Low amount post christmas. The tape got squeezed for all it was value.
SPY chart informs the story: Its the story of spaces.
At the 50% Fib of the total decline
The marketplace is surprisingly close to causing the 3rd Zweig Breadth Thrust because the 2009 low. The additional 2 are highlighted inside Blue. These were “kickoff” thrusts of main legs up. If another triggers, there is an good chance of fresh marketplace highs above 1474 SPX. I don’t create these rules people, the marketplace does.
We’ll see how Monday shakes out. The marketplace is extremely brief expression overbought because it happens to be.
But the VIX bear signal has been caused. Close back inside the BB.
Daneric’s Elliott Waves
Previously on the blog, I provided monthly statistics for gaps (fades and unfilled gaps) and I wanted to return to that quick research on monthly gap statistics.
Here are the Gap Numbers – filled and unfilled – for October 2012:
Using Excel from Yahoo Finance data for the SPY, we see that the month of October gave us 16 of 22 trading days with an overnight gap of at least $ 0.20 in the SPY (about 2 points in the @ES).
I use a 20 cent filter which accounts for small variations from one trading session to the next (that way all days do not show gaps of a few pennies).
In fact, the average UP-side gap was 54 cents and the average DOWN-side gap was 40 cents.
With regard to the actual gaps and fills, October provided 11 upside gaps and 7 of those gaps (63.64%) were filled in the same trading session.
There were five downside gaps and only two (40%) of those gap-days filled.
Keep in mind October was a down-month that saw the indexes reverse into a short-term downtrend:
The chart above shows the upside (green) and downside (red) gap sessions (greater than 20 cents) while the highlighted region emphasizes the larger gaps.
In general, large opening gaps that do NOT fade tend to be precursors for the remainder of the session developing into an intraday trend day.
However, there were two sessions that opened with a gap near $ 1.00 that filled the same day (October 5th and 25th), and both were large upside gaps.
No large downside gap was filled (October 8th, 19th, and 23rd).
Smaller gaps tend to fill the same day and may be precursors for intraday Range Days.
Continue checking back for similar monthly gap-data posts at the start of each new month.
Corey Rosenbloom, CMT
Afraid to Trade.com
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Count remains downward inside way. Primary count is the fact that Minor 1 is continuing its journey.
Sentiment: Obviously this information is a some days older (14 November it came out) nevertheless the newest Investor’s Intelligence information bear % is not extreme. In fact its nonetheless elevated found on the bullish side:
Daneric’s Elliott Waves
Wave labeling color code because follows (note – [brackets] selected inside lieu of circles for efficiency sake) :
Grand Supercycle – BLUE – [I] [II] [III] [IV] [V] – [a] [b] [c]
Supercycle – GREEN – (I) (II) (III) (IV) (V) – (a) (b) (c)
Cycle – PINK – I II III IV V – a b c
Primary – BLACK – [1] [2] [3] [4] [5] – [A] [B] [C]
Intermediate – RED – (1) (2) (3) (4) (5) – (A) (B) (C)
Minor – BLUE – 1 2 3 4 5 – A B C
Minute – GREEN – [i] [ii][iii] [iv] [v] – [a] [b] [c]
Minuette – PINK – (i) (ii)(iii) (iv) (v) – (a) (b) (c)
Subminuette – BLACK – i ii iii iv v – a b c
Micro – RED – [1] [2] [3] [4] [5] – [A] [B] [C]
Submicro – BLUE – (1) (2) (3) (4) (5) – (A) (B) (C)
Miniscule – GREEN – 1 2 3 4 5 – A B C
Daneric’s Elliott Waves
I wouldn’t be amazed when the marketplace takes a shot at regaining 1400 resistance however, it doesn’t need to. If it did, it might nevertheless fit the series of 1′s plus 2′s because the 3rd wave 2 before the bottom drops out inside a “3rd of the third” wave down.
Primary count is a series of one’s plus two’s. The Breadth Thrust signal shown found on the DJIA chart below supports this count.
Yet the DJIA count can be recommending a jump of bigger size plus maybe length. Needless to say when (ii) turns out to be a truncated top (because EWI suggest), then this count is out completely. Could be a red herring.
And the Nasdaq100 count will recommend anything else again. However because good because this count is, its nothing to hang a hat about because its just a subindex.
