2013/05/23
SPX Update 23.05.2013
Short update of S&P500 - I still prefer the blue scenario, but we need to see, how it will play out in the next days. Should be make a new low tomorrow, so I would expect the finish of (i), linked with divergence in RSI. In other case the impulse down is just a-wave of alt(iv).
Top or not the Top
Well, it is a while I wrote my last post about this crazy and manipulated market. But today's event can be probably marked as a big V-Day (V for the victory). To be short - /ES dropped over 40 points after release of FED minutes, which appoints a probable end of QE program.
The Big Picture
But in EW trading you need to ignore the news and focus only on the price moves and counts. First I would like to show my global EW count of the current market move and you could compare it with my analysis from March 2010 about the Big Picture, which is very similar to where we are now.
Based on today's move (including timing, count and price channel) we have a very good chance to see a begin of a corrective [C/Y], which could last 1,5-2 years and correct the [B/X] wave by 61.8% of [A/W], which has a minimal EW target of 1126 in SPX.
The Risk
Unfortunately there is always a risk of EW alternatives, which means the Y-wave is not over yet. The down move can only be confirmed, if we break the 61.8% of the entire move from March 2009 and the blue line of the next alternative count:
The Big Picture
But in EW trading you need to ignore the news and focus only on the price moves and counts. First I would like to show my global EW count of the current market move and you could compare it with my analysis from March 2010 about the Big Picture, which is very similar to where we are now.
Based on today's move (including timing, count and price channel) we have a very good chance to see a begin of a corrective [C/Y], which could last 1,5-2 years and correct the [B/X] wave by 61.8% of [A/W], which has a minimal EW target of 1126 in SPX.
Unfortunately there is always a risk of EW alternatives, which means the Y-wave is not over yet. The down move can only be confirmed, if we break the 61.8% of the entire move from March 2009 and the blue line of the next alternative count:
Short Term view
Right now I see two main options from the short term perspective: the long up-move is over and we go into a massive correction in the next 2-week and price target of 1536 and lower (favorite scenario) or the move is not over yet and we will need an another up-leg to finish it, before we drop (alternative scenario).
Wish you all a good trading and hunting
2010/03/25
NOT A BULL MARKET UNTIL 2017/2018 – The Global picture
Ok, I am back on EWwaving and EWtrading, Hey! I am 30 years old and was born in Kiev, Ukraine and now live in Germany. Trading and Elliot Waves are my passion. I work as a consultant in the securities industry.
After failed hunting the wave IV, P2 or whatever, losing money and mind, I took a personal break, and during this time I was able to re-analyze the global picture, which I would like to discuss in this post. In the last few month I also have realized, that there are two big groups of traders who emotionally BELIEF in BULL or BEAR markets. If an investor is talking about a BEAR market, everyone is adjusting their EW count to a P2 scenario, with a utopian target of around 1,000 in DOW in several years (e.g. EWI). The other group, BULLS, are seeing the beginning of aBULL market with a DOW target about 20,000 in the same time. The discrepancy is about 19,000 dow points. But the are a lot of reasons, why both these cases do not make any sense.
The BULL case: everyone knows, that government world-wide is printing money (FED, EZB), less tax-incomes are increasing public/national debt DRAMATICALLY (German’s debt in 2009 increased by 7.1% or 112 Bil. EUR, US budget deficit hit a record $1.4 trillion in 2009, etc.). Unemployment hit over 10% in the USA and is probably bad on average in Europe. Even if the stocks are rising, it means for me nothing than the notional VALUE of money is just GETTING DESTROYED. Or in other words – hidden increase of INFLATION. Inflation will be a very good way to pay back the dept in the coming decade(s). But in reality, we just know only 10% of the big story, without mentioning any impacts of CDS’s, defaulted Corporate Loans, CDOs and other financial issues, we will be faced with its impact on us and the economy in the next 5-10 years. For me there is no one single reason from an economical perspective, which gives me at least one single argument to say that we are done with the recession. If you do not believe me, there are 4 economic cycles in every economics school book you can learn in your second semester. When we will see the Bull market we are still missing one cycle in between.
The P2 BEAR case: I just want to point, that this case is coming from EWI, which will be destroyed, after we reach a new high. Dow at 1,000 and S&P500 at 150 is not realistic, at least only because of the huge amount of virtual money, printed by the FED. Such case means unemployment of more than 50% – possible, but until the FED has a right to issue money, bonds, which will be accepted by all WMF members (hope you understand what I mean) – I see this case as UTOPIA. Even if everything gets worthless, Apple/Amazon/Google will have enough cash to hold Nasdaq100 over 900 – joke. Mr. Preacher- please adjust your count!!!
And the OTHER case: I was looking for some other case, which adjusts to the economical and political issues, we have seen from year 2000 till this time, when the economy can REALLY solve the old and new issues, to give people and government new BREATH for the BULL run. Two weeks ago I read an article in a German newspaper, which described the situation, when all EU countries will reduce its debt deficit by only 0.5%/year, only in 2018/20 we can reach the same economical state of 2007. Historically we had similar economical disasters, which took on average 17/18 years to solve, and produced finally a new BULL run. This happened in 1906-1923, and in 1966-83. The similarity is obvious to the time from the year 2000. If in 2000 we completed only the cycle III, we should be in the cycle IV. Based on new count I see a Double Flat formation, which will last until 2017/2018. Between 2000 and 2009 we only finished the (W) wave, which has an irregular flat pattern. Now we should be in the (X) wave into the 1500ish area. Please see the daily chart below.
