As a result, it's still a tough call on the short-to-mid term picture as to whether there'll be one last lunge above the October 27 highs or not. As stated above, I continue to favor the more bearish resolution -- but I do want to take a minute and warn my readers that, now more than ever, please trade safely. I say that because I've been nailing targets left and right, and that breeds a certain complacency about my targets and projections. I'm not a crystal ball, much as I often go on hot streaks where it may seem like I am... there's simply no perfect analytical system out there, so eventually the market will hit us with a curve ball, and I don't want everyone to get burned when it happens. Know your exit when you enter a trade, so if it goes against you, you live to fight another day. Okay, lecture over. :)
Before I get into the shorter term projections, I want to take a minute and update the Big Picture chart (this linked article also contains an introduction to Elliott Wave Theory). The chart below shows my long-term projections, which assume my larger count is correct. This has been my count since 2007, and it's the count I used to anticipate the 2009 bottom, as well as the 2011 top. In other words, it has tracked quite well for several years. Bear in mind that even if my count is perfect, the chart will need to be adjusted somewhat as we go along. Unless the market proves otherwise by violating the 2011 highs, this is ultimately what I believe is coming in the not-too-distant future.
We are now getting closer to the big wave (3) decline, if it hasn't started already. You can see the black "Alt: 2" annotation which shows how woefully anemic the bullish alternate count would be in the grand scheme of things... assuming my count is correct, of course. Obviously, I believe it is -- and I'm favoring this count by a 90% margin at this stage.
The next chart I'd like to share is the Nasdaq 100 (NDX) projection for the upcoming weeks. This projection assumes the bearish wave has indeed started. Obviously, if the bullish alternate count is unfolding, then this projection would be voided for the immediate future. The chart notes two warning signs that there may be more upside left. Note that the sketched-in squiggles are just rough guidelines, not projections. The actual projected target for blue wave (3) is 1920-1950.
The next chart presents a twist on the bullish alternate count, using the S&P 500 (SPX) for form. Keep in mind that we have hit the retracement target expectations of that count, and if it's unfolding, it could bottom at any time from these levels. Even under the terms of that count, I would expect at least a little more downside, to around 1200-1205. But there are no guarantees of that -- as I said, the wave structures are a little screwy right now; this is one reason I'm suggesting everyone take precautions.
The last chart is my best-guess of the short-term SPX wave structures, and it's annotated with three targets, which equates to four price reversals -- so it's a bold call, but this is what looks most likely at the moment. I'm expecting some upside to start the session today, and then a reversal off the 1215-1225 zone. If the SPX trades above 1227.25, then something else is going on and this chart would need to be adjusted, possibly dramatically -- so trade accordingly. The chart also notes that the market's at a good location for the bullish alternate count to bottom.
In conclusion, as you can see from the big picture chart, I'm quite bearish on the long term. Over the very short term, I believe the market will still make at least one more new low here, although I expect we may see a decent bounce soon. If the short term count shown above is correct, we could have quite a bit of volatility in the upcoming sessions -- so prepare for some whipsaws, and trade safe.
The original article, and many more, can be found at http://PretzelCharts.blogspot.com
Morning!
ReplyDeleteJust went short at 1215 (March ES). Looks like a possible ending diagonal in the futures, which could get sold more or less right off the open.
ReplyDeletePretzel - good morning - nice piece - as usual. I think you had mentioned a while back that tops were not things that just happen, they form and it is a lot easier to see them after the fact. If that is correct, the short term bullish move to 1293 that mostly everyone is looking for would seem to go against the prior observation. Am I thinking from position? Seems more plausible to me that everyone looking for the C wave, which means it has no prob of happening.
ReplyDeleteI agree, which is another reason I'm favoring the bearish count. The 1292 top had everyone still looking up, and this top has it too. It's almost a prerequisite that bears get shut out at the top so the decline can be sustainable for awhile (i.e.- no support from short covering).
ReplyDeleteMorning, PL.
ReplyDeleteI see ES is rallying as is Euro, and my PCLN Dec puts are very close to expiring out of the money if I don't cover, so....what to do? Hmmm.
BTW, nice piece as always.
ReplyDeletehow's PCLN trading pre-market?
ReplyDeleteThe thing is, it could rally back up to about 455 before declining again. Having one day isn't a great situation. :(
ReplyDeleteI know. I'll put a tight stop on it.
ReplyDeletePL Great analysis. I know that Elliott Wave doesn't trade on news but given the weakness in Europe and China where would a bull find the courage to go long in this environment? Even the US firms are back peddling their earnings projections for the 1st quarter. Just curious on how you consider outside influences on your Elliott Wave analysis.
ReplyDeleteNice work as always. The long-term projection is very helpful, especially for my macro long-term positions.
ReplyDeleteBack to the short-term, you've been nailing your targets perfectly. S&P futures hit 1205 earlier and now at 1225. How much of a probability would you place on the scenario where S&P trades above 1227?