Yet cost action is not inside the bulls favor. This Wilshire channel chart shows what I mean:
And total, the favorite Breadth Thrust Indicator is not yet oversold neither is there any positive divergence recommending a rebound. This signal favors the main count of the series of 1′s plus 2′s as well as the marketplace has not very yet had its “3rd of the third” wave.
Doesn’t signify costs won’t rebound, its only suggesting which this signal is not flashing a bull signal neither is it oversold plus, inside theory, could agree with all the series of ones plus twos down.
Additionally be aware of the lower wedgeline break.
Daneric’s Elliott Waves
Two good extended flats (maybe best counted because a nested series of one’s plus two’s down) inside a row is where the marketplace stands:
Exhausted marketplace? Building up the stamina to finally break beneath Super Mario day? The daily SPX candles shows which QEternity Day as well as the 50 DMA was strong resistance now plus brought out thick marketing.
Also the lower wedgeline is close again.
Daneric’s Elliott Waves
Over the last four years or so, this blog has been presenting you with Elliott Wave Analysis of various instruments in a variety of markets. I have shared with you veritably a treasure trove of information, and have spent countless hours answering innumerable questions from young and experienced traders alike. All this went on despite having the responsibility of running the treasury of a bank. Whether I was at an airport waiting to board a flight, or by the seaside with my kids, I cared enough to give you freely of my time. So it was a great pleasure to see the spontaneous response from readers when I finally launched a paid service where I will share my trade ideas. Thank you very much. Some of you might be disappointed because I have pitched the price relatively high. I did that for a reason. I really wish to keep the number of members there manageable. Secondly, that service is meant for traders who are willing to be patient for the right kind of set ups. There is a bunch of people out there dishing out trading advice every day, and sometimes several times a day for much less. I don’t belong there, neither do members of our exclusive club. Having said all this, I wish to reassure you that this blog will continue to stay alive, because I have promised you that this is a ‘living book’ – an extension of “Five Waves to Financial Freedom”. However, you won’t find as many updates as before because of increasing demands at work and elsewhere for my time. 
For many weeks now there have been numerous requests for Elliott Wave Analysis of India’s stock indices. Following the recent flash crash on the Nifty, that chart is screwed up. The exchange has refused to fix the price, even though the trades were cancelled. So I am turning my attention to the Sensex index. There are some interesting things to be noted in the following six charts. I would urge you to study each one of them carefully and see if you can follow how I think about these patterns. I don’t exclude anything. I approach the markets with an open mind, always aware that I could be wrong. I start off with an idea, a hypothesis. I look for additional clues that validate the hypothesis, and then decide where to get into the market. In this blog, I have repeatedly said that I am not offering any trading advice. You come here only to learn. Yet, the hypotheses are there, and if you were alert enough, you could have taken numerous low-risk trades that turned out to be extremely profitable. True, some ideas turned out to be wrong. But that risk is always there. A sound knowledge of Elliott Waves would allow you to choose very low risk entry points and this is why so many of you are attracted to learn it. Enough! Time to look at the charts. As always, there is more on the chart than here. Enjoy and share with others. Ramki.
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E-minis, all-hours, might show 5 waves down within the latest peak. Forms well inside a channel. This might imply a jump is due. Pretty good triangle for wave iv plus yes wave v did hardly create a lower low.
Squiggle count is again challenging. The excellent TRIN readings recorded past worked off the extreme oversold now inspite of the total down day. That can be a alert signal which factors might receive ugly for costs. If oversold gets worked off inside a decline, the odds of more decline heighten.
Again the point here is the fact that when this might be a 3rd wave, along with a increasing bearish wedge is resolving to the drawback, selecting subwave bounces is downright maddening. We have watched several nasty waterfall declines inside the previous several years. The 2010 flash crash as well as the 2011 summer declines are 2 cases.
Daneric’s Elliott Waves
Prices have today solidly shut beneath “QEternity” day plus solidly shut below the 50 DMA. There was better drawback marketing stress now than Friday.
Squiggle count gets challenging. Due for a big jump? We are not oversold which much about any scale thus its not required. But there is a big SPY gap down produced by today’s open plus which presents a good bull brief expression target.
New resistance is “QE3 DAY”. This really is where costs might probably test when they bounce.
