Financial markets are known to push people just past the breaking point before reversing strongly back to the larger trend. This is perfectly normal for wave 2 behavior, which I believe is over at this point. While our line in the sand laid forth on Wednesday was pierced to the upside, the utter lack of strength in our once leading indexes, the $NDX and $COMPQ, certainly beared watching. As I write, the $NDX is down a little over 2%, while the larger $COMPQ is down just under 2%. Yes, I know that DELL had bad earnings, that accounts for one stock. Something else had to give to get the reversal in breadth, and price, that we have this morning. For those of you who use pivots [...]
I will apologize for my absence tonight, I had a few things come up. This will be quick, but I will follow up with some more commentary during the day tomorrow.
As the market stands right now, we have breached Fridays highs on some of the indexes ($SPX, $INDU, $RUT), leading us to seriously question our wave 3 count. Here’s what I mean.
While losing status quickly, the true EWT rules allow for a retracement of up to 100% of the first move down. Any sharp turn down could quickly accelerate lower.
The probabilities of the near term bearish case are waning rapidly. Any break of the uptrend lines of this rally (not [...]
I’m going to make things extremely short and sweet tonight as our comments counter indicates that the majority of our audience is either enjoying a week in the Hamptons or has simply walked away in disgust until after Labor Day.
I’m not going to sugarcoat it – today was not a fun day for the bears. I expected a little rally today, but low volume or not, the breadth was very strong and the bulls were in complete control. Even though we had a bit of a pullback late in the day, we closed not too far from today’s highs. So, the one question in your mind is probably where do we go from here. The answer is in the only chart I’m going to post tonight, [...]
I am not one of the random speculators out there that is willing to believe that the market is being “held up” by any particular stock. Or that their is one particular “shoe” that is waiting to drop, but I do think the action of FRE and FNM actually are on everybody’s minds. While in some instances, this would be an argument against a particular wave pattern, I feel that the due to extreme herd mentality surrounding these issues, they are worth observing. The orange lines on the chart represent an equality Elliott often speaks about in corrective moves.
The green channel is also used to identify corrective patterns in EWT. I have drawn [...]