Well, futures need to reverse pretty much immediately here... so we'll know soon enough. :)
ReplyDeleteThe market is really driven by only one thing: liquidity. If there's a lot of liquidity sloshing around, it finds its way into stocks, and they go up. If liquidity is scarce, they go down. The crisis in Europe is sending money flooding into the US banking system, and some of that money has been finding its way into stocks, which could fuel another small rally.
ReplyDeleteThe stock market really has very little to do with fundamentals/news -- outside of black swan events.
A quick shout-out to Charles S. for his donation!
ReplyDeleteMany thanks, Charles, for supporting this community! :)
ES is at 1220? what is your stop loss level?
ReplyDeletePL Looking at your last chart with a rebound target range of 1215 - 1225, will the futures market of 1226 this morning possible finish off the iv and then we head down again?
ReplyDeleteA couple points up from here. Awfully close right now.
ReplyDeleteIt's possible. It's a pretty safe short from these levels, 'cause you'd place your stop at 1227.26 if you're being conservative. High potential reward/low risk of capital. Those are the trades I like. :)
ReplyDeleteThis is the best allaround post I have read from you in 6 weeks. It covers everything that is pertinent, succintly, directly, and at a difficult juncture area. And because you finally recommitted above to being a 90% bear shortterm, despite the difficult crossroad over next 2 days, I will mention what I see, from both your charts and MY own knowledge.
ReplyDeletePersonally, as all here well know, I remain a rockhard permabear, 100%, with zero doubt whatsoever, that the entire world is head to deflationary depression, worse than the 1930's; and that the worse place that will be hit, is the usa, since as the boxing saying goes, the bigger you are, the harder you fall.
All that said, it is hard to argue with what BOTH the RSI and MACD are saying, in your shortterm bullcase chart: VERY oversold. Obviously, I hate that, not what I want to see, but it is what they BOTH say. Ergo, what this SHORTterm chart is saying, is that there SHOULD be 'some' bull bounce very soon, for at least a few days, to eliminate this very oversold reading.
However---on the other side of the current equation, looking at your LONGterm chart master chart, NEITHER the RSI nor the MACD show oversold readings; as a matter of fact, they are both right in the MIDDLE of their respective parallel bands, therefore, bottomline: there is STILL the POTENTIAL of a LARGE bear one-day crash (as I have been calling for, any day now, over 1000dji), yet, there must first be a VERY shortterm up move INTRAday today, in order to at least bring the shortterm RSI and MACD back to the center parallel line.
BTW, I read a highly relevant dollar article today, and because I know you follow the dollar closely, as a contrarian indicator to the spx, and I read somewhere today from some dollar tech analyst, that the dollar big move up yesterday has pushed into the region of 80, from where a MASSIVE dollar short-covering rally could be trigerred, ANY TIME NOW, because of the dollar carry-trade, which has been borrowing HUGE sums of dollars at near zero interest, and investing it elsewhere (in various vehicles) earning several % points of interest, but with the dollar breaking above the 79 area resistance, it could trigger a huge shortcovering, and this----would coincide perfectly in synch, IMO, with a huge drop in the spx, in only one day. Your thoughts on the potential of this massive dollar short-covering, and it's correlation to the spx.
The dollar rally is unfolding exactly as I projected back in October, in this article (nailed the bottom)
ReplyDeletehttp://pretzelcharts.blogspot.com/2011/10/us-dollar-update-zero-hour-approaches.html
I believe it's headed to 85 or so next.
Theoretically, this should lead to lower SPX prices -- problem is these correlary relationships are unstable and unreliable, and they can de-couple at random -- so it doesn't promise anything. But odds favor it leading to lower SPX prices, whether it's a one-day drop or not. Big dollar rally would probably trigger some algos that would sell stocks, though, so who knows. These things can feed off each other, with the robots running the show these days.
did ES hit 1225? my screen says the top so far is only 1220
ReplyDeleteDepends on if you're looking at December or March.
ReplyDeletehmm... i remember you saying that your price targets are for cash markets, so i guess we don't really have to bother about ES Dec or Mar discrepancies?
ReplyDeleteRight, targets are cash. But basically, with futures, the closer they are to the actual date, the closer they trade in concert with the cash market. So December futures should be almost identical to cash, whereas March will trade at a discount.
ReplyDeleteIf anyone read the posts last night and cares, I had my buy limit at 1197.25 on the march contract and we only tagged 1198.00 from what I see, so no fill. So close.
ReplyDeleteAloha, Pretz. Thanks for this morning's great overview and commentary. A quick anecdote: I tried shorting some QQQ into this morning's bounce, and my broker (Fidelity) had no shares available to short. That strikes me as unusual, and as a warning that betting-against-tech is a crowded trade. Be careful out there.
ReplyDeleteyes, unusual...maybe something specific about your broker, there are always shares out there to short.
ReplyDeletebuy the sqqq or qid, tech inverses (leveraged)
My broker's Fidelity, a "small time operation" (LOL). I wound up adding to my SPY short instead.
ReplyDeleteI'm tempted again to buy vxx(vix)...somebody talk me down!
ReplyDeletethis is one pathetic rally if you ask me
ReplyDeleteDont' do it!! Wait until VIX < 20.
ReplyDeleteMan, pushing the envelope there. I usually try to err on the side of being too conservative, 'cause I've had too many of those "going for that one extra point" cost me 20 points.