Daily Wave count: We are in the wave (X) which is moving from 666, and has a target between 95%-110% of Wave (W). The minor (A)/(W) is already finished. Now we are in the (B)/(X)-wave. The first A/W-wave of (B)/(X) is finished, and I am counting the B/X wave. Right now we should be in the (a)/(w) of B/X.
Short term count: the red (a)/(w) shows a w-x-y pattern right now, it is still not clear, how the y-wave will extend. I see a sub-wave structure of a-b-c waves, where the first part of a' of y is complete and we are now in the b' of y. In the next days we should complete the b' wave which can be irregular or running flat and start the final up c' of y, with a minimum target of 0.618 of a, which is right now about 1204.5. But depending where the b' will end, the min target of y need to be adjusted.
For any questions or comments, fill free to write me.
After failed hunting the wave IV, P2 or whatever, losing money and mind, I took a personal break, and during this time I was able to re-analyze the global picture, which I would like to discuss in this post. In the last few month I also have realized, that there are two big groups of traders who emotionally BELIEF in BULL or BEAR markets. If an investor is talking about a BEAR market, everyone is adjusting their EW count to a P2 scenario, with a utopian target of around 1,000 in DOW in several years (e.g. EWI). The other group, BULLS, are seeing the beginning of aBULL market with a DOW target about 20,000 in the same time. The discrepancy is about 19,000 dow points. But the are a lot of reasons, why both these cases do not make any sense.
The BULL case: everyone knows, that government world-wide is printing money (FED, EZB), less tax-incomes are increasing public/national debt DRAMATICALLY (German’s debt in 2009 increased by 7.1% or 112 Bil. EUR, US budget deficit hit a record $1.4 trillion in 2009, etc.). Unemployment hit over 10% in the USA and is probably bad on average in Europe. Even if the stocks are rising, it means for me nothing than the notional VALUE of money is just GETTING DESTROYED. Or in other words – hidden increase of INFLATION. Inflation will be a very good way to pay back the dept in the coming decade(s). But in reality, we just know only 10% of the big story, without mentioning any impacts of CDS’s, defaulted Corporate Loans, CDOs and other financial issues, we will be faced with its impact on us and the economy in the next 5-10 years. For me there is no one single reason from an economical perspective, which gives me at least one single argument to say that we are done with the recession. If you do not believe me, there are 4 economic cycles in every economics school book you can learn in your second semester. When we will see the Bull market we are still missing one cycle in between.
The P2 BEAR case: I just want to point, that this case is coming from EWI, which will be destroyed, after we reach a new high. Dow at 1,000 and S&P500 at 150 is not realistic, at least only because of the huge amount of virtual money, printed by the FED. Such case means unemployment of more than 50% – possible, but until the FED has a right to issue money, bonds, which will be accepted by all WMF members (hope you understand what I mean) – I see this case as UTOPIA. Even if everything gets worthless, Apple/Amazon/Google will have enough cash to hold Nasdaq100 over 900 – joke. Mr. Preacher- please adjust your count!!!
And the OTHER case: I was looking for some other case, which adjusts to the economical and political issues, we have seen from year 2000 till this time, when the economy can REALLY solve the old and new issues, to give people and government new BREATH for the BULL run. Two weeks ago I read an article in a German newspaper, which described the situation, when all EU countries will reduce its debt deficit by only 0.5%/year, only in 2018/20 we can reach the same economical state of 2007. Historically we had similar economical disasters, which took on average 17/18 years to solve, and produced finally a new BULL run. This happened in 1906-1923, and in 1966-83. The similarity is obvious to the time from the year 2000. If in 2000 we completed only the cycle III, we should be in the cycle IV. Based on new count I see a Double Flat formation, which will last until 2017/2018. Between 2000 and 2009 we only finished the (W) wave, which has an irregular flat pattern. Now we should be in the (X) wave into the 1500ish area. Please see the daily chart below.
Daily Wave count: We are in the wave (X) which is moving from 666, and has a target between 95%-110% of Wave (W). The minor (A)/(W) is already finished. Now we are in the (B)/(X)-wave. The first A/W-wave of (B)/(X) is finished, and I am counting the B/X wave. Right now we should be in the (a)/(w) of B/X.
Short term count: the red (a)/(w) shows a w-x-y pattern right now, it is still not clear, how the y-wave will extend. I see a sub-wave structure of a-b-c waves, where the first part of a' of y is complete and we are now in the b' of y. In the next days we should complete the b' wave which can be irregular or running flat and start the final up c' of y, with a minimum target of 0.618 of a, which is right now about 1204.5. But depending where the b' will end, the min target of y need to be adjusted.
For any questions or comments, fill free to write me.
2009/11/17
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