Flipper Flattened
I tried to warn those poor dolphins back here:
“…the Vix is telling us that everybody has rushed to one side of the boat to look at the cute dolphins, and the boat is about to flip over crushing said dolphins under thousands of pounds of fat, blubbery tourist flesh.”
…but the glutenous bullish tourists were so obese that the poor fish never stood a chance. It was a hell of a splash though, was it not?
For the edification of those learning EW analysis, using the RSI pattern in wave analysis is not a “rule” of EW theory. It is blending classic TA with EWT. It is helpful, but it isn’t a rule.
IMHO, the downdraft as of the close on Friday does not label correctly as v of subwave 3. This is because if you take a gestalt look at the wave form down from 1148.58, what would be observed to be the iii portion is the shortest of i, iii, and v. That ANY wave 3 cannot be the shortest IS a rule. Wave 3s do not have to be the longest (although typically they are, except in commodities where w5 is often the longest) but they cannot be the shortest. So 1<33>5 is okay, but 3< 1 and 5 is not proper labeling, and something else is going on–like the wave isn't done unfolding yet, etc.
Matt,
ROFL! And, careful, careful… after that unfortunate dolphin incident, I suspect the dorsal fins now belong to sharks. Bear candles are the color of blood, are they not? Hmmm….
BTW, if you want to call the fall from grace on the SPX a completed 5 wave structure, that would be a legitimate possibility. That’s in part what I meant by “something else is going on.” In that case, the subwave iii starts at 1148.58 (same place), but it ends at 1105, so now iii is no longer the shortest wave. Also, in this scenario, the 3rd wave portion of one lesser degree is also the longest, running from ~1141 down to ~1115.
And, since I have the blog to myself, I shall continue:
The fall from grace has the form of a leading diagonal. These are different from ending diagonals in the underlying wave structure. Leading diagonals have a 5-3-5-3-5 count to the waves, whereas ending diagonals are 3-3-3-3-3. This potential LD can be counted as a 5-3-5-3-5 structure. Since it would be a falling diagonal, we would then expect a rebound upward. This is consistent with +5.25 in the futures (which has held for a few hours, but of course that can change).
Elliott Wave Priciple (Prechter’s book) states 1,2,i,ii,… is more common than LDs. You are supposed to be able to tell the difference by the action of w5 compared to w3. If w5 slows in price action compared to w3, it is more consistent with a LD. Personally, although I always look at that, I don’t always find it all that easy to tell the difference between the two based on that criterion on a 1 or 5 minute chart. Breadth decreasing in w5 compared to w3 is another hint that it’s a LD. Sometimes looking at price speed and breadth helps. Usually, I check where we are on the daily indicators, and wait to see if price jumps a trendline on the 1 or 5 minute chart (or whatever timeframe shows the possible LD).
Okay. Enough rambling. Hope that helped someone.
Oh yeah… leading diagonal, if it turns out to be one, has a very telling name… LEADING. This of course would mean it did the “leading” to the downside. In other words, more downside would be coming after a corrective abc up. This fits with the triple zz looking to have played out.
Whoops… looks like more computer problems for me. The last sentence of the first post should read: 1<33>5 is okay, but 3< 1 and 5 is not proper labeling. Some of the line obviously got deleted.
Whazzzup? It did it again!
1 less than 3 less than 5 is okay
1 greater than 3 greater than 5 is okay
3 less than both 1 and 5 is not okay
Matt, I think that shipwreck splashed saltwater on my computer!
http://lunar.cranf.net/index_en.html
junglegirl, the oracle counts the correction in 29/30 exactly like the move from the March lows… Well, all the EWlers have us now on the road to perdition.
Futures Prices
Market Last Change %
Crude Oil 74.75 +0.21 +0.28
Natural Gas 5.697 -0.053 -0.93
Corn 364.75 -7.25 -1.99
Soybeans 951.5 -2.5 -0.26
30yr Bond 118.4375 -0.40625 -0.34
10yr Note 117.90625 +0.09375 +0.08
NY Gold 1103.4 +13.7 +1.25
NY Silver 17.245 +0.313 +1.84
Emini S&P 1102.5 +11.5 +1.05
Emini Nasdaq 1810.75 +13.00 +0.72
Emini Dow 10243 +92 +0.89
That is why I agree JG that we are at iii of 3, with iv (abc) and v of 3 to go. The pop in the futures should be the a of wave iv of 3? Agree? Thanks for your opinion and insights.
futes slipping some:
Futures Prices
Market Last Change %
Crude Oil 74.65 +0.11 +0.15
Natural Gas 5.702 -0.048 -0.84
Corn 364.75 -7.25 -1.99
Soybeans 951.5 -2.5 -0.26
30yr Bond 118.59375 -0.25 -0.21
10yr Note 117.90625 +0.09375 +0.08
NY Gold 1099.2 +9.5 +0.87
NY Silver 17.14 +0.208 +1.22
Emini S&P 1097.75 +6.75 +0.62
Emini Nasdaq 1803.5 +5.75 +0.32
Emini Dow 10216 +65 +0.63
JG,
I don’t know what you said but I think I understand what you are saying: be careful because the EW count is not adding up?
