Saturday, Nov 21, 2009

Apologies in advance but this one is for str2007

Marketthoughtsandanalysis.blogspot: Predictions for minor B

In the source link is the chart of how the Elliott wave "generally" sees things going forward. I.e. we are at or close to a P[rimary]2 second wave of 5 of the C wave - at cycle degree . STR2007said that he thought the next wave was supposed to be the most severe. It is but in terms of price not necessary slope. That then shows the end of the whole bear market at 2015 - 2016.
http://3.bp.blogspot.com/_OpWmYZm7O8I/SpbPUKkmKWI/AAAAAAAAAKw/POZLC_SPSBc/s1600-h/0binve-Dow-80-years-long-count.jpg for the big picture
http://3.bp.blogspot.com/_OpWmYZm7O8I/SwcAqtU7H2I/AAAAAAAABQE/n8P5_H2QC_8/s1600/0binve-001-202.png for a zoom in
and http://marketthoughtsandanalysis.blogspot.com/ for an explanation. The point is IF this theory is correct (and it might not be) then all assets will fall in value

Posted by techieman @ 09:19 AM (1316 views)
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16 Comments

1. techieman said...

... interesting thoughts on the deflation / inflation argument and also on the potential for Gold and the dollar.

Saturday, November 21, 2009 09:21AM Report Comment
 

2. techieman said...

for a prettier chart of the next moves - i.e. a down then a year end rally up to new highs into early 2010 before the bear kicks in see:

http://3.bp.blogspot.com/_TwUS3GyHKsQ/SwbqTp3oWXI/AAAAAAAACuI/tcrP_6XmgyU/s1600/spx1.png

Saturday, November 21, 2009 09:26AM Report Comment
 

3. will said...

Robert Prechter stated last week in an interview that he thought we would see the final low 'sometime next year'.

Saturday, November 21, 2009 09:33AM Report Comment
 

4. techieman said...

will really? I think he says 2010 will be a new low (below the mark of the beast on the S&Ps) but not THE low - thats more per the chart above.

Thats (final low) not what he says here : http://www.elliottwave.com/freeupdates/archives/2009/11/09/Video-Prechter-on-Tech-Ticker-Stocks-Are-Dangerous-Place-to-Be.aspx?code=cg

but i may have that wrong - do you have the link to the interview.... i would be interested , thanks!

Saturday, November 21, 2009 09:57AM Report Comment
 

5. techieman said...

btw str2007 - no im not Mr P!! I actually said i thought he was a little too early on both his "covering short" posting in late February (the low was early march) and also a bit early on his P2 peak - he said that in August. The ftse would look right with a final suck in to around the 5420 - 5500 level, but the top may already be in.

Saturday, November 21, 2009 10:05AM Report Comment
 

6. mountain goat said...

TM - "he thought the next wave was supposed to be the most severe. It is but in terms of price not necessary slope."

Don't 3rd waves need to show impulsive characteristics to be called a 3rd wave? So should be severe.

Saturday, November 21, 2009 12:16PM Report Comment
 

7. techieman said...

yes MG- a rule per Elliott is that the 3rd wave is "never the smallest and often the biggest". Ittends to either equality with wave 1 - or with the 1.618 ratio of it.if one wave extends then the other 2 impulse waves tend toward equality. etc.

so yes it should be the most servere but could take more time in a series of 1,2 s before we have the "3rd of the 3rd". which could be the third of the third of the third etc.

Saturday, November 21, 2009 12:34PM Report Comment
 

8. mountain goat said...

@TM what's your view on the rally so far starting with junk and ending with quality, blue chips and gold? That is what has happened so far so where will the rally in the above model come from? Any thoughts on a blow-off in gold and silver? (I haven't bought back in by the way, but might sell off my remaining coins if there is a price spike). PS popping out for a few hours now in case you expecting any replies.

Saturday, November 21, 2009 12:37PM Report Comment
 

9. techieman said...

MG - i was out all of yesterday. Maybe im being a bit thick but im not sure i understand the question. Where will the rally come from? I dont know which rally you mean. Basically we are in P2. When P2 ends (if it really is P2) is what has been exorcising my mind for quite some time.

I think the way the market keeps going (and i dont think it goes that far) is for mom and pop to be sucked in, in the US. As for Gold this is a pretty chart. The problem i have wih this count is i cant see it if the dollar rallies, so perhaps either the dollar has one more fall to come, which would bid up both the commodities and the stock market...... unless of course there is something else!!!

Sunday, November 22, 2009 10:09AM Report Comment
 

10. techieman said...

http://4.bp.blogspot.com/_TwUS3GyHKsQ/SwNSdyDTVVI/AAAAAAAACrg/2eIGOYO_o2M/s1600/gold.png

Sorry forgot to post it - its early still!!!

Sunday, November 22, 2009 10:10AM Report Comment
 

11. mountain goat said...

TM - thanks for the reply. My question was the short term model you posted here

http://3.bp.blogspot.com/_OpWmYZm7O8I/SwcAqtU7H2I/AAAAAAAABQE/n8P5_H2QC_8/s1600/0binve-001-202.png
and explained here
http://marketthoughtsandanalysis.blogspot.com/

it shows that we have another C wave push higher into December, whereas lots of technical measures seem exhausted, apart from gold which seems to be absorbing all the energy. Prechter doesn't expect a gold blowoff because he says this is a B wave, whereas a blowoff tends to happen in the 5th wave, but maybe he means a big blowoff like to $3000. Your other chart with a target at $1300 is more modest. One reason I expect a bit of a gold blowoff is because in the past few weeks it seems to rally when stocks fall. But it is all about the dollar of course, when it finds a bottom, gold will get hit badly. So I can imagine the following sequence of: stocks to start primary 3 soon, gold has a bit of a rally higher, then fear hits when stocks don't bounce, dollar rally's, terror strikes, stocks retest March low, gold sells off to $650 again.

