Stocks tanked today and the internals suggest it was broad based and ugly. The bears were in full control today and the bulls didn't even really attempt to enter this market after this morning's mild push higher failed miserably. News headlines suggest Libya's unrest is the cause for stocks falling but as extreme and overbought this market has been the past few weeks, it could have been knocked over by Paris Hilton announcing a new BFF.
Robert Prechter has just released a complimentary online edition of Elliott Wave Principle
The count from the high is ugly if it's an impulsive decline, but imperfection this early in a trend change is not unusual. I'm unsure where Submicro wave (5) should be placed, but at this point any meaningful rally would get me on the short side with a stop above last week's high. Sure this could be another fakeout, we've seen plenty, but the risk/reward here is way too desirable. Whether it's Primary wave ((3)), or just a correction in a bull market, an S&P move of 100-150 points lower is likely in my view once we can confirm a top is in fact in. So whether it's Primary ((3)) or not, there's money to be made on the short side. A close beneath 1275.10 would confirm that a top is in.
Learn Elliott Wave Principle
My forex software is not cooperating with me today but nothing has really changed from yesterday's post. Things looked good for the bears last night but this morning we saw most of those bearish gains taken back by the bulls. The wave structure is unclear but with the long term trend still down, I favor the short side as long as it trades beneath 1.3743.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
3 comments:
Until major trend lines are broken, be careful. I have my own counts that suggest that top not yet in and we could still go higher, but yeah I think we are also to top but may have some play to the upside left.
"It was another semi-unbelievable week of machine-like advances in the stock market."
Not really unbelievable...we had what, +$10 Billion in POMO this week? The purpose is to make the stock market rise...it is doing that. It's when inflation get's too hot...when that happens the gig is up. Soon as those rates rise the faux economy will be choked off. Either that or we will see QE3. I suppose the other option is QE2 could expire and the Fed do nothing. That would be interesting also.
Excellent analysis as ever, very good point about development versus growth. The continuing obsession with GDP expansion being the root cause of both the current financial and the current Ecological difficulties and the principle obstacle to resolving both in the long term. Its time for a new set of measurements of success for nation states.
Post a Comment