6/11/13 - EOD Update

Here's a long term count I presented a while back almost a year ago. Either Grand Super Cycle 5 is ending as an ED or Super Cycle 1 is a huge leading diagonal.

Of course the most bullish option is that wave 5 is in the middle of extending through it's Cycle 3 wave.

Just something to consider.

Just wanted to add the daily BB chart. Note the rejection this time at the 20 day SMA vs the previous three moves.

Daily BB

The market took everyone for a ride today. Looks like the right shoulder for the inverted H/S may have been set today.

I'm still looking for a another leg higher whether it is for wave C black or wave (III) blue. In the meantime, wave B black or (II) blue may still be in progress.

We'll see if the bulls stage a comeback tomorrow.

15 Min 

9/13/12 - EOD Update

The triangle played out as expected yesterday. Not only did the market target 1440-1450, it decided climb an additional 10 points from the triangle thrust target.

Now the question is what does all this represent? I'm still struggling to find this as an impulsive structure so we shall see if the count below finally completes.

Did Intermediate (B) finally complete? Should one fight the Fed? Hmm...

Lets keep an eye on this potentially long term Ending Diagonal

A Long Term Count Update

I like this view. Too bad it takes so long to confirm things. Just some food for thought.

Weekend Thoughts [11:48 AM Update]

[11:48 AM Update]

I realize I didn't clean up this count in the Fri's EOD Update. This better represents what I'm thinking for this count.

For those who own  a copy of the "Elliott Wave Principle", Frost and Prechter, 10th Ed,  figure 3-12 on page 124, best represents this count.

You can also view page 124 here at Google Books.

So based on this, one more bounce is in store for wave (e), which at the moment would equal 1168 if it chooses to rally to the top of the trendline. Keep in mind though that wave Es in triangles do not necessarily have to tag the trendline.

Blue2 Count Updated

Weekend Thoughts 

Frequent readers of this blog should know by now that I consider the longer term counts more of an academic pursuit rather than a practical tool for the purposes of trading. However, if I had to choose, the Long Term Cycle chart below is considered my primary count for the long term which I have been tracking for some time now. .

Long Term Cycle

Notice at this much higher degree of the count there are still several possibilities and it will take years to rule them out. On a more bearish note, the monthly MACD closed with a sell signal last week and was completely rejected by the longer term trendline. This may be hinting that a move back to the lower purple trendline is in store.

For the moment, I have considered Cycle X of Grand Super Cycle 4 complete and Cycle Y has been in progress since the 5/2011.

Cycle Y may take on 2 patterns. Either a zigzag down to the blue trendline near 840 or it forms a large triangle that may take the next 7-8 years to form.

Guess what, this may be one exception to the academic pursuit of this longer term study. Should, and I stress should Cycle Y form a triangle, this may be the only useful count for longer term investors over the next 7-8 years. The green converging trendlines may serve as a guideline when to stay safe in cash (which would be now) and put money back to work.

Should one choose to take on a little more risk, investing the A-B-C subwaves of the triangle may also be a strategy. **This is not a recommendation but only an opinion should a triangle be playing out. 

Now for the alternates on the above:

It is possible only Primary wave W of Cycle X completed at the 5/2011 high and now Primary wave X of Cycle X back to the 1010 low.

5 Year

Here's a closer look at the Long Term Count above and what I have been tracking over the past several weeks. I have posted this chart more frequently and updated the labels a bit to match the much longer term count above.

Weekly

I'm still watching for a possible repeat of 2004.

Daily - 'W' Bottom

Shorter term I'll be watching for a potential 'W' bottom set up again on the daily chart. If a move below 1114 occurs over the next several days while maintaining above the lower band, step 3 may be considered in place.

Long Term Channels

Let's see if the market finds some support at the intersecting channels near term.

Long Term Channel Closeup

A weekly inverted hammer candle may be setting the market up for a reversal. Let's wait for a weekly confirmation via a gap up or long white candlestick next week.

HG - 5 year

Copper futures looks fairly consistent with the SPX 5 year chart above. This counts pretty clean so we should watch this since it is accepted that copper typically leads the market.

