction that’s winding up for a bust out if you ask me. I’m 100% long, and whatever Washington does or doesn’t do won’t make a bit of difference going forward.. Like I said, bottom’s in and we’re going UP!
Careful….
Jean,
No doubt about BDI. Totally bullish. However, you are 100% long? Show your colors….what are you long?
Financials, of course — BAC and C along with FAS, GNW and GE..
Also DRYS, forgot that one..
I say we finish the day inside the triangle…say 830 +/- 10
I just think everyone is waiting for geithner’s plan.
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&st=1992-01-01&id=p55089742552&listNum=1&a=160806638