After reviewing the final charts we had a chance to get a better perspective on the recent activities in this market. We believe the NYSE and, to a lesser extent, the TRAN are illustrating the July downtrend has resumed.
Notice both indices have made new lows for their respective downtrends. This would suggest, in the SPX/DOW, that the past six weeks or so of choppy upward movement has been an Intermediate wave iv, and Int. v is underway now. The DOW chart has had this as an alternate count since the mid-August low.
We did some fibonacci work on the relationship between the waves and arrived with the following numbers: @ SPX 1093 Int. waves iii thru v = 2.618 Int. i, @ SPX 1080 Int. v = 0.618 Int. iii, @ SPX 1074 Int. v = 2.618 Int. i, and finally @ SPX 1060 this third wave (trend) down = 2.618 the first wave (trend) down. Since we have OEW pivots at 1090 and then 1058, we’re probably looking at either the SPX 1093 relationship or the 1060 relationship for the end of this Int. wave v and downtrend.
Unfortunately, while we did get oversold, even for a bear market, at the SPX 1102 low. We have not seen the total capitulation that usually occurs very close to the end of a bear market. This suggests the three waves down, thus far, can either be an ‘abc’ or a 1-2-3. All options are now again on the table. We’ll keep you informed. Best to your trading!
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
EURUSD Fibo…
http://astrofibo.blogspot.com/2011/10/eurusd-fibo.html
ASTRO Moon Cycle September-October 2011…
http://astrofibo.blogspot.com/2011/10/moon-cycle-september-october-2011.html
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Tony, if you have the time to comment on gold miners (eg GDX) as well. They seemed to have underperformed gold in 1H of 2011, then started to catch up from mid Jun’11. If i interpret the waves correctly, GDX seems to have formed a leading diagonal (wave 1) since the Jun’11 low, and today hit almost exactly at the 76% retracement and bounced. I’m expecting the miners to outperform gold in the next leg up though. Your views will be valuable
Lightbearer, We do not follow GDX directly but here is a chart:http://stockcharts.com/h-sc/ui?s=GDX:$GOLD&p=M&b=1&g=0&id=p11469772135Notice the miners have underperformed the metal since 2004.Part of it is probably due to the high cost of energy, and the other part ETF’s.After making a low in 2008 they outperformed again in 2009, only to roll over into 2011.We recently thought they may start outperforming again.But nearing the end of this month that has not happened.
Lee, would have expected a much stronger pullback then what we are getting as we speak, what say?
Not really ..after a day like yesterday I expected inside day chop and with todays globex low never being challenged I m thinking we go trade 1140 ish ESZ or 1146 SPX by the close but not going to happen for SPX.
But Vishal I didnt see us trading 1103 this week either
Nature if the beast I guess, can’t hold em tight anymore
This mkt has caught myself and maybe a few others by surprise
Hey T,
You are the master! I have been so tempted to jump into gold, but thank heaven I haven’t made the jump. I’m really looking foward to your weekend report as the global economy is throwing curveballs fast and furiously… need a good take on the forest… all I see are trees!
Thanks for your excellent analysis.
Tom
Hi TB, Out here in the midwest all I see is trees all around me.cheers!
If this mkt doesnt settle near it’s highs or new highs I’m totally lost.
I mean holding long over the weekend makes perfect sense right ?
If you plan on staying up all weekend watchng Bloomberg.
You’ll need a name change then … how about Just Again
What about that positive daily divergence in the DAX?
I think it played out Donna I can’t see any positive divergence right now
Donna, it generated at 10%+ rally but turned over again.
GLD
has 50% supp /52wk hi-lo/ @154.65…weekly TL @151ish and rsi(14) 30 at 154ish.
Thanks Tony. Have a good weekend all.
Tony I looked a couple hours ago and
saw Gold trading around 1634. Where
would your line in the sand be drawn before
you would think something is wrong here
and a bigger correction is coming?
Loonie, Our estimate was for just under $1650, as noted by the blue line that has been on this chart:http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=3&g=0&id=p60567956693&a=67199592We thought, since it was so strong, that $1650-$1700 was a reasonable target. Fibo relationships we noted yesterday: 50% $1701, and 61.8% $1648 … dipped just below the latter today.Next support is at the previous 2nd wave: $1590.
Thank you Tony
can’t wait for your weekend report!
Tony finally all asset classes collapsing in sync is this the final capitulation, hows OEW signals on the dollar index? Greenbacks are in demand
Vishal, Everything went down yesterday.Today only the metals are being sold.
What does that tell you Tony? TIA
FYI I am stilll short gold, silver, S&P, copper and the Euro. This is a deflationary spoiral and liquidity crisis IMHO
Kudos PA!
Hi Tony, is it possible to have a more detailed count posted on the NDX daily chart. I would really appreciate it. Thanks
M1, will look into it.
Thanks !!
Silver
ABC down…whats the confusion ?
It’s called a theory do ur own homework
They’re tearing Jim Cramer apart on Twitter about GC and SI and I guess NTFX
Guys I’m just pulling ur chains
I was 100% right about Silver taking out Mays low and I lost money being short too early
Haven’t touched it in 1 month. Hope u guys did well
Pre mature accumulation? Its a wild dog.
Some one big is getting hit . There’s some in desperate needs around the world.
Just guessing.
http://elite.finviz.com/publish.ashx?t=SLV&ty=c&ta=st_c,sch_200p,sma_10,sma2_200,sma_55,sma2_20,sar_0.02_0.2,rsi_a_5,stofu_a_5_5_3,macd_b_12_26_9,adx_b_12,cci_b_12&p=d&s=l
Hope you pup ok. My old timer has a issue. I’m really bummed.
Have a good weekend.
Hey Mike
Hes doing pretty good for a 16 1/2 year old basset
Ur pup has an issue ..that blows I absolutely love my bastard hound I think I know ur pain.
This is what they told me he had 3 years ago .Renal failure, Congestive heart failure, calcified or sponged disc in his lower back.
Agree lee your prophecy seems to be coming true $25. I am wondering when this would go back to $50.
S
Cup and handle forming intraday in NASDAQ?
http://www.wavegenius.com/2011/09/23/152pm-nasdaq-5-day-visual-vague-cup-and-handle-forming/
Tony if 2014 are intact , for people wanting to get in won’t levels of today be good levels or one should wait foe the dust to settle and allow it to form a base, should one catch this falling knife
Vishal, It’s cheap, but can get cheaper.
Yes tony but i guess the way indian markets reacted to a double top, getting past 1930 in the next 12 months for gold will be a herculean task but i wonder which asset class is better to buy on dips, silver nearing a C wave correction or SPX or Gold the ex lone bull in town, any thoughts tony????
Gold is money.Silver is a currency.It all depends what you want in this environment.
Wow I am wondering how many silver contracts would be closed due to margin calls.
Tony do you think we are the end of correction for silver or would it go to $22 based on
Sai
Sorry meant $26 right back to the price where this parabolic move started.
Sai
Hard to catch a falling knife
$40 to $30 in two days.We’ve seen that before
Can’t agree with you more. my predicament is more like getting squeezed under a stone. I am expecting a margin call any time now for my two 1000 ounce positions.
(:
Sa
Tony take a bow I am stunned into silence by your knowledge ,studies and patience, when newbees like us were frustrated by lack of fall in gold you replied to me a few days back that gold will fall during expiry, and see what we have got today,its pin drop accuracy from your end Thanx for everything, I m lucky to have found this blog of yours, if at times my posts look basic and stupid kindly pardon me
Tks Vishal, we just follow the characteristics of the markets.
Tony, sorry for my ignorance here, but you mentioned yesterday about options expiration related to gold next Tuesday (I assume you were talking about Sept. 27), but are not all options expiration of the 3rd Friday of every month? What were you referring to?
“Gold usually bottoms around options expiration (this tuesday). It has been in a correction since mid-August.”
blu
not all options expire on the same day—gold and silver options go off for sure on Tuesday
bob
Thanks Bob! I’m totally new to Ag/Au research; thanks for clarification!
Options on futures do not all expire the same time. Yes, tuesday the 27th
We hit my upward 4 targets on the nose in S&P and NASDAQ..now one final 5th down?
http://www.wavegenius.com/2011/09/23/1140am-nasdaq-visual-5-day-chart-1-2-3-4-before-a-5-down/
Futures trading hit 1102 on the SP 500 last night, basically testing the 1101 bottoms of August. Now at 1130 on the cash markets, its really a 28 point rally off the lows so far. That marked a 118 point drop over 5 fibonacci days, so a bounce is common from oversold conditions.
There is that gap at 1166 from yesterday’s open that would qualify for just over a 50% retracement of the 118 point decline.
One of the targets for wave 5 was a re-test of the lows, then 1088, then 1058 (Recently 1055-1062 pivots given out)
We have hit one of the major pivots now, so a bounce is normal.
With that said, the 5th wave down so far is about 46% and not quite 50% of the length of wave 3, which went from 1356 to 1101, or 255 points. 50% retracements are also common pivots.
So we have a congruence of the 1101 lows tested last night, a near 50% relationship of the wave 5 to wave 3… and a likely bounce.
Since this wave 5 I said would likely take the form of 3 or 5 waves , this looks like wave 2 up is underway from 1102 futures lows, but all the downside should not yet be done.
Hi Tony,
I know you have a lot of dedicated followers on this blog and I do appreciate all the work you put in to explain markets movements based on your OEW.