I have the pullback either complete as a wxy at the 50% retracement level. However, the initial degree wxy may represent a larger degree wave W. In any event, this would still imply a rally back to 50% retracement in a larger degree wave X. The 50% retracement target would be approximate 3.85.http://books.google.com/books?id=0fA-ItDgSQkC&lpg=PP1&dq=elliott%20wave%20principle%20key%20to%20market%20behavior&pg=PA124#v=onepage&q&f=true

12/10/10 - EOD Update - SPX Target of 1300-1350 by 6/17/11? [Edited 12/12/10]

 [Edited 12/12/10- Added a Minor 4 Combo Corrective Option and a Long Term count below]

Did that get your attention? Not sure at the moment exactly where the market is heading but several of my charts below indicate that the market may intend to climb there. I'm not saying this is what I want and hope for (but of course I would welcome it if it happens) but just saying this is how I interpret the charts.

Though this rally may be long in the tooth, I'd say the larger trend remains bullish.

I am dumping these charts for you to decipher and will come back and address each one later if they don't make sense on their own.

I want to say that minute [i] of Minor 5 is nearing an end but there are still several options on the table. One such option is the Minor 4 Flat or combo corrective that I would say is the best alternate (from a slightly bearish perspective) at the moment.

SPX - Preferred [Edited 9:30 PM]

3 Min [Edited 9:30 PM]

This count implies that the market is still working on subminuette iii of minuette (v) of minute [i] of Minor 5. A Fib extension of subminuette iii to subminuette i looks to target 1245ish.

Weekly Bollinger Bands

Bull Channel

Cup and Handle

Minor 5 = Minor 1 at 1292.

Fib Fans

If the market shot straight up to the next fib fan above (62.8%), it would target approximately 1292. 

Reverse Fibonacci / Fib Confluences

The next Fib confluence targets approx 1290. The confluence is not as tight as 1232 but I believe it shouldn't be ignore when considering other factors pointing to this level. 

RUT

TZA

Minor 4 Flat Alternate Option

This option is still possible here as an expanded flat. If this option were to play out, the red Fib extensions would be the logical targets for minute [c].

Minor 4 Combo Corrective Option

Minor 2 took one month to complete. Minor 4 would take two months to complete and tag the lower channel if a flat/triangle combo formed. If this option were to play out, I believe 1200 would be the support level for the triangle.

Even this long term count supporting EWI's bearish count, implies that 1350 may be the intended target. You may have seen this chart a few times now as well.

10/16/10 -Grand Supercycle 4 Combination Corrective

****The long term count below assumes that EWI's count for Grand Supercycle 3 is correct****

While posting the combination corrective count at EOD yesterday (stay tuned. I may have to make some adjustments to that count), it got me thinking yet again about the long term (20+ years) count.

I start out with EWI's version of the flat corrective structure. Please refer to the Elliott Wave International Educational website for the basic tenets.





Elliott Wave Principle, 10th Ed., page 46, "A flat correction usually retraces less of the preceding impulse wave than does a zigzag. It tends to occur when the larger trend is strong, so it virtually always precedes or follows an extension. "

I have posted a version of the chart below previously. I still believe we have completed a textbook flat that began after the 2000 dot com bubble busted. This makes sense since Grand Supercycle (GS) 3 lasted 70 years. That's a pretty strong trend so it makes sense that we correct with a flat.

So playing off the combination corrective theme, this is one way I am interpreting our current progress on GS4.

EWI expects GS4 to correct down to the previous wave 4 of GS3 which is approximately 400. However, I propose that what is not corrected in price, will be made up in time.





****Below assumes EWI's count is incorrect****

The alternate count is that we are still in Supercycle wave 5. The flat, which completed in 2009, marked the end of Cycle 4 of Supercycle 5. If this is correct, then we are in a new bull market with Cycle wave 5 hitting a new high above 1576 to complete GS3.

10/2/10 - Long Term and Hope Rally Count

SPX - LONG TERM

SPX - DAILY HOPE RALLY

The top chart is a 20 year view of the SPX. Sometimes I wonder if it is worth examining the wave count this far out. It's just not too practical because the count can change and who wants to wait 10-15 years to find out a count was incorrect?

Anyway, the long term chart above can be interpreted in two ways.