2thfixr says:
January 24, 2010 at 11:40 pm
“Yup, that wedge should bring on the B wave in the correction upwards.”
If I redraw my lower trendline on the SPY 5min to the latest low, I get a downward channel. One or the other is the correct interpretation.
George, wave B will not start until wave A is complete. JG will call wave A wave 1, and wave B as wave 2. Think back to what just happened. We fell from 1150 to 1129 (1 leg down=A wave or wave 1, depending upon your count), back up to 1141 (1 leg up=B wave or wave 2), followed by next leg down to 1092 (2nd leg down = C wave or wave 3).
Think of this movement on a LARGER scale: 1st leg down from 1150 to 1050, 1st leg up from 1050 to 1115/1125, 2nd leg down to ????. That could be the A-B-C correction I’m talking about….or it could be the beginning of the Bear market that takes us below 666. Time will tell, and nobody knows the answer at this time. Does that help?
The wedge is just a TA way to search for the turning point to end wave 1 or A wave. Not all of us are as good at reading the MAs and MACDs as you. You just know when things are going to turn. Quite a gift my friend.
2thfixr,
Yes, that does help.
Thanks
George, at 10 eastern, we dropped a few points. Since I’m looking for an a-b-c correction to a wave 4, the a wave was up at the start, b wave was that blip we just got going down at 10 (perhaps, time will tell) and the c wave now has to get above 1102.39 to qualify. Since I am headed to work, I put in an order to buy SDS when the C wave reverses. abc will complete (possibly) the wave 4 (abcde is also possible), and then downside action again. Talk to you later, gotta go.
I need a GPS to follow you folks.
SRS gap closed as well as its sister URE.
SKF gap filled.
SOLD…1/2 of my TBT position for a 44c gain
Confusion high, trend down. Have not really understood why the game is being played now and what is to be achieved by it. The intervention was rather blunt and made amenable neither nationally nor internationally. Interesting times.
The Elliot wave counters seem to be mostly shouting “sell and/or short”. I don’t count waves. The technicals I’ve been following have been saying to be long since April with just a pause to neutral in June, despite a preponderance of the evidence both technical and fundamental to the contrary. But these indicators have now turned ugly (I’ll call it “neutral” again for now) over the last month or so. It seems that the turn back down that TA and the debt-phobes have been predicting like a stopped clock for 7 months is actually in danger of happening now.
Hi Yerk! Thanks for the oracle update. Feels good to be on the same side. Hope you are well.
SSI… love the name. Agree everything seems to be coming together (or falling apart, depending on p.o.v.) right now.
SSI,
I see that you have stolen my charts and didn’t even link back – not that that would make it OK.
What do you have to say for yourself?
George,
You always like something new…check
…ttheoryfoundation.org/t-theory-calculations.html
…every trading day morning around 9 AM
Two more Brinks trucks are on their way.
SPY beating feet to its 15min 36MA. That will be telling as to whether it can climb over it or not.
Meanwhile, what nice intraday swings!
Paula,
Thanks… I’ll check that out. Yes, I like new stuff. Bought a web course over the weekend and finished it yesterday. That may put me in the “sucker” class. Also bought another book on trading.
This addiction is addicting.
George,
Congrats!!!…Stay green and growing.
George,
In order for the market to become a bear, the
SPX needs to break the bottom green line on
Terry’s chart in the 1050 area.
Terry Laundry has made some excellent
predicitions. Now we have the battle of
the experts…Terry is calling for a 3rd
T bull wave into May…EW experts are
calling for the opposite. If Terry is right, I’ll
be spending a lot of time trying to learn
his T theory.
Oooh, that does sound like a battle of the wits.
Internet very slow today. Takes 5min to get and post on Matt’s blog.
Most inverse have their 15min MACD trendlines resting on the zero line. That’s a good place for a bounce if it is going to happen.
The internet system at our school was also down George.
Btw say hello to the 25k fund president. Maybe just 22k left but it’ll be enough for my plans.
Later!
K,
Congratulations! Go Prez! Show them the money!
paula says:
January 25, 2010 at 1:39 pm
George,
“Congrats!!!…Stay green and growing.”
I’m growing on the fertilizer from inside the beltway.
Congrats K. Give ‘em heck and make some cash.
Looks like wave 3 of A *WAS* done yesterday and we got a nice wave 4 of A today. You like wave 4′s George, nice swings, and this one was an abcde type instead of abc. 2 extra scalping opportunities. (how many scalps did you play today?) The c wave got above 1102.39 as I told you it would, and then started down. My auto trader kicked in and picked up the SDS I wanted. Poised for waves i-ii-iii-iv-v of 5 of A down tomorrow. Ideally, a hit on the channel line from my last chart (pink) will put in the bottom of the A wave. We’ll see if it happens.
Thanks for kicking off the blog with the primer JG. Appreciate your expertise greatly. I agree that i-iii-v of 3 may not fit the rules, but they are beautiful and so far, this wave structure down has been very symmetrical. Today sure looked like wave 4 with wave 5 to come tomorrow. Additionally, waves 2 and 4 both hit the top channel line and were both 12 point correctives. A symmetric drop in wave 5 tomorrow matching wave 1 should be 31 points (and tag that 1072 gap from November)! Wave 3 overall was 50 points, so 3131? should make 15, yes?
JG, not your computer, but the blog doesn’t like “less than” and “greater than” signs. That last line had those in there and it screwed them up.
31 point wave one less than 50 point wave three greater than a 31 point wave five would be perfect. But wave 5 can be bigger than 50 points and it wouldn’t violate EWT. We’re on the same page.
George, I have a favor to ask…
When you get a chance, I’d like you to mark up your screen shot of 1, 5,15 min charts from today on how you scalped today’s action. If you want an e-mail to send them to, just ask. I’d love to “see” what you were looking at to find the sharp turns (there were so many). If you don’t have time, I completely understand. No problem. Thanks.
http://www.ritholtz.com/blog/2010/01/nyfed-emails-about-aig-coverup-now-public/
The futures were rallying a bit after Apple’s earnings report, but turned south around 8:30pm when Obama announced his budget freeze. 1082 is the low so far.
2thfixr,
I’m assuming you mean the trades on SSO/SDS.
I first scalped SDS on the 1min. Its 15min MACD was negative showing it could possibly turn over and go down.
After the market established direction, I hopped in SSO as the chart below shows. I kept a 15min trade and was swinging the 1min at the same time. I exited the 15min at its 36MA.
SDS then took over with the same setup, except I used the 15min stochastic instead because SDS’ 15min MACD was above the zero line and the stochastic turned up.
Stochastic on the 15min is powerful and the trend is determined by the MACD direction plus its relationship with the zero line.
SRS and URE were good too.
http://i47.tinypic.com/2dt7zmt.jpg
Futures Prices
Market Last Change %
Crude Oil 74.67 -0.59 -0.78
Natural Gas 5.575 -0.088 -1.55
Corn 367.75 +3.00 +0.81
Soybeans 940.5 -11.0 -1.17
30yr Bond 119.15625 +0.84375 +0.71
10yr Note 117.734375 -0.171875 -0.15
NY Gold 1091.4 -4.3 -0.39
NY Silver 16.85 -0.295 -1.72
Emini S&P 1084.0 -8.5 -0.78
Emini Nasdaq 1791.00 -7.5 -0.42
Emini Dow 1008 -6 -0.06
wow after what an hour can do
Futures Prices
Market Last Change %
Crude Oil 74.45 -0.81 -1.08
Natural Gas 5.56 -0.103 -1.82
Corn 367.75 +3.00 +0.81
Soybeans 940.5 -11.0 -1.17
30yr Bond 119.09375 +0.78125 +0.66
10yr Note 117.734375 -0.171875 -0.15
NY Gold 1090.6 -5.1 -0.46
NY Silver 16.85 -0.295 -1.72
Emini S&P 1085.25 -7.25 -0.66
Emini Nasdaq 1793.75 -4.75 -0.26
Emini Dow 1008 -6 -0.06
oops sorry. i thought i read A&P -0.78 so i thought it made a big difference (sleepy head) make some money today guys. Real selloff is nearing. by next friday
K,
We miss you.
Miss you all as well George. I can try being here 3-4pm to do a scalp
Thanks George. Appreciate your time and help.
Can we break through 1085? That is the question!!!!
2thfixr,
The SPY 5min pattern yesterday turned out to be a channel. I would think it would go lower until either there is divergence or another pattern develops before a turnaround.
It has good support at 1092 where it could bounce.
http://i47.tinypic.com/33cu0xu.jpg