ReplyDeleteI'm in the green again this morning but the market is up 100 on the dow.
ReplyDeletebidu, pcln, lulu, wynn, most of the materials are all lagging. is there anything up other than banks?
PCLN dropping like a rock off the open. Hoping you didn't get chased out right away, Juan.
ReplyDeleteDEC Philly FED 10.3 vs NOV 3.6
ReplyDeletebig resistance at 1225 on spx - taking short here - Dow kissing 200dma
ReplyDeletethose who like scalping gap plays, BPAX is trading between a good range of 0.46 and 0.53. of course, once i finish this, it is going to whipsaw down to 0.4 and clear those stops...
ReplyDeleteWow, with the 'good' US economic news, anyone else feel we are going down because the masses finally realize QE3 all but out the window now?
ReplyDeleteA quick shout-out to Ray Y. for the donation: thanks, Ray! :)
ReplyDeleteYup, would have been nice though, and I did have a pretty tight stop. Surprised we got up to 1225 so quick, would have been great to flip that. Will start paring back into shorts now.
ReplyDeleteHi Pl, any great time to short PCLN now?
ReplyDeletePL,
ReplyDeleteThank you for your beautiful analysis and hard work.
PCLN's a short and hold, IMO. It just broke the neckline of a big head and shoulders formation, which projects down to about 350. Just whipsawed the neckline - probably a stop run. If it were my trade, I'd short it right now w/ stops above 467. I realize that's a bit of upside risk, but anything lower is subject to whipsaws at this entry.
ReplyDeleteAnd I just think it's one fugly chart.
NOT TRADING ADVICE. :)
yeah, fidelity is small beans :)
ReplyDeleteI was merely wondering if they would only borrow shares within their own holding universe and not from other brokerages...I'm not an expert, it was speculation.
Thank you, and yep "no trading advice" :-)
ReplyDeletelol, already down 3 points since this post.
ReplyDeletePL ... With reference to your article today, w.r.t. the first chart ($SPX), you said the "Alt: 2" annotation shows the bullish alternative being "woefully anemic". Could you briefly explain where Alt: 1 would be? I don't understand the bullish structure.
ReplyDeleteI think now they borrow only from their own holdings. (Not sure whether "their own holdings" includes just their retail brokerage accounts or the entire Fidelity universe.) Until maybe two years ago, they'd borrow from other brokerages, and orders would wind up in "pending open" status until shares were located to short, which could take a while. More than once, I wound up getting a fill at a price quite different from that quoted at the time I placed the order. That's okay for "investment shorts" but not for trading.
ReplyDeleteHi PL, very interesting and I add that for SPX I have no changes in the negative Trends, ne reversals. There are some slow downs in the NDX, but after e few days the trends become still negative. NDX and DJI are still stong but if you go before the marked crash 1981/1982 you can see SPX decreasing while DJI was declining. DJI keeps the cream
ReplyDeleteno luck. I'm trying to get back in, but my broker sucks...I have to do it over the phone
ReplyDeleteIt would be the bullish alternate count with the peak of blue (2) being at the black alt: (2) label. Blue (1) stays the same.
ReplyDeleteIn other words, if we got that rally up over 1300, that would be the black alt (2).
ReplyDeleteThanks, Paolo. I love your turns of phrase. Where are you from?
ReplyDeleteMan... damn. We were looking for that SPX reversal off the open, no surprise for PCLN to follow (or lead, in this case).
ReplyDeleteYes, I understood that. I just don't know at what date and what price the Alt: (1) would be so that the Alt: (2) position on the chart would make sense. Where is Alt: (1)?
ReplyDeleteJust a heads-up for those short SPY ... it goes ex-dividend tomorrow. I wasn't able to locate the exact amount, but the past two quarters' dividends were about $0.62. Unless you want to "pay the dividend" on a position held short, which you don't, consider not holding SPY short overnight.
ReplyDeleteI've been cleaning house with bidu in the past week....it's making a b-line straight for the october lows
ReplyDeleteamzn still looks like a good short here, small bounce off the 52wk low yesterday, but I doubt that holds considering it is selling at 100x earnings.
Pretzel - i'd really like your thoughts on amzn if you can find the time....think that pig will cut in half?
btw, i've been short pcln since 475, thanks man!
Not short SPY but excellent advice. Thanks for alerting everyone.
ReplyDeleteGood morning all...checking in.
ReplyDeleteI'm Italian and I have worked several years in US multinational companies. My instread daughter is a consultant at Accenture Italy and of course we are proud of her
ReplyDeleteI know. I'm back in with a small position for Jan 21 440 put. I should have just stuck with it, but, oh well.
ReplyDeleteThere is no decoupling, all are daisy-chained.
ReplyDeleteSame as I stated 2 days ago, BEFORE gold dropped like a knife through butter once it even slightly broke Long term resistance, I said the spx would follow, and bingo, a 1-day island reversal on the spx, which you have not have not even mentioned, as of significance. I see you have used many of MY stated-herien ideas, over the last few days. No problema---as long as you continue to grow some balls, to continue 90% shortterm bear. Good work today, I am finally toughing you up, maui kid. GoTod work on the dollar chart, I saw it. There will be a pop up there real soon, and from the deleveraging of the dollar carry-trade: NO MORE complacency, about the dollar, being everybody's bitch, because of that stinkin liar punk, babyface bernanke jackass.
Lol, there is no alt (1). It stays in the same place, but if wave (2) extends, then wave (2)'s top moves.
ReplyDeleteroll call.....bueller, bueller
ReplyDeleteMorning, Fred.
ReplyDeleteYw. :)
ReplyDeleteRemind me this weekend and I'll try to look at AMZN.
I guess the only logical Alt: (1) would be where you have the big red B, bullish wave 1 being 2010 September to 2011 May.
ReplyDeleteYep, if it wasn't for you, I'd still be waiting tables at Bennigan's or working at McDonald's or delivering pizza for Domino's -- or whatever it was I was doing before you strolled onto my website a few weeks ago. ;)
ReplyDeletebtw, I don't mention island reversals most of the time because they're actually fairly unreliable patterns. For example, you can see a perfect island reversal bottom on the NDX chart in the article above. In fact, it even sports a rare "channel gap" which I've annotated with a blue channel. It's already negated the pattern. Occasionally, I do mention island reversals, but mainly because folks think they're cool. :)
lol -- There's something you don't get about EWT. :D
ReplyDeleteThere is no alt (1). The blue (1) is still the first wave under either count. Blue (2) is the retracement rally to that blue (1). If we got another wave up here (see bullish alternate count -- today illustrated w/ the triangle) then the top of that rally would become blue (2) (in other words, where the black "alt: (2)" annotation is). (1) doesn't change under either scenario. :)
Pretzel, would really appreciate it if you could look at ^RUT too. i am guessing it should track SPX closely, but just in case.
ReplyDeleteSerious question: Did anyone else have trouble understanding the black "Alt: (2)" annotation? Do I need to explain that stuff better in the article?
ReplyDeleteI read it to mean that the black Alt: (2) target would replace the blue (2) IF the bullish alt count is in play.
ReplyDeleteYes, correct. You win a pound and a half of galvanized steel nails AND the Brunswick pool table!
ReplyDeleteCVI looks like it wants to take a dive. AZO is levitating.
ReplyDeleteYeah me too, but I see how it could have been misinterpreted. I single line like Michael Roberts wrote here would help clarify, though you kind of did hint at it within the article.
ReplyDeleteMinyanville loves to change my article titles. Today, they changed my article to this:
ReplyDeleteSPX and NDX Update: Targets Hit Again, Signal Long-Term Projections
This kind of bugs me sometimes, because it's not what I'm trying to say. The targets being hit yesterday doesn't signal the long-term projections. Oh well. :/
It would good to show the hyothetical lines from here into future for Alt2/balck as you have shown it for preferred count
ReplyDeleteYeah, RUT looks exactly like SPX right now -- same waveforms.
ReplyDeleteOkay, just covered my shorts at 1213.
ReplyDeleteDon't like this pattern now, looks like it wants to retest the highs or go higher. I'll take my 2 points and wait it out.
ReplyDeleteSorry, cash price would be 1217
ReplyDeleteI believe I understand the meaning now. Both (2) and Alt(2) are retracements of (1) in the big bearish picture. With Alt(2) the retracement wave is deeper and has short term bullish price move from where we are at present. That was what you meant by "bullish".
ReplyDeleteI misinterpreted your Alt(2) to mean a downward retracement of an upward impulse wave 1 in a big picture bullish count. Clearly, the label Alt(2) isn't situated at a price bottom - hence my total confusion.
Best guess is it's targeting 1225-1230 SPX.
ReplyDeleteWill re-short if it can't hold 1217. Basically get back in at even money.
ReplyDeleteCovered at 1213.50. Netted 5.5 over several trades. Really hard to tell where this uptrend is going.
ReplyDeleteGood morning Pretzel, based on the price action so far, which scenario of the three do you favor at this moment? Thanks
ReplyDeleteMorning decline looks like an ABC now. Only bearish option is it's a 1-2, 1-2 series -- that bearish option can be ruled out above 1221.34. Above that level, and 1225 should be a given -- though possibly much higher. Morning move looked like an impulse, so best hope for bears would be another impulse to 1225-1230 to complete an ABC up. Worst hope would be that it's the start of something more bullish.
ReplyDeleteHi Frank -- only two scenarios. NDX and SPX are the same bearish scenario.
ReplyDeleteNothing's happened today as far as determining if the bullish alt. count is in play. In fact, from a technical standpoint, NOTHING has happened today. :)
I've seen that before, what wasn't apparent was whether you titled it differently for Mville.
ReplyDeleteSPX is just a "zoomed in" attempt at breaking down the bear case. But it's not the only interpretation of the wave structure that favors the bears.
ReplyDeleteMost of the time, it's them. Very occasionally I change it -- like the "WHAT? No NDX Chart???" article. That was kind of a private joke between us -- Minyanville would have been like, "WTF?"
