Given this sort of uncertainty over the wave count, it's probably best to just take things one week at a time. For now, the bulls remain "in control" with near term support at 1141. A break of 1141 should lead to a deeper correction. In the meantime, same as it ever was....
S&P 500: Thinking about the Upside...
With the S&P 500 now rigorously testing the January highs, it's time to think about some of the bullish upside possibilities that exist. In the medium term, a case can be made for the 1219 to 1235 on a decisive close above 1150 (suggest 1160?). I'll re-emphasize the point I've made a few times over the last several months: this remains the most unusual chart pattern I've ever studied or witnessed. Any Elliotician who suggests they have a "good handle" on what is transpiring from the March lows is either a) deceiving themselves or b) unknowledgeable.
13 comments:
We keep making new weekly highs on the 3LB so until the market takes out the midpoint I'll consider the sentiment to be bullish. Using fibo extensions we almost closed above the 61.8% at 1153.47. A close above that puts the 85.4% at 1172.08 as a target. The next two are the 100% at 1183.59 and 161.8% at 1232.33 which I would consider the highest price we may see this year. I seriously doubt that the 261.8% at 1311.19 will be seen anytime in the near future.
@Andy
It's certainly one of those times that you can't discount ANYTHING...
In synthesis, I'd say that the market lost its "moorings" all the way back at 956 last summer...
It DOES HELP, though, to have these (your) technical perspectives put onto & thus overlaying this...
Basically, when the "ship" (which is the equity market) has lost both it's rudder AND sail), well, instead of complaining about it, we can break out the "sextant", and have a look at the sky...
Hopefully there won't be TOO MUCH cloud cover to block out out the stars, moon, & sun (which are perhaps our best hope at the moment)...
@Amen
Those FIBO extensions provide another good navigational map...
Something "nibbling" at me though is the fact that there are no less than "10" chart gaps on the way down to the Feb low of 1044...
I'm thinking that at least SOME of those may be closed before we attempt higher (with the market so "technically" overextended at this point)...
I think in the end, the DOLLAR, is going to be the relationship that becomes important again... It's been consolidating the move from December for some time now... That may continue at least for a few more days while the Euro works off an OVERSOLD condition...
Just as one searches for CERTAINTY, there is instead, MORE UNCERTAINTY...
Here's a chart of the fibo extensions. The market has oscillated between the 61.8% extension and 61.8% retracement. Let the games begin
"I'd say that the market lost its "moorings" all the way back at 956 last summer..."
That's the point at which my longer term wave count had to be completely reconsidered and the market started to behave in really unusual ways....
Amen. On the 61.8% extension that leads you to 1153, why did you start it at ~1104? What was special about that point?
Andy T
I used the high of 1150.45, the low following that high of 1071.59 and the retracement high of 1104.73 to make the fibo extension chart.
Also even if I used the low of 1044.05, high of 1112.42 and retrace of 1086.02 the fibo extension levels are similar.
The sentiment of this rally is really something to see. Way back in early August DSI from trade futures reported 88% bulls for S&P traders which was the same level from 10/9/2007. AAII bulls currently stand at their highest levels since the Jan highs.
I remember last August that EWI was saying that the peak of wave 4 of (3) of circle (primary) 1 would represent a strong target for the rally, on the dow this was 9,654-9,794. Ever since we broke that sentiment has remained elevated though the excess optimism has lead to only minimal upside in prices.
On the DOW if we break the Jan highs with some authority I'd expect us to push all the way up to the 11,300 mark which would be the 5/8 retrace. The 3/5 is at 11,107 and good ole phi at 11,246.
I think the chart on CLNE looks interesting, I'd be curious to hear what others thought of it.
McF
Looked at CLNE. Weekly 3LB reversed up 12/24/09 and started trending 3/5/10. The reversal price is 15.78 and mid is 18.81. The monthly is not trending but did reverse up and confirmed so 2 bars. the monthly reversal is 4.85 and mid is 11.46. These of course will change if it continues to make higher weekly and monthly highs.
It also has closed above the high from 2008 of 19.95 and 2007 high of 20.65.
I hate it when you all have a party without me!! I am completely on board with the bullish scenario unless a giant shoe drops.. I have too many anecdotal stories to share, but the gist of it is, "people" as well as "banks" are not being held accountable for their thriftless ways.. my jaw dropped listening to NPR today about overdraft fees. The only sign of de-leveraging that I do see, is in the "strength" of the USD.. that is the trend line i am most keen on watching.. (thanks for the charts, Andy! I owe you some music!)
NEW THREAD UP
Hello My first post on your great blog, although I have lurked for a while :)
I'm not an Elliotician but I have an alternate view on the S&P. I think we could be setting up a bearish "three drives pattern". So far we have two almost identical measured moves, a pullback and hold to the 1130 level sets up the third leg with an upside target of 1199-1201 and the top of the channel. I realise its quite simplistic but they often work. The same pattern is repeated in the FTSE, in EURUSD (in reverse), cable and importantly the dollar index.
My messy chart is from last night:
http://2.bp.blogspot.com/_D1n1atSWw4c/S53M674nlNI/AAAAAAAAA0c/Ow7LDj18nYs/s1600-h/s%26p+futs+daily.gif
Nicola
Post a Comment