Wednesday, September 29, 2010

Morning Update - Prechter Popped up Again on CNBC

Above is a video of a Maria Bartiromo interview with Prechter on CNBC that's dated Monday, September 27th, 2010.  She holds his feet to the fire a bit by continuing to ask him about his Dow below 1,000 call.  Check out and let us know what you think about the interview, and Prechter in general, in the Elliott Wave Forum.  Thanks!

The financials are lagging this rally badly.  They failed to break above their August highs with the rest of the major indices, and they even failed miserably to break above its September 21st highs.  As long as this continues, it's a huge warning sign for this market.  The market cannot sustain a long bull run without financials.  Period.  Still watching the euro....



Federico Fernandez said...

Hi Todd,

I couldn't write before, but I read your blog everyday.

I wasn't agree with your counts for S&P for 2 or 3 weeks, I knew, that I should under estimate the force of this rally. I wasn't agree with your count for EUR/USD, I quite sure, EUR will reach 1,40 or 1,49 before a significant decline.

But now, I'm completely sure S&P is going to fall!!! And believe me Todd, it's going to be big, very big. I think we are almost there, may be this Friday is our day, maybe next week, but not longer.

Todd, S&P is going to reach the 900 zone. So, let us play the bad bear :)

I wrote you before, that I was expecting the S&P to reach the 1160 or 1170 zone. Maybe 1150 was too much for the bulls. Maybe we have seen the top. Maybe 1155.

I would like to share my works and counts with you. As soon as I'm finish with a customer, I gonna dedicate more time to my website and try to post my research (I'm too old-fashioned, I really like paper and pencils)

So Todd, I really wish you lot of success with your trades and your thoughts. I wanted to write you, when you were a bit confused and dissapoint. I think your counts are correct. And I think, the time will show you that you were right.

Good Luck!

convictscott said...

I agree with you count, I believe the market *wants* to fall here (though it will be hard without a euro top). Market mascot aapl had a weird flash crash-esque type thing yesterday, and as zerohedge so eloquently SPX = AAPL = AUDUSD.

However spx 1050 is a major line in the sand for the market, if by some reason we get there (we got within 2 pts today) that would likely set up a chain of short covering that would set in motion a test of 1070 spx. If we get there and pass that test, that would likely bring in fresh bulls from the sidelines and very well take us to new highs.

Whereas the charts TODAY look like there is no way we go up from here, markets change everyday. One more bar of short covering could easily set in play a chain reaction which changes the whole dynamic of the market and propels us to new highs.

One distinct possibility is a short covering rally to a failed test of 1070 spx to end the month, then plummet.

IMO people saying "I am absolutely sure that this and that will happen" set themselves up for an ass-whipping. ANYTHING can happen in the market. What makes sense here, is to play long with the short cover above 1050 and get short on any weakness. To deny the bullish potential here, on the basis of wave counts that have not worked in a long long time is foolish in the extreme.

PrincipleAnalysis_Blogspot_Com said...

Hey Federico, it's good to hear from you again.

Looks like you were right about the market, it sure did continue higher. I still think it can get into the 1160-1170 zone you mentioned, and perhaps to the 1181 area surrounding the prior 4th wave and 78% fibonacci. It's possible since I don't see any signs of a top yet, but I do recognize that it can certainly top at any time now so I'm not going to wait and expect higher levels from here, I'm merely mentally prepared for it to happen, that's all.

I sure like your attitude of a big decline because I'm certainly positioned for one. I'd really like to hear your thoughts on my analysis whenever you have the time, ESPECIALLY when you disagree with me. And you can share your charts with me through the forum if you'd like:

Good luck to you too man. Talk to you later then.


PrincipleAnalysis_Blogspot_Com said...

I'm going to check this out tomorrow. Thanks!

convictscott said...

I do mean 1100's :-)

By way of explanation I trade exclusively on a set of candlestick patterns with mechanical entries and exits that I've been trading since 2002, but I use EWT as an overview or roadmap as to when to start stalking a trade. I *never* enter a trade based on a count alone, I always wait for price to confirm my view.

I got short on break of the daily low, and was stopped out and long on break of the daily high, and then subsequently stopped out. So I was badly fooled by the end of quarter games ;-(

To me there is a lot of bearish potential here, it could quite easily become the unicorn (P3) . But I keep in mind that if we go up from here we are looking at minimum a test of 1070 spx. If that test fails, new highs become the highest probability. I want to remain mentally flexible enough to profit no matter which direction wins.

To me the only setup today is a bearish one, and it fits in nicely with your comments about end of quarter.

Yesterdays Outside Day is a case of both longs and shorts getting screwed, it sets the market up with fresh participants who are by definition weak hands (they got in today). A break of the daily low is a short for me, with a stop 1 tick above the daily high.

To me the highest probability outcome tonight is a retest of todays intraday high. If that fails, then the bearish case all of as sudden rockets up in probability.

Right now, its too early to tell and still maybe only a 60/40 call to the downside. Also, since there was clear games being played with the tape I'd counsel caution about looking too closely at the charts for yesterday.

PrincipleAnalysis_Blogspot_Com said...

I couldn't agree more with what you said.

And especially the fact that if today's highs hold then things look real good for the bears. If today's highs are broken, especially sharply with no problem, then I think the 1173-1181 range is the next stopping point. Beyond that we have new highs for the year and a lot of problems for the wave count in my view.

The beginning of October should end up proving quite decisive for us wavers in my view.

Talk to you later.