ReplyDeleteGot into PCLN at 441, and now it seems to be reversing! urghhhh
ReplyDeleteQuick one Pl, what should my stop be? Thanks for the non trading advice man ;)
needs to retest that 50dma imho... also, pundits seem to be getting bullish all of the sudden...
ReplyDeleteFwiw, I'm waiting on any ES trades. Have a few orders above today's highs to refill my tna short/long tza hoard, and sell those silly qqq calls from yesterday, but mostly small potatoes.
ReplyDeleteAgree
ReplyDeletelol- back in short again at 1213... might be one of those days...
ReplyDelete1217 SPX, 1213 ES
ReplyDeleteMan, you got slow entries! It was 447 when we talked about it last. I also listed the stop in that reply. Sheesh, you should read that stuff before pulling the trigger.
ReplyDeleteI hope this break of uptrend support will have similar results as the first leg down this morning.
ReplyDeletePretzel, is there any reason why a-b-c couldn't have been played out already, with c topping at 1220 at 11:25AM Eastern Time?
ReplyDeleteIt literally would be the same, it would just start from a little higher up.
ReplyDeletePL, What to make of the NDX? It's trending down while SPX is trending up... What does NDX count look like?
ReplyDeleteLooks like NDX and SPX still running "flat".. sorry no pun intended :P
ReplyDeleteTriangle now on the SPX 1-minute chart. Should be good for about 7 points in either direction when it breaks.
ReplyDeleteNo, there's not any reason it couldn't.
ReplyDeleteCrap, it has a lot of recent upward bias. Might be getting ready for 1219 again.
ReplyDeleteOne thing I like about NDX is it's in a slightly more bearish count than SPX in the big picture. I may go back to using it as my preferred short.
ReplyDeleteEven though S&P is still slow moving, blue chips like F, PEP, PG, etc. have been steadily inching upward. Maybe the break will be to the upside???
ReplyDeleteIf the triangle is a continuation "b" wave, SPX might retest 1210, then run back up to 1225 again to form a large flat for wave 4 -- then it would head down toward 1200 on Monday, I presume. Too early to say -- all gonna depend on which way that triangle breaks.
ReplyDeleteI'll cover again at 1220 cash. Would go long for a quick scalp, but I'm too tired.
ReplyDeleteStopped. I think I'll call it a day here soon. Down a point on the day. I hate OpEx days.
ReplyDeleteEntered a scalp at 1213.00. TIGHT stops and trailing.
ReplyDeleteThat was quick. Got booted at 1215. :) Oh well 2 pts is 2 pts.
ReplyDeletePL,
ReplyDeleteGet some rest and thanks for all the hard work!!! Hopefully, you won't be hearing 80's sitcom music in your dreams..LOL
Yup. With bullish data some people may be trying to move this closer to the 1240 'max pain' area, and away from 1200 where the big guys probably sold a lot of puts. Wouldn't be surprised to see more upside today and tomorrow. Actually, I'm hoping for better short entry points.
ReplyDeleteThat it is. :)
ReplyDeletelol- of course, you pretty much just guaranteed that I *will*. :o
ReplyDeleteshort video :Nigel Farage: On the Titanic towards Economic and Democratic Disahttp://www.youtube.com/watch?v=bOgtEBhV4DEster
ReplyDeleteIntetresting to watch-enjoy...We have one country and only two lousy parties, and one president and can't agree on anything...anyone who thinks EU is going to get an agreement that solves anything is delusional!
Hi Pretzel,2
ReplyDeleteI have been reading your postings in MV and here and found EW fascinating. As a beginner, I wonder how EV takes into account of the macro pictures, such as QE's from all over the world - may be Q1/Q2 next year?
RockyTop - since you were short a lot of momo names, any chance you were short DECK today? I suppose you probably would have told us about that. :)
ReplyDeleteI am actually looking for a bounce in it after this sell-off, possibly only until opex tomorrow, but think it'll climb above $87.50 to screw the put holders there. It should at least stay above $85. Anybody follow this stock?
http://feedproxy.google.com/~r/zerohedge/feed/~3/7N2LO8phMYE/presenting-kyle-bass-analysis-shortening-collateral-chains-or-gradual-evisceration-shadow-banki
ReplyDeleteKyle Bass letter below
ReplyDeleteAnother hollow red candlestick on the VIX shaping up for today. Not quite piercing the BB's.
ReplyDeleteAnyone else see a cup and handle on the 5 min PCLN chart?
ReplyDeleteTomorrow may be we will see fireworks. There are 3 days that big investors are selling puts and tomorrow they will cash the call that of course they will renew. And that's it the trick +1,5%, that has already happened not sure it will happens again tomorrow
ReplyDeleteI've had DECK on my watch list and have even traded it in the past. I don't care for the bid/ask spread on that one, so I'm getting close to taking off my list. It bounced $2 off its low, not sure how much more upside it has left in it.
ReplyDeleteI had the same idea and opened a long position, for tomorrow on something else.
Thanks. Bought in the low $85s, have an order to trade out of it if we break $87 - else will probably trade out of it tomorrow no matter what. Another analyst came out and reaffirmed 'buy' PT: $120, but that didn't move the price.