1. If you believe in the bearish Primary wave 3 is upon us camp, the hope rally has ended and we are on the cusp of a Minor wave 3 down to kick off a very bearish environment for stocks.

However, based on my chart above, one may interpret that the Primary wave 2 hope rally is still intact and has more room to run before the disastrous Primary wave 3. The count above implies that we are working on Intermediate (C) that targets 1350 where (C) =.618*(A) and retraces Primary 1 by 78.6%.

Though this would be considered a high retrace for a wave 2, it makes sense to me if folks who have enjoyed the bull market over the past 70 years may still be in denial.

2. If you are in the Cycle Wave C ended at the March 2009 lows as a Grand Super Cycle wave 4 camp (one I believe more than the P3 bear), then the bear market has ended and we are working on a Grand Super Cycle wave 5 bull market that will take us to new highs. I briefly posted this notion last week.

The bottom daily chart is a count that I propose if the hope rally is a 5 wave structure. Remember this 5 wave structure may be considered a Wave 1 or A at the next higher degree.

Kazoom kindly responded to last week's post as to why Cycle Wave C cannot be complete since Prechter believes the time element to the correction would be too short, 9 yrs for a 70 year rally.

My thesis would be that we could potential be in a combo corrective which began with a flat (Cycle Wave A-C). We are now in an X wave higher and then who knows what we get for the third set, perhaps a triangle?

What this would imply is that we move in a very large range over the next 10-15 years between 1500 and 800 on the SPX.

So you see, thinking longer term may not be too beneficial and those who demand a bearish Primary wave 3 could be setting themselves up for disappointment.

GRAND SUPERCYCLE 4 COMPLETE- A NEW BULL MARKET?

I have posted the top chart before and I have previously posted this count about a year ago or so.

So why can't the Mar 09 low be counted as the end of a Grand Supercycle wave 4? That structure since 2000 looks like a textbook flat. Cycle Wave C extends just beyond Cycle A and at a very acceptable Fib extension.

FLAT

This is a figure from Elliot Wave International on flats. Click here for an explanation.

Just something to think about.

9/18/10 - How Would R.N. ELLIOTT Count This?

Line chart

This is a follow up / continuation of a post back in July. See here.

I wanted to take a look again at the wave structure since the late 2007 decline up until the present day. Back in the day, I do not think R.N. Elliott was counting the "squiggles".  I believe he reviewed daily charts and higher and used closing prices. So there wasn't room to stare at trees. I'm sure he basically had to label what he saw at those degrees.

So without the benefit of the squiggles, what does the structure "look" like overall? Since 2007, we can count 5 waves down and since the 2009 bottom, it appears we have 5 waves up. Many will dispute this but really, just look at the structure. It "looks" like five waves. It's that basic.

The basic Elliott Wave corrective patterns are 5-3-5 and 3-3-5. So assuming the bounce off the 2009 bottom is a corrective retrace, we have only seen 5 waves up. Therefore what remains is the 3-5, which means 3 waves down and then 5 more waves up.

Based on my chart above, we are in the middle of that '3' now, which is represented by waves A and B. Wave B may not be complete yet and can easily retrace back to the start of A to form a flat. If so, B will complete near A, which is approximately 1010-1000. 

If it is not a flat, than B may complete a little lower say in the 900s.

Once B is put in, we should see the final 5 that represents wave C blue.

Now all the above assumes that this is a corrective wave off the 2009 bottom. I'm still no longer sold on a Primary wave 3 down. Until I see 1000 break (and I will only become slightly interested), this may also be counted as a new bullish impulse off the 2009 low.

So what am I trying to post here? The bottom line message I'm trying to convey is that since the structure can be counted as a "five" wave move off the 2009 low, we should anticipate some more upside to come after the correction off the Apr high is complete.

I point out again that we have had a weekly MACD centerline crossover, which favors one more push higher for at least a wave C.

For all the perma-bears out there, what are you going to do if this turns out to be a larger impulse up to complete a 5th wave at the Grand Super Cycle degree (yes, that is something I have pondered)?

Because, really, how do we know that the longer term counts are even correct? EWI, Neely and all those in blogosphere (myself included) can't find a consensus on a count over the past two years. Don't ya think there would then be room for errors in the count over the longer term? Just something to think about.