Sunday, November 22, 2009 11:16AM Report Comment
 

12. techieman said...

MG - A look at this:

http://danericselliottwaves.blogspot.com/2009/11/e-minis_20.html - and particularly the 2nd chart - i.e. non blue chart.

both the one you referenced and this one (spx1) are saying the same thing. A low degree b wave (in green) of an abc(down) - which itself makes a B of an ABC up (in blue). The C in blue (up) should be the end of P2. That C would probably led some (more) bears to throw in the towel.

Of course the alternative is that the top is already in. For me the Footsie count looks like it has one more squeeze high - which would be consistent with the extra C high. If there is a C then the next question is where will that end - seasonally its hard to back against a year end rally (last year excepted). See http://seekingalpha.com/article/172692-are-we-setting-up-for-a-year-end-rally

As for the dollar he is saying a move up then a break in a diagonal triangle bottom to new lows before a larger degree rally. Of course prechter thinks the dollar has bottomed. So your potential sequence might work but then again others will too (which is why i dont really speculate on how this will happen and if its supported by the news).

The other thing i would say is that the first move down is rarely accompanied with news that brings that move down. Typically there will be a fall off the top which people then say - ah its just cause we got there too quick, so we are just consolidating before the next leg up.

the leg back up (i.e. wave 2 - it may be an abc or straight back up) starts and the bulls say i told you so. Thats when the set up is in place for the 3rd wave to hit. [sounds familiar re HPC?]

As i have said i am aware of these counts and have a short position on at the moment. It may very well go higher monday (b wave) but then hopefully the c of B kicks in. The real question then is will that be the most sensible place to launch the year end rally. I am GUESSING yes. It could be that the alternative P2 top is already in - as also shown on the charts. And thats the quandary isnt it. Do you liquidate near the bottom of the C or do you wait until the market tells you that the top still isnt in yet? Of course if we just carve through the prospective "C" then the odds are that the top is in. Thats what makes the whole thing interesting and frustrating though!

All in all these two sites look pretty good to me - particularly if you dont have a subcription to EW - what do you think MG??

Sunday, November 22, 2009 12:36PM Report Comment
 

13. mountain goat said...

TM - those sites look interesting but the very short term waves look messy to me and unconvincing in terms of labeling. The markets have struggled since the September high, volume is only high on the down days. So maybe as you say mom and pop are getting sucked in on the recoveries. Many indexes did not make new highs in November, like the Euro STOXX for example. So I think just looking at the blue chips is not giving the true picture (i.e. top is in). It all seems primed for a fall, almost waiting for the trigger. I am fully short STOXX and S&P already and fairly confident and patient even though the market is struggling along going higher. My shorts are a hedge against a fall in GBP as well, since they are priced in EURO and USD. My main fear here is counter party risk if the 3rd wave is as devastating as Prechter predicts, getting paid might be a problem.

Where I am getting trigger happy is with my gold and silver. Wondering whether to sell now and buy back lower in a few months, ahead of the seemingly inevitable one-way slide of the dollar in the years ahead. I agree with Prechter/EWI strongly about the dollar. Debts have to be paid so the dollar will rally near term. The next leg down will need to end some of the Wall Street/Fed/Washington incest, run-away-debt-is-ok mentality, because unless that is fixed the problem isn't fixed. By that I also mean the UK and Europe which look at the USA for leadership.

Anyway that is what I think!

Sunday, November 22, 2009 02:59PM Report Comment
 

14. techieman said...

MG - yes the shorter the term the more flexibility in terms of alternative counts. Quite a while back i was saying that i thought the top would be around the low to mid 5200s (ftse) . take a look at http://www.housepricecrash.co.uk/newsblog/2009/11/blog-stay-safe-boys-26273.php

number 10 in particular.

Sunday, November 22, 2009 06:08PM Report Comment
 

15. techieman said...

Basically i hope you are right, but my head tells me that people are not bullish enough yet. I think Mr P is generally right but his timing is always a bit too soon. If you are right we will be able to tell soon enough. Personally although i am short im not short in size, so i am not anticipating that the top is in. But one of the conditions of this is that most of the people are proved wrong!

Sunday, November 22, 2009 06:12PM Report Comment
 

16. mountain goat said...

TM - your comment 15 about people not bullish enough. The peak in bullishness was in October and seems to be on the wane even though the DOW has put in a good new high in November. As I said the S&P and FTSE new highs don't look convincing to me whereas STOXX and Japanese index (see prieur du plessis post today) for example did not even make new highs in November. So in terms of optimism I think October was it. At that time there was daily talk about green shoots, recession over, house price rises, the modern finance system triumphs again etc, whereas now in November there is a lot more realism, worries about withdrawal of stimulus, inflation, deflation etc. Sorry to keep banging on about gold, but that too is a sign that people are getting increasingly worried. So in my view the peak in optimism is past and it was "high enough" in October.

Sunday, November 22, 2009 06:59PM Report Comment
 

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