ReplyDeleteThat handle on PCLN turned into the tail of a rising wedge. Just broke down
ReplyDeleteInteresting to see similitude between 5-minute and 60-minute charts. Not quite a fractal but interesting anyway. The dome in both suggests, by recursion, of more downside tomorrow. The dome "cannot" be broken because it's impossible for the 60-minute chart to jump up 50 S&P points.
ReplyDeleteno, i wasn't short deck, 3.3b market cap...it's cheap enough that someone could buy it and I'm screwed before I know it. I won't take shorts on a potential takeout target....besides, everybody wants UGGs right?
ReplyDeleteI considered shorting GMCR 3 days ago and passed (oops)
I do have LULU and FoSL, lulu is doubtfully a takeout target but fosl maybe at 5.1b market cap. Not sure how long I'll be in fosl though, it was maninly on expecting a monster crash in retail, mabe I should just short XRT?
couple typos there...when I go past 4 lines of text, DISQUS hides my typing, so I'm typing blind at that point!
ReplyDelete......and I'm out. Got about $1.50/share off it.
ReplyDeleteLugnut, on PCLN, you mean lower lows? It has been trading in the 447-448 range for some time now.
ReplyDeletelol, no worries. I already bailed on it (way too early apparently). Had a sell limit and someone came in and spiked it from $86.50 to $87.30 in a blink of the eye (now at $87.80).
ReplyDeleteTBONE at Daneric's site does EW counts on the RTH and he is expecting more downside ST and LT I believe.
glad i didn't trade today.... look like nothing happened- still short from last night sds
ReplyDeleteThe Telegraph link below is worth looking at....China is in a much worse conditiont than you would surmise from the calm of SPX..the big wave down is coming!
ReplyDeletehttp://www.telegraph.co.uk/finance/china-business/8957289/Chinas-epic-hangover-begins.html
just added a CMG short, took the FOSL off.
ReplyDeletefigure CMG is good for a test of 300 at the least.
Just going to throw this out there and hope to get feedback from EW techs on this count on the 1-minute chart. Looks similar to other fractals I've seen like this. A 5-wave push up would indicate a c wave has begun with the 3rd wave imminent, but I have probably violated several EW rules I've no doubt.
ReplyDeletedicay - I was looking at PCLN intraday on the 5 minute chart. It had set up a cup and handle at 449. See the price at 10:00, 12:30 and 14:20. The RSI was weaker at 14:20 than at 12:30 so I held my short position. Had it paid for the bulls it would have been about a $10 move.
ReplyDeleteInverted hammer after a down trend, similar to 11/25?
ReplyDeleteFutures +4.5 since 4pm EST.
ReplyDeleteFutures are ALWAYS up BOB - ALWAYS
ReplyDeletelol. frustrating isn't it?.
ReplyDeleteput to call ratio was high today as well. gold recovering after hours. just sayin' there some signs tomorrow could be an up day, that is all.
Not responding as an EW tech. It's now how I trade (for now at least). Potus seems to know EW, maybe he can speak to that. I will say that I took a swing at counting waves myself and as best as I can tell we're still in 4th wave correction, probably of the more complex variety.
ReplyDeleteSo if my counting is anywhere near close, we should resume the downward movement after the correction completes but today's converging triangle only muddied the picture for me.
Days like these I don't envy Pretzel's task of trying to make a call on direction. I took a long position after the bounce today in the same thing I closed my short this AM. The long is still profitable at close.
I expect that seasonality will prevent any more gapping down this week, I would also expect for OPex prevent a strong bearish move. FWIW my spidey senses tell me that tomorrow won't do much to clarify either the bullish or bearish counts.
Many thanks to Arnie for his *2nd* donation!
ReplyDeleteAnd Arnie, re: your note -- I had no doubt you'd be as good as your word. :)
already hit that 1221.75 level after hours corresponding to that first red line. might try going long ES at the backtest of that line @ 1218.50 with a tight stop in case it goes horribly wrong and S&P downgrades the universe 8 notches overnight.
ReplyDeleteHey, Bob, re: the chart...
ReplyDelete2nd waves are almost *never* triangles. Very very rare. A more likely count would be to replace 1 with A, leave the little a where it is, place a B at the top of the triangle on the right side, a little upside tomorrow, then a reversal down in c of the larger B (to match the A at the 1 label), then another reversal back up to 1225 in C of iv.
Haven't studied any charts yet, so it may be something else entirely -- but if we're going to call it a triangle (for the sake of argument), then that's more likely.
Hi Albert, regarding your question:
ReplyDelete"I have been reading your postings in MV and here and found EW fascinating. As a beginner, I wonder how EV takes into account of the macro pictures, such as QE's from all over the world - may be Q1/Q2 next year?"
The idea behind Elliott Wave, and any technical analysis really, is that the price chart contains a composite of all the collective "knowledge" of a stock or market. Therefore, pending QE's should show up in the price chart at some point. QE1 sure showed up in the chart ahead of time -- and QE2 did as well, though it was more subtle, and the market was in a very different place in 2010.