9/17/10 - 1140-1150 on target - EOD Update

EOD Update -  I say it is a triangle. The question now is did we see it's completion today (red converging lines) or did we only see the completion of a complex subwave c (magenta line)?

It's getting close either way. I am expecting a thrust out of this triangle most likely Monday. This triangle will be considered wrong if the market takes out subwave A (red).

10 min EOD

Daily Preferred EOD

This wave 4 (10 min chart above) once again matches really well with my daily preferred above. Based on this chart, once we thrust out of iv, minuette (i) is complete. The daily MACD histos are starting to turn lower and this matches up well with a turn down that may be coming for minuette (ii).

Daily Preferred

 Just a larger view of my daily preferred.

Option 4

I wanted to share this update of option 4 (I have a few). This one favors the bears. Notice C(blue)=A(blue) at 1153.

Overall, there are several bullish and bearish counts which indicate that we may head to 1140-1150. 

Almost forgot to update you all on this one as well.

SPX Long Term

10:40 AM Update - Looking like a legit triangle. I believe subwave D is in progress but there is room to interpret that it is complete. MACD is looking bullish here for a thrust out of the tri.

10:40 AM

9:14 AM Update - Ok. I lied. Here's a quick 10 min chart. Maybe in a wave 4 triangle.

9:14 AM

9:00 AM Update - Ok. Last update for a bit. The action continues sideways, which leads me to believe I may still have to move my [X] and [Y] labels. We'll see...

8:55 AM Update - A possible 1-2, 1-2 setup for wave v up.

8:50 AM Update - A possible truncated 5th. We'll see. A break of 1118.89 will confirm this.

8:15 AM

Though everyone, myself included, referred to another ascending triangle again yesterday, I believe the count is a little different as labeled above. Yesterday, prior to the close, I was looking for a micro [Y] to complete wave iv. See here at 9:05 AM.

I believe this is the correct count, especially because we didn't see a subwave e for the triangle. Either way, it really doesn't matter since it is a wave 4 nonetheless and we are looking for a final 5th wave up to complete this large impulse.

The 1140-1150 target still applies as posted here (see bottom chart)

SPX LONG TERM - An Alternate Option For P3 Followers [UPDATED- Line Chart]

SPX LONG TERM

Here's a count to ponder. This is the long term count for EWI up to the end of Primary 1. (I believe this is correct).

What I propose in this count is that Primary wave 2 may have room to run in a large zigzag. This would help explain the structure up from the March 2009 low as a 5 wave structure.

Call it what you will, it may not be an impulse but from the weekly long term view, it surely looks like a five wave structure.

Now look at the pullback  from that rally to date from Apr 2010 high. It nailed the 38% Fibonacci retracment in what I still believe is a corrective pullback.

So say we climb higher in an impulsive fashion to complete Intermediate wave (C) where would that take us? The yellow Fibonacci ratios on the chart represent the length of Intermediate (A). Using the typical wave relations of C to A, Intermediate (C) = .618*(A) at nearly 1350. Haven't we heard pundits and analysts mention this number?

Where are they getting that from. This level also falls pretty close to a 78.6% retracement of the 2007-2009 decline. Though this would be considered a pretty steep retracment for a wave 2, it is not a rule breaker.

Perhaps it makes sense in the government's final attempt to support the market and this is as far as the rally goes.

Keep in mind, this is but a mere option of several options out there. Some argue where I have labeled Primary 1 as only Primary A and this rally is Primary B before a final Primary wave C down.


So if your in the Primary 3 (down) camp, this is something to keep in mind.

SPX - LINE CHART

Td12 in the comments section reminded me of a technique that RN Elliott used quite often according to Prechter in EWP and that was reviewing closing prices to get a sense of the waves without all the noise.

I believe the line chart mimics the same technique. Here is the same chart as above using a line chart.

I would imagine back in the 30s-40s Elliott did not have a nice PC with really nice charting tools. I believe the charts were hand drawn and probably analyzed on a daily (maybe hourly?) basis and up.

So looking at the line chart above. The structure off the March 2009 lows can be roughly counted as 5 waves. This is also the case on the daily chart.

Check out Gooner70's blog from today's comments. Gooner has some interesting comparisons.