Benedict Arnold

Jul 032014
 
 July 3, 2014  Posted by at 7:22 am No Responses »

We still could be tinkering around in fourth wave territory, but it looks as though the bulls may have finally decided to start working on the fifth wave of black  3 this morning.  To keep the continuity between charts, I put the larger degree count in red so it is easy to find on the short term chart.  The apparent three wave move in the DJIA that I pointed out in the last update gives me reason to believe the market may throw a curve ball with an expanded flat that completes at red ‘or 4’, but we’ll deal with that if it presents itself.  Good luck peeps and happy 4th.  Love your country, but know your history so you don’t do it blindly.  BA out……..

 

SPX2

Jun 272014
 
 June 27, 2014  Posted by at 7:17 am No Responses »

Yesterday the DJIA put in a sequence (highlighted in blue) that hints at a more extended move in that direction.  The simplest retrace would be back towards the ATH’s in wave black B of a flat retracing a minimum of 90% of wave black A.  A combination correction in blue would be the least likely as a result of the S&P 500 not retracing the 23.6% for it’s presumed fourth wave and the odds of that weighted at 15%.  A running triangle wave B in red is still a very viable option as well.  Ultimately I’m expecting more lows it’s just a matter of whether we go sideways and then down or retest the highs and complete a round trip lower.  Either way I fully expect black C/Y to be realized.

 

dji

Jun 262014
 
 June 26, 2014  Posted by at 7:34 am No Responses »

I’m going to try a new format over here since I feel the space is getting under utilized.   Each morning I’ll toss up a 60min chart with an updated count to map the  progression on this long strange trip we’re in.  SPX appears to have put in three down into yesterday’s open and is now bouncing in either a wave b, or is about to rip some beary furry faces off in a nested third wave (blue alt count).  There are still entirely too many options on the rally wave from yesterday’s low so I’m forgoing a more detailed short term chart for the sake of simplicity.

 

 

SPX

 

 

 

Jun 102014
 
 June 10, 2014  Posted by at 9:34 am No Responses »

I’ve been tracking a diagonal in the Dow Jones Industrials for what seems like forever, and finally two other markets decided to join in the fun, NYSE Composite and the S&P 500.   All three markets have clear invalidation points to the upside for the current wave and plenty of room to work in both directions.  As I believe volatility is set to pick up, I also believe there is a slow grind upward still in progress.

 

DOW JONES INDUSTRIAL AVERAGE

dji

 

NYSE COMPOSITE

NYA

 

S&P 500

SPX

There is no rushing these structures, so the road may be long and boring for these to play out.

May 132014
 
 May 13, 2014  Posted by at 8:36 am No Responses »

It’s been a long sloppy mess the past few months as anyone trying to trade anything but the range has been slapped around.  Markets yesterday put in a breakout move higher finally, but until there is some proof of strength it would be very wise for the bulls to be cautious.  A few terminal structures in multiple markets have appeared and are nearing a point of completion.  Exhibit A is the NYSE Composite.  This is what us in the Elliot Wave world know as a ending diagonal, but regular technician would call it a rising bearish wedge.

NYA

The next index that we’ll address is the S&P 500.  Although not a diagonal, the structure that proceeded the present wave, a triangle, warns that the thrust out move is a final gasp at trend continuation.  The other interesting thing is that waves 1 and 5 tend towards equality when the third wave is extended.  Presently that number sits at 1910.

 

SPX

Finally is the Dow Jones Industrial Index which has been putting together a broadening top.  All three of these markets are pointing to some more upside, but with the terminal patterns that they are displaying it would seem that risk is presently skewed in the bears favor.

dji

In conclusion, though most of the markets are tacking on new all time highs, they find themselves in a rather precarious position from a technical and Elliott Wave standpoint.  It would likely be in ones best interest to not chase this breakout.  Good luck out there peeps.

Apr 292014
 
 April 29, 2014  Posted by at 8:54 am No Responses »

The charts are giving some warning signs that all is not well in the land of OZ where we have a green paper road instead of a yellow brick one.  We all know how that bricks and sticks (makes paper right?)  thing worked out for the three little pigs.  Instead of droning on about stories with well known outcomes, how about we get into some charts where the outcomes are not quite as clear.

The Russell 2000 and Nasdaq Composite have both outperformed to the downside compared to the larger cap indexes such as the Dow Jones Industrial Index and the S&P 500.  I’d personally like to see another high out of both the Russell and Nasdaq, but I wouldn’t be astonished if they have put in their LT tops here either.