Yoh PL! you are welcome dude! well deserved! Please see my attached pic, appropriately called: channel surfing. What do you think? Seems like no real break-out either way yet, except for possibly from the yellow triangle.
ReplyDeletesorry, that yellow triangle was very hard to see. So made it orange instead and I cleaned-up the trend channels (cause you got such a high standard of graphics); sorry for the Google finance graph; I am just being lazy ;-)
ReplyDeleteYep, nice chart. Funny how bullish some folks are getting, considering all the market has done today is consolidate its losses below support... not bullish so far.
ReplyDeleteGreen, days like these, I don't envy my task either. :D
ReplyDeleteBut my current read is that we're still in a corrective wave, so right now I would tend to agree with you that tomorrow won't be terribly helpful. Haven't studied any charts yet, though -- so maybe I'll find something revealing later.
exactly. everybody's like: "I want that gap from the open filled", "close below 1210 or the bears are toast", etc, etc. IMHO this was a nice consolidation day before further selling; kinda like Nov 18. Happens always somewhere mid-trend; either down or up. I know today was a bullish reversed hammer, but going back in time the S&P hardly has had one in months, if not years, so I wouldn't count too much on it; especially since all other TI's are still in "sell" mode and since it's a weak to moderate reversal indicator. 1227 was denied hard IMHO and all the bears had to do was keep it below 1220, which is what they did.
ReplyDeleteGotcha. Thanks for looking it over. It kind of looks like the dollar chart this year where we declined to May, then had this triangle pattern, then rocketed up starting late Sept. Similar fractals. I thought that was a 1, then triangle 2, then 3 up, but I guess the 'proper' count is different. Still trying to learn this EW language.
ReplyDeleteCan you post your really long count? I'm having a hard time orienting myself to your analysis without your 100 year analysis. Thanks much.
ReplyDeleteCool, cause I started that count blindly and then checked it against your chart. I'll be interested if your next update still shows SPX in correction wave.
ReplyDeleteAnd edit above, that should have said "not" instead of now. I'm still some time away from trading based on EW.
Agreed, but the inverted hammer is a weak bullish signal and needs confirmation the next day (and of TIs). However, most TIs, like the daily MACD are indicating a sell signal... Also a hammer has preferably a gap down, instead we had a gap up today. The reason why it's weak is because the buyers got exhausted quickly and were taken over by sellers later during the day (hence the long upper shadow).
ReplyDeleteTo show you how "wrong" candlestick patterns can be (especially in confirmed trends), please look at august 3 of this year. It's as clear as a hammer can be. As you know; it is a bullish reversal pattern that forms after a decline. BUT, look at the days following; sell off actually accelerated...
There are some pages for PL's 'big picture' counts on the top right of the page. Here's a link to the S&P long term count you've requested:
ReplyDeletehttp://pretzelcharts.blogspot.com/p/big-picture-long-term-elliott-wave.html
I just can't get over the fact that everywhere I look, every blogger, every person in the forums/comment boxes, everyone on cnbc is expecting a rally. Are you telling me none of those people is positioned for that rally?...It's not going to happen, not until after christmas in light volume and it will be from lower levels than we're at now. I could be totally wrong here but sentiment is telling me santa is dead until christmas day.
ReplyDeleteI concur with the points you mentioned, just pointing that out for shorts to be alert.
ReplyDeleteI remember that candlestick well actually. If you draw a trend line from there through the Aug/Sept tops and a parallel one through the Aug 8th bottom and Oct 4 bottom you get a kind of bull flag trading range which portended the strong October rally we had.
+7.5 now. Doesn't look like its pulling back at all. If this is an a-b-c 4th as PL is suggesting, then I guess I'll be looking to short above 1230.
ReplyDeletePretzel, if you have time, mind taking a look at Hang Seng Index? I always thought it is better than the Shanghai Composite in revealing clues about the health of global economy
ReplyDeleteGreece nas to pay 2billion tomorrow.....should be interesting to see if they pay or if they go into a grace period. They have1 .2billion due on Monday as well. IF they don't pay....say hello to wave 3. Rumor had it that the creditors had formed a committee and were hiring Blackstone to advise.
ReplyDeletepotus, do you know what time they're suppose to pay/report this?
ReplyDeleteAsia's up, except for China, new 2.5 years lows (again).
ReplyDeleteFutures still up handily. Short the pop tomorrow - S&P sovereign downgrades coming after the closing bell.
Weeeeelllll now, that was fun.
ReplyDeleteJust had a little system crash there... only took a couple hours to get back up and running. :/
crap, had a fat finger trigger on HSI puts. Pretzel, will need you help on your very short term view on HSI. looks like a triangle or HnS to my very limited technical knowledge eye...
ReplyDeleteTy for answering this Bob.
ReplyDeleteHi, Scott: My super-long-term charts are basically hand drawn -- but if it helps you orient a bit, 1929 was Supercycle II under my preferred count. In other words, the current crash/depression is on par with the Great Depression. This is opposed to, say, Prechter, who believes the current crash is a degree higher than the Great Depression. His LT count would be similar to my first alternate count.
