Wednesday, March 11, 2009

Sometimes, less is best

Exactly when is less best? When Allan doesn't have time to post, but finds time anyway, albeit not a lot. So let's get to it:

This is what we are up against. The above double 120 minute charts make the case for further advance as well as imminent decline. Starting the EW chart on the right we see an unfinished five wave advance, but accompanied by a False Bar Stochastic Sell in the making:

While the Blue Wave chart on the left shows an uptrend, but one that is losing momentum and looks about ready to turn over:

As of the open Thursday the Sell signal comes in at about 715, just about six points lower from where the SPX closed Wednesday.

There is only so far an end-of-day analysis can go and this is about it. I can make either case for Thursday, so I made them both.

You choose.



Niks said...


I have been reading your blog for a very long time.
Thanks for teaching us various things about trading.

I remember long time back you had mentioned GNBT sometimes.

There have been lot of movement in this stock in last 2 days because of few PR's(I think a bit too much movement).

Whats do you think about this stock. Do you consider it like NNVC? If not then why not.

Anonymous said...

I think we are very near the end of Primary 1 down that started above 14,000.

Many of the bank stocks are falling on lower momentum. It is a sign they are near their low.

The count looks like we are in 4 of 5 of primary 1.

I have DJIA resistance starting at 7174 or the 38.2% retracement of 3 of 5 of primary 1. The fourth wave of 3 of 5 is in the 7105 to 7405 range.

Likely, we'll push up to a new high in the 7174 to 7405 area, and roll over from there. I suspect we'll marginally take out the 6469 low in late March or early April, and that will end Primary 1.

There should be a 61.8% retracement rally of the 14000 to 6000something decline. That will be primary 2.

I'm looking to put some 401k money to work for that rally, and buy a couple of foreclosed homes as well.


Anonymous said...

Oh crap I took the sell signal at 715 and dumped all of my long calls.. Now the market takes off. Unbelievable.


Anonymous said...

I really don't have any predictions here. Either stocks have bottomed or they will have one more decline. I tend to believe the latter, but it is splitting hairs.

The t-note market.

Looking at the yield chart, the 10-year looks like it has moved up in 1-2-3-4, and is now in a a-b-c-d-e triangle 4th wave. Wave e of 4 is near its completion. I'm expecting an upside breakout and rates will rise further.

This is key for a lot of reasons. 1) There are signs the economy is stabilizing in retail sales and rising bond yields will confirm that.

2) A 5 wave off the low of 2% will signal a low in yields may be put in and that could spook stocks.

Rising oil prices, another sign of a stabilizing economy, could also keep a lid on this stock rally.

Overall, I'm amazed at how low yields are given we have coupon auctions every month now and the Congress sees those lending as an unlimited resource.

Going back to the depression, from the time stocks bottomed it took anywhere from 4 to 9 months to see positive GDP figures after that.


Anonymous said...

Pat, most times it can be helpful to see what happens at a key level, like 715 today. The first touch , or break can result in a reversal. the second time down and thru should confirm the move. hope this helps.