However, one must note that until the recent collapse of Thursday session, you were pretty adamant that the SP was going higher in a wave C to around 1260. Let’s not forget that it was the course of action you thought the most probable and thus your preferred count but the market proved you wrong.
That being said, you have well defined parameters that allow you to react quickly and adapt to market movements that go against your forecast which is a rare quality very few other ellioticians have.
I am quite puzzled though by your now preferred DOW count (which was your alternate up to now) when compared to the SPX. If you consider that the May 1st top is the top of Cycle wave 1, then we must be in Cycle wave 2 which should be an ABC structure (or a combination, but let’s keep it simple). This is what you show on the SPX count but on the DOW count, you show a 1,2,3,4 and currently wave 5 structure, which must therefore be composing Major Wave A. Why would we be in Intermediate V of Major A in the DOW and in Major C in the SPX ? What justifies the difference in wave degree ?
Best,
Hi Erkall, Yes, we were following the script of a B wave rally from 1121 to potentially 1260.We double topped at 1231 and then 1220.When the market broke the 1187 pivot we knew something was brewing.The next day showed us what it was.This is a bear market. Bear markets are volatile and prone to have failures.That’s why we had posted the DOW alternate count. Since this is the first major decline of the bear market we do not know if Primary wave A will be a five or a three.This is the reason for the two counts.
Tony,
I just wanted to follow up on these comments. A few days ago I suggested the possibility that what we were seeing could be a Major C failure/truncation and beginning the next phase (Primary C) of this bear market. Can we still leave open this scenario?
There are other reasons why I have suspected early Oct to be a MAJOR low and possibly end to Cycle 2, but will just leave it short and simple..
JaJa, that possibility is still alive.
If mkts behaved exactly as predicted.. It wud be so boring! Welcome to the only game in town which makes you look stupid 7 times out of 10. No other profession does that much damage to the psyche…blankfien may have been on to something when he said he was doing God’s work!
Tony, your update last night was much appreciated. The picture seems to be getting clearer. And it looks like we’re getting a better entry point for going long in silver (finally!). Still trying to determine where we’re headed with BSE–but surely that will become clearer in due course of time. Also want to echo CanadianLoonie’s well expressed words of appreciation.
“last night”, meaning this update here which you posted last night…
BDKROO, just trying to help.Markets should signal when these downtrends are over.
Patiently watching. David Morgan also gave a heads up that the floor (in metals) can get taken out when metals drop and then potential buyers offering a floor of support cancel their orders. Content to wait and see, but your comment about Tuesday Options day was of interest. I’m particularly impressed that back when gold was supposed to correct and wasn’t really dropping much, you continued to hold out for the possibility of a correction lasting into late Sept/early Oct. That was a good call. Patrick M has done a great job with his counts.
Thanks Tony, for your reply yesterday regarding gold & silver moves. I’m very surprised today silver dropped another 9% (so far) to almost the low in mid-May. We may be still in major 4 towards $27?
As for gold, i’m also entertaining the thought of what hooloo1957 just mentioned, a major 4 started in late-August and still unfolding. Silver normally leads gold in wave structures, and this syncs well. What are your thoughts on this?
No change on Gold.Still expecting $1650-$1700
Thanks Tony! We’re in the range now
http://wimp.com/dextertheme/
suitable music for the market……and investors??
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Tony if we bounce do you see us going any higher than 1145-50 before next wave down?
Pooch, That was support, now resistance
Thanks Tony just double checking
Hi Tony: The recent STORMM indicators (http://hgpolites3.wordpress.com/) have aligned well with Objective Elliot Wave in calling major turns in the SP500. Only the degree of OEW waves differs among these calls and the current sell signal aligns with the OEW alternate DOW interpretation.
■May 2nd STORMM sell signal aligned with the start of OEW wave 1 down
■Jun 13 buy signal aligned with the end of wave 1 and the start of wave 2 up
■July 26th sell signal aligned with the end of wave 2 and the start of wave 3 down
■August 24 buy signal aligned with the end of wave 3 and the start of wave 4 up
■September 20th sell signal aligned with the end of wave 4 and the state of wave 5 down
In our blog, chart 0002 clearly shows that the 5 wave ABCDE triangle has completed with a truncated wave E and today’s price action clearly broke the lower trend line on higher volume (another clear sell or short signal from the O’Neil strategy for shorting stocks).
Chart 0004 of the ongoing head and shoulders formation also shows this break down on higher volume and the pennant formation of the ABCDE triangle has a flag pole of approximately 240 points which projects a downside target int he SP925 area. How does this align with OEW support levels or retracement limits?
Cheers, Greg
hey tony i kinda like the recent hi in gold as end of major 3 and now a multimonth retracement to the feb low at 1300….that would set us up good for the final wave…just my two cents…..thanks for your tremendous work, greg
Thanks Tony.