I base my current count on many things, but among them is R.N. Elliott's "rule of alteration" between second and fourth waves. The second wave was a "sharp" correction (essentially straight down) -- the current wave appears to be a flat (down, up, back down).
Lemme look in a few...
ReplyDeleteI hate system crashes. I Apple'ed up a few years ago and life is good...
ReplyDeletethanks. already bleeding on it, will take my losses and close out now if it doesn't look good ST
ReplyDeleteHSI is likely to go for a lower minimum as the Coppock Curve is in a negative territory and the Primary plus the Long Term Trends are like fried eggs; no recovery is in sight
ReplyDeleteThanks Paolo, the only issue is i am holding puts that expire on 28th Dec 11. hate to be right about the direction and wrong on the timing
ReplyDeleteDid this chart just for you, TJ. :)
ReplyDeleteAssuming Stockcharts data is correct, it appears to be below triangle support right now. Usually, when a stock or index breaks a support level, it "returns to the scene of the crime" to backtest that level. If the old support line then stops the advance (i.e.- becomes resistance), then it's off to the races on the decline. If it doesn't hold as resistance, then ya gots yerself a whipsaw. More than 3% penetration of the line is considered a failure.
The blue lines are the "triangle."
The red horizontal lines are areas of long-term support/resistance.
The black lines are the "essense" of the down-trending channel.
wtf, where's the chart... lemme try it at the top.
ReplyDeleteAttempt #2
ReplyDeleteAssuming Stockcharts data is correct, it appears to be below triangle support right now. Usually, when a stock or index breaks a support level, it "returns to the scene of the crime" to backtest that level. If the old support line then stops the advance (i.e.- becomes resistance), then it's off to the races on the decline. If it doesn't hold as resistance, then ya gots yerself a whipsaw. More than 3% penetration of the line is considered a failure.
The blue lines are the "triangle."
The red horizontal lines are areas of long-term support/resistance.
The black lines are the "essense" of the down-trending channel.
I hate Disqus...
ReplyDeleteHurrah, it worked.
ReplyDeletebtw, the "measured move" of the triangle breakdown is about 4000 points. Should get to 17,600 at the minimum, though, assuming no whipsaw.
ReplyDeleteGreat, thanks! What is your quick read on possible SPX movements today? I guess whether HSI goes up or down from here depends on tonights action
ReplyDeleteI honestly haven't even looked yet. Got on for a little bit earlier and replied to a few folks, then my system went down and I just got it back up and did yer chart. :)
ReplyDeleteFirst glance would be ABC to about 1230ish... but I have to re-examine the larger structures in light of today's action, which I haven't done yet.
Sigh, if it is an ABC to 1230, then I should close out those puts. when it is so close to expiry, the decay is crazy
ReplyDeleteBy the way, really appreciate your help. too bad I can't afford to take this 50/50 gamble with expiry so close. would love to make a second donation from this profit
ReplyDeleteES could be very close to topping out here...
ReplyDeletehaha you are tempting me. for some reason though, after i closed out half my positions, HSI is dropping...i knew i always have excellent timing abilities
ReplyDeleteIf it's back-testing the triangle shown on my chart, that's where you ADD positions. You cover if it breaks above the resistance line. How long you have 'til expiry?
ReplyDelete12 days but if you take away the weekends and holidays, only 7. and my strike is 17600 :)
ReplyDeletethat was my initial intention, and i did add around theresistenace, but my fat finger hit an extra 0 to the amount i wanted to buy.
anyway, that's resolved now, took a hit on 70% of that position, but will keep 30% for a showdown next week
Ah, yes, the old fat finger. Fat finger has cost me several thousand dollars over the years. I'll never forget the time in '08 I thought I had entered a sell stop to short ES, and instead entered a buy stop. So I covered my existing contracts and went net long when I meant to *add* shorts. I didn't realize this until the market had dropped another 10 points. THAT sucked. Then there was the time on Party Poker that I mistakingly folded FOUR OF A KIND kings by hitting the wrong button, on an $800 pot. That sucked too.
ReplyDeleteouch. it's difficult to have good hands, but way more difficult to have the nuts and a big pot to come along with it. i must have played thousands of hours of poker, and while i have had str flushes five times, i never had a four of a kind
ReplyDeleteI don't like these charts at all. I think someone else should do tomorrow's update. Who wants to take a crack at it? :o
ReplyDelete"alternation" that is, lol.
ReplyDeleteHey Mav - we should know by the opening bell whether they paid the creditors in full or not. The rub is that they are trying to negotiate a haircut on existing debt (debt not held by ECB or IMF - which happens to be 60% of the total - but that's a different discussion). So the issue is - you are negotiating to pay existing creditors 50% on the dollar but you are obliged to pay creditors due today - 100 cents on the dollar - makes for interesting negotiations. It has not been disclosed whether the creditors holding the paper due today and Monday are the ECB/IMF or the "riff raff" public bondholders.
ReplyDeleteOkay, update's posted, so let's continue discussion on that thread.
ReplyDeleteYou are right there is a triangle and we are on the base
ReplyDeleteI like it when you explain this long term stuff. Guess it is the history buff in me.
ReplyDelete