EDIT: 9pm Added a 1 minute Intrady wave chart. Yeah its detailed, by I find it fun to do!
Primary Count: Subwave [v] of 3 of (5) continues to advance downward to capitulation low.
A (close) alternate: Wave 3 of (5) bottomed today at 677.93
I’m still bearish for a few reasons:
1. VIX is still lower than the wave 1 of (5) VIX reading of 57. I expect the FEAR on the bottoms of wave 3′s of this size. So far, complacency still rules. One reason is because the markets have OBEYED a neat, concise, trendline for almost a month. A break of that trendline would likely finally induce the proper amount of fear and panic selling-type capitulation bottom.
2. CPC is not yet where I expect it to be. Is getting there, but along with the VIX, it needs some more movement to put-heavy in my estimation.
3. The intraday wave pattern looks goofy if that is the “end”. It has a valid count and structure, but it looks like it wants to “fool” us into thinking its all over.
4. If that was the “bottom” of wave 3 of (5) I expected a violent rally. So far futures are very tame indeed.
5. VIX closed over 50 and its ascending triangle and DMA’s look on target to break above 53 and then 57.
The perfect way to end this wave 3 of (5) is a plunge and VIX spike to 60+ ( I have 65 as an ascending triangle target for VIX). The panic bottom could trace out quite surprisingly low.
Bull’s case: There is positive divergence on all charts for the past week. I show 3 charts.
1 chart shows the primary scenario (plunge) and the second shows today as the low. The 3rd chart shows the month long trendline, that if broke, would surely panic even traders….
nice. did you see the possible ending diagonal on the minis. the minis look done while SPX does not. maybe your flat accounts for this
Yeah that part of the structure was buggin me. I couldn’t see live volume (for a hard turn) so I was unsure if I should buy some longs (I was at work).
I nibbled a small portion of TNA…I hold it and add heavily tomorrow..
Also where I have black v on my 1 minute chart could be “b” in an expanded flat…and tomorrow will bounce upwards toward 690
This wave count excercise just about melted my intelligence circuits. Anyway like you I thought the count was complete at the end of the day, but something just didn’t look quite right about it. As blue was saying last night the 3 wave turned out to be longer than thought.
my feeling is that we can overcome the oversold condition by trading flat on Friday and Monday and simply continue to plunge up to OPEX week and have a violent rally to negate all the 600 puts being sold during the next wave of selling.
1. continued selling with consolidation days to remove oversold indications
2. violent rally to end the wave and leading into opex expiry
3. closing price on the 20th 660 – 690 range — favouring the upper side of target
billions of dollars of calls expire worthless and gazillions of 600puts are bought during this next decline to expire worthless as well.
I appreciate all of the hard work you and other technicians put in for the rest of us trying to learn. What I remain haunted by (hate to beat a dead horse) is the erie similarity that continues to follow the 37 charts, which if it continues there will be no bounce until way into next week…can you comment on that or is this where we diverge from that chart all of a sudden…thx all
Yes I know what you mean. It is always on my mind. But certain TA indicators should give us a heads up to where we are. I like the VIX and CPC which tells me we are likely not there yet. If the SPX goes to 652 tomorrow and VIX and CPC are about where they shoudl be and the wave structure *looks* correct, I count down the last 5 mini waves and buy buy buy….
Its worked for me on Oct 11th and Nov 24th bottoms. I suspect it will work now.
Your just felling the fear man…its normal.
this im agreeing with. flat days will removed oversold condition. the violent bounce will begin the morning before opex week and hit its peak on the 20th
this is how im playing it. moved back my turn date from the 6th to the 10th+ and will trade accordingly unless the market proves otherwise. there simply is no enthusiasm on the buy side.
Let me first start off with a thank you for all your hard work. Two things..
First is their a book you recommend for someone that really wants to learn the charts ?
Second..Could the fact that the NASDAQ held above it’s nov lows be enough to change the trend of the market and put a bottom in place? The Dow & S&P tried , but didn’t hold. Nasd was the culprit for the last bear market would be nice if it takes us out of this one. If the nasd breaks 1295 I see a huge plunge down for all indexes.
Kenny’s blog has a great list of books. Address is on his chartlist on stockcharts. Social also has a book section.
i thought there was a rule that two out of (i), (iii) and (v) had to be of equal length? and (i) != (iii), so (v) has to equal (i) or (iii)? Did I misunderstand that?
So far, I am up 80% in the last 4 days. I should just walk away but instead I went in huge on FAS at 2.61. I mean huge.
FAZ is way to high to be up at the opening, although I might have to exit within the first 5 minutes, though. Mathematically, it was very hard for FAZ to reach a hundred. This week’s creap was perfect for it to climb. FAZ will kill you at this level so caveat emptor.
Hope I didn’t screw up.
In such case why not try TNA, BGU and SSO? Are you certain though?
My main decision was based on my estimation of the jobs report and the reception of it. That combined with the cremation of FAS over the past week.
way to go 3min. glad to hear you are crushing this puppy.
I wonder if there is any chance that the put/call ratio is a little scewed because you just can’t buy that many puts
Look at BAC and C…how many out of the money puts are there now compared to a year ago. The same came be said for wfc, ge, gm, F…
you cant buy puts on $1 stocks.. good point
Question for Daneric:
Do you agree with this thesis?
http://www.thedisciplinedinvestor.com/blog/2009/03/03/elliot-wave-where-are-we-in-the-wave-structure/
Yah, I was a little peeved about that ABC correction and the idea that we’ll have a 5 way up at 16000 DJIA…or so the thesis seemed.
Daneric: Today felt really good. Not just because we were correct, but also because we did the opposite of what Hochberg advised (on another one of the several occasions where he was wrong).
I struggled this eveing to determine an acceptable wave count for this 5 wave that we are currently close to finishing up.
I believe that wave 1 was extended and wave 4 is a triangle that we are currently still within. I will know by tomorrow if this triangle interpretation is correct.
If this thesis is correct then we should head up strongly after hitting 671 (+/-).
I am a bit uncomfotable with the expanded flat interpretation. It could be right, but expanded flats are quite rare.
Here is a link to my chart: http://social.stocktock.com/profiles/blogs/elliott-wave-count-for-wave-5
Check this out:
http://social.stocktock.com/profiles/blogs/comparing-5-march-with-29-jan
Great charts.. Curious,, what confirmation do you look for to let you know if wave 4 has started or if 3 will continue? Meaning,, could it go up to the 700 level and then turn around to finish that 3rd wave at 652?