RUSSELL 2000

RUT

NASDAQ COMPOSITE

DUCK

 

While the above two are somewhat telling, the BKX (KBW Bank Index) is the big red flag.  There is a market adage ‘as go the piggies, so goes the poke’ meaning without the banks, there will be no sustainable rallies in the markets.  This index is sporting a nice five down sequence at the moment.  With the exception of the wave C of a flat, all other Elliott Wave sequences have paired five wave moves.  So with looking at this current decline as a lone five wave sequence at present, it is relatively easy to draw a conclusion that another five wave sequence in the same direction is required to make a pair.  Touching a bit more on the single five wave sequence in a flat, more importantly in this case a running flat, there are some specifics to note.  Running flats are skewed in the direction of trend meaning the wave B exceeds the origin and wave C fails to exceed the start of wave B.  The theory is that the strength of the coming move in the direction of trend is so powerful that it twists the corrective structure in the trends direction.  Pretty scary if you’re a bear huh?  On the flip side, these structures are rare, so one needs to take in other considerations before assuming a running flat as a primary count.  I personally go with the simpler structures first and make more complex ones ‘prove’ themselves to me.  It is all about probabilities, and using this approach keeps you out of trouble more often than not.

KBW BANK INDEX

BKX

In conclusion I’d like to see another high in pretty much every market directly with the exception of the BKX, but with the under performance of the small cap indices, market tops across the board wouldn’t be a huge surprise  here either.  Keep you head up and risk down.  Trade well peeps.

Apr 082014
 
 April 8, 2014  Posted by at 1:20 pm No Responses »

The larger degree fourth wave decline has proven itself thus far, but a near term bounce is becoming much more likely.  I’m currently on the fence as to whether the move into the all time high’s was a wave B of an expanded flat or a thrust up out of a triangle.  With either of the scenario’s it still calls for the same degree correction, but the structure that unfolds would be slightly different.  If it was a wave B of a flat, then we would be looking at a five wave sequence down from the high’s to complete C of (4).  If it was a completion of an impulse into the highs then the current decline wave will take the form of a zigzag most likely.  Sifting through the longer term charts I found it rather interesting that all of them seem to point to a particular point.  Fourth waves have certain expectations that come with them and one of the ones that has kept me out of trouble in the past is expecting a minimum 23% retracement of the same degree third wave.  If you look at the retracement levels of all the index charts below you’ll notice that the previously mentioned percentage sits right at the previous intermediate swing low.  That is where I believe this decline has a good chance at terminating.

TRANSPORTS

DJT

 

DOW JONES INDUSTRIALS

dji

NASDAQ COMPOSITE

DUCK

RUSSELL 2000

RUT

S&P 500

SPX

NYSE COMPOSITE

NYA

Now with that pointed out, I don’t believe for a second that we will get there in a straight line.  This is presumed to be a fourth wave and has a reputation for being rather complex.  The MMTW initiated a buy activation yesterday by closing below the 30 mark, but that just serves as a heads up that a bottom is getting near.  Not until it closes back above the 30 mark on a daily basis is the buy trigger tripped.  Also of note is that it was unable to reach the 70 zone and close there to initiate the original sell signal for this decline which would seem to indicate there is more weakness here than meets the eye.

mmtw

That’s all from the market weather man today, so keep it in your forecast.  More down with increasing chances of up.

Mar 302014
 
 March 30, 2014  Posted by at 4:39 am No Responses »

You can check out, but you can never leave…….  Well, I guess you can, but how are you supposed to make any money?  This week will mark the one month point of this anticipated fourth wave.  This week will likely be more of the same with choppy sideways price action in the range that we’ve maintained up to this point.

spx

The MMTW dropped to sub 30 on Thursday initiating a pending buy trigger and the buy trigger was tripped Friday with a close at 33.25.  From the looks of the open, this thing wasn’t kidding.  Even with a solid count I respect this thing when it enters the -30 and +70 zones.  The past years 80% track record is not to be traded against.

MMTW

Since I’ve been looking for a large flat in most of the indices, there is one minor issues that the bears need to wrap up before a substantial decline can take place I believe.  The NYA has not satisfied a 90 percent retrace to qualify it for  a flat, couple that with the MMTW buy trigger and I think we are going to see some near term upside in the larger correction.

NYA

Ultimately I think there will be some more downside coming down the pike, but not just yet.  So as a recap, we’ve got another five weeks or so of correcting to do for this presumed fourth wave to meet the duration expectations of the same degree second wave.  MMTW just flashed a buy trigger so don’t go getting all bearish immediately.  NYA has yet to satisfy the 90 percent retrace of A requirement to qualify it for a flat so that keeps the door open to more near term upside potential as well.