BEST BULL COUNT:
The right bull count is the fact that now – or soon tomorrow – you have finally enjoyed the Minor wave 4 low. This count does have anything choosing it because costs finally overlapped with all the past subwave [iv] of 3 that is expected to arise about a final wave four.
DISCUSSION OF THE RISING BEARISH WEDGE:
Looking back over the previous 2+ years, you have a increasing contracting wedge. Its there, it may be considered completed plus you will ponder the next cost action which will or could not instantly come. Bearish increasing wedges (if thats exactly what it turns out to be) solve inside actually just 1 manner: Prices collapse.
It was discussed a when back inside a post found on the potential wave plus technical factors why costs collapse thus fast. The wave cause is the fact that the waves are tired plus no longer sport impulsing patterns up. That has been the case whenever lookin at the entire wave picture because which 1010 SPX pivot low of the several years back. Even the subwave moves sport ugliness. Note the waves because the June low – fairly ugly plus which is beneficial inside determining a reduction of impulsiveness (overall) can be waning.
Technical factors of support/resistance are more complex inside a wedge when costs go down. Just place, there are no clear-cut “buy-this-level/pivot/trendline, etc.” From a horizontal standpoint help is muddled by all overlapping cost action of the previous 2 years produced by the wedge. From a pivot level, the pivots are muddled for the same cause. And because the wedge has converging trendlines, the lower trendline is coming up fast, thus which doesn’t absolutely provide a lot of hope. In truth the lower trendline normally gets smashed proper though So there is not a several set of trendlines dangling available to ride help about.
For these factors, 1 could imagine which “stops”, real or mental, are diffused throughout the whole budget of the built wedge. The extended slow cost task of building the wedge equally creates a sense of “solidness” throughout. In fact, a increasing bearish wedge is anything however strong underneath. So all it will take is costs to commence hitting the stop points plus to commence filling those open SPY spaces along with a cascade of dropping costs will happen.
In truth costs generally decline deeper than where the wedge began. So eventually sub 1000 SPX will be the cost target of the wedge which resolves bearishly. And imagine all of the stops at 1000 SPX….
DJIA shows the count because a double zigzag because another method to count because the 2009 low. Even though this really is shown inside a different count, note which like the SPX above, it counts almost complete plus also sports a increasing wedge inside costs.
CONCLUSION:
1. The increasing wedge should be respected for exactly what it is: A possible lethal bear event waiting to result (resolving the wedge).
2. Wave-wise, a wedge shows reduction of total impulsiveness plus fatigue. In this case the fatigue is about a scale not enjoyed – over 2 years inside the generating! For this cause, you lose sight of the woodland which the SPX can be caught inside.
3. Technical-wise, resolving a bearish wedge with a cascade of fast dropping costs makes ideal sense. With no trendline help, no well-defined horizontal help plus ambiguous pivots, stops are littered throughout the whole budget of 1000 to 1400 SPX. There are a great deal of open SPY spaces which definitely hold clusters of stops. Once downside momentum is built, a cost panic could arise immediately.
So usually the pattern solve to the drawback inside these a way because I have described? So far, thus superior. We have costs trying plus dropping away within the upper wedgeline plus thats where its all begins.
All I am suggesting is the fact that I regard the possible of the increasing bearish wedge, very this size. The bearish potential of resolving with a fast cost collapse is extremely real plus of high odds than at any different time or cost pattern.
Daneric’s Elliott Waves
This chart of the e-minis, all-hours, doesn’t resemble a Minute [ii] of Minor 5 pullback. The selloff now was very bearish plus inflicted several technical damage. So the evidence which the marketplace has topped looks sturdy from today’s cost action. Yet you nonetheless need the lower low
The NDX is leading the means plus effectively under its earlier 2012 significant. The NASDAQ100 did deliver a lower low.
The increasing wedge. Having a difficult time with all the upper wedgeline.
The ideal bearish count is the fact that a wave (ii) extended flat happened plus you are today inside a wave (iii) down. If this might be the case, costs are going much much lower. Note the significant down amount ratio, etc. This really is consistent with a wave (iii).
Wilshire 60 within the viewpoint which the marketplace has topped. However carrying help because of the finish nowadays.
And inspite of the $ 100 selloff of Apple it is very still overbought about a monthly scale.
Composite extended expression. Technicals resemble there are running from momentum.
Daneric’s Elliott Waves
