Monday, August 03, 2009

Elliott update

Sometimes, it just looks right; complete and topping:


On this daily chart, it will take a move below 966 on the SPX to confirm a completed five wave move up and suggest a decline to the area of the previous wave four, around 850. If that were to occur, we can assess the viability of further decline, or another rally, at that time. For now, the count looks right, resistance clear (horizontal blue line, generated from the previous wave 3 high) and a possible top at hand.

A more aggressive short can be gleaned from the 60-minute chart:


My trade of the week will be to go short if the SPX falls below 995 as per the above Blue Wave sell level. If the market rallies further, I'll probably stand aside, unless momentum dramatically improves. Absent such a scenario, the risk:reward at this point is on shorting weakness.

One more chart.

GFRE is now up over 300% from my original post last December:


The weekly chart is suggesting another 100% from current prices, but I'm taking some off the table here, to lock in a very nice profit and letting the rest roll-up higher, at least until gravity comes back from vacation.



A

9 comments:

Anonymous said...

Yeah. I've heard THAT before.

Go all-in long .

End of story.

Anonymous said...

Is this the most bullish count? I tend to think we will see 1100 before 995. I think we kissed off 1000 for a while. Don't you think? Let us know if there is an alternate count through your software...

Anonymous said...

You and I both know we have to be right at the top when people want to jump in long when all the technicals from daily down to 5 min. are screaming "sell". Probably the ones who were wanting to go all in short on March. 6.

- cramar

tapped out said...

Alan?

That Tech anaylisis stuff has got you roped and tied. Don't forget about human behavior here. That 17month bear mkt was just a normal reaction to a previous bull, and this new bull mkt forming is just a reaction to the normal bear that ended in March. I've had my full of the doom report, I'm looking to fill my head with sugar! What can I say..... I'm only human.

Anonymous said...

Hey Cramer: What freakin' TA are you using? Been overbought for a couple weeks, but the renko trend on SPY is still UP! Trade the trend if you aren't you are speculating. I don't even understand what you are talking about.

Anonymous said...

Last week the Vickers Weekly Insider Report listed current insider selling at 4.16 to 1. That means more than four times as many shares owned by insiders are being sold than bought.

The last time this indicator was this high was the beginning of one of the biggest sell offs in history, October 2007, the top of the 2002-2007 bull market.

L

Tom D said...

Elliott wave like that first chart is like kindergarten fingerpainting. The third wave of an impulsive five wave move should always be the most impulsive (most acute angle). Yours is the least so. GET was always dumb thirty years ago and still is at the top of the dumb charts.

Allan said...

Tom:

Here is the thing about Elliott, it's not tradable. Don't get me wrong, the patterns are there, they are just not predictable. Alternatives flourish, which renders forecasting and trading not much more then a game of hunches and guesses about what the final form will look like.

GET on the other hand, as you point out, deviates quite a bit from pure Elliott in order to uncover two high confidence trading patterns. First, the observation of four waves that strongly suggest a fifth wave in the direction of the first and third waves. Second, the completion of five waves that strongly suggest a reversing ABC pattern to the area of the previous fourth wave.

That's it, just two structural set-ups that yield high confidence trades when confirmed by supporting indicators, In other words, two patterns that give the trader an edge. Patterns that are rooted in Elliott, but at times are far from orthodox EW theory.

It's the one tool that I have been using since the last century, with consistent results.

Find something that works.......then use it.

Anonymous said...

Kudos on GFRE.
Goldfungus