Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19
Palladium, Darling of the PGEs, Shifting into High Gear - 13th April 19
MMT is a spectacularly Dem idea - 13th April 19
The 'Silver Lines' of Opportunity - 13th April 19
Gold Stocks Bull Market Breakout Potential - 13th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stock Market Update: Blemishes on the Bears' Elliott Wave Count

Stock-Markets / Elliott Wave Theory Feb 17, 2008 - 09:15 PM GMT

By: Dominick

Stock-Markets Another week is now history and the bear case is looking worse for it. Not that the market can't go down from here, but if it does, it won't be the impulsive 3 rd wave for which so many have been waiting and waiting and waiting.


Readers will remember I've never been completely convinced the October high is THE top in this market, though for a few months now it's been practically gospel that it is. The market has yet to commit to one direction or the other, but the chart below shows the bullish and bearish cases and why unbiased Elliott wave analysis has to have at least serious doubts about the bear count.

First, the move from the August low to the October high has the look of a three-wave advance, and impulses do not end in three-wave moves. Then, wave i of wave 3 in the bear case, starting on December 11 , also appears to be three-waves on a 60-minute timeframe, making an impulse down problematic.

On the other hand, the bulls may have a perfect w-x-y correction complete from the October highs to the January lows, our 1256 target. We can even allow for another slight new low being made without invalidating the bull count, but, while bull count remains intact, my rally to new highs is a distinct possibility.

Stocks reached an important juncture at the end of January and have been struggling to dictate the wave count ever since. The break of the large triangle from the summer '07 highs signaled a down turn in the market and actually foreshadowed the massive SocGen related selling in January. It's hard to blame anyone that shorted that hole, since it did resemble a real breakdown.

But TTC did not fall for it – in fact, we bought the exact bottom and have been trading our proprietary targets ever since. We continue to see exponential growth in our membership, to the extent that we will probably be forced to close our doors to new members this year, precisely because we do not color our analysis with bias, or manipulate our counts to match our favored outcomes. Unfortunately, too much of the analysis community fails to live up to this basic standard and Elliott wave analysis has lost the prestige it once had as a result.

Simply put, as an Elliott wave purist, it's impossible for me to ignore the faults in the bear case shown above. This unbiased view has allowed TTC members to respect the indecisive nature of the current environment and participate on both sides of the market.

Looking ahead my view against the bear case is corroborated by extremely bearish sentiment on the Street, which would tend to prevent huge declines, and the DJ Transports, which have now rallied off of a three-wave decline, suggesting impulsiveness to the upside. But I'm not suddenly now going to rest on my laurels or marry a particular outlook. Next week we'll be looking for the market to verify our analysis early in the week with a Tuesday or Wednesday rally, or else we continue to slide sideways or down.

Seeing this week close near our 1352 target makes that work even easier next week: either we gap above or trade above that level to confirm a more long term bullish outlook or we don't. Getting below 1308 would begin to raise serious questions about current count, but even if the market does move lower, it will not be in the impulsive bear case shown above, which so much of the web's analysts have clung to week after week against all reason. And ultimately, even if we are moving lower, having the correct chart will eventually make all the difference for the future moves.

Don't forget to join now before we close membership to new retail traders.

Have a profitable and safe week trading, and remember:
"Unbiased Elliott Wave works!"

By Dominick , a.k.a. Spwaver
www.tradingthecharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual. Check with your licensed financial advisor or broker prior to taking any action.

Dominick Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules