3SOF

H&S Top in the NASDAQ Composite completed yesterday afternoon.  It struggled most of the afternoon to regain the broken neckline, failed to do it, and closed at 2110.  Thud.

Curses! 

I was too disgusted to try to calculate the downside target IN PLAY, but it's something like 2085-2090, so as of the close, there's the suggestion that we might go back and fill that gap on the chart.

Quote from: Melf Elf on June 20, 2006, 04:28:15 AM
H&S Top in the NASDAQ Composite completed yesterday afternoon.  It struggled most of the afternoon to regain the broken neckline, failed to do it, and closed at 2110.  Thud.

We had a rally in the early going to resistance at 2115, the broken neckline of the H&S Top, failed that re-test, and now have gone red, currently down to 2109.

 

The NDX so far is hanging onto the bottom rail of the channe, though.

Possible BULLISH Inverse H&S if the COMPX can take out the neckline at 2127.  The NDX has held at the bottom of the channel so far today.

Overall, this bottoming process is looking constructive for a rally, as long as we don't do any more technical damage.   

Hello Melf The market hasn't been easy for sure...

Trying to get some sense from the latest sessions on the NDX daily charts, I see the descendent resistance as the possible trigger needed for the upside continuation (by this I mean, for example a close above 1560 tomorrow, the confirmation would be printing 1576 or above). This resistance was touched last Thursday and has been forcing the NDX down since then.

On the other hand, the long term support is still holding, and we don't want to see it crossed bellow (although with the current volatility it would be normal even on a bullish scenario). The real confirmation for a bearish scenario would be new lows below last week sell off.

Volatility, indecision, erratic moves is what we have now...  I must confess this is one of the most difficult analytical situations I've had faced for many years...

Regards,

Quote from: Ramsburg on June 21, 2006, 12:34:18 AM
Trying to get some sense from the latest sessions on the NDX daily charts, I see the descendent resistance as the possible trigger needed for the upside continuation (by this I mean, for example a close above 1560 tomorrow, the confirmation would be printing 1576 or above). This resistance was touched last Thursday and has been forcing the NDX down since then.

Frederick,

Yesterday was a Bullish Doji Star Hammer, the low of which (1544.30) was just about smack on the bottom of the channel.  If this has been a 3-day consolidation of last Thursday's big gain, and also a re-test of the bottom of the channel which so far is successful, that looks fine, as long as we move higher and take out your 1576. 

Quote
Volatility, indecision, erratic moves is what we have now...  I must confess this is one of the most difficult analytical situations I've had faced for many years...

I think we all did a very good job seeing the May 11-12 breakdown in this and the QQQQ folder.  We need a "group applause" button.

   

I'm having difficulty recently, though, trying to figure out if we just made a very tradeable low, like in October, or if we need to put on our crash helmets (looks ugly if we break NDX 1511-1515).

I had this same difficulty at last October's low, and so far, the NDX is acting similar with the recent break of support, and this week's re-test of the bottom of the channel, which so far, is holding.

In October, in the NASDAQ Composite, it looked pretty bearish (chart below):

1. We broke a channel
2. We broke horizontal support
3. We failed on the first attempt to regain the channel

All of those were BEAR TRAPS!

In late October, the COMPX finally held a re-test of the bottom of the channel, then it went on an upside screamer to Calven's Bullish Wolfe Wave target.

But, those Bear Traps made it tough to figure out for awhile, and that's a bit like what we're seeing now.  Erratic, indecisive, volatile trading, as you say.

A H&S Top on the 10-minute COMPX chart...the "morphed" (changed) into a BULLISH Inverse H&S pattern yesterday...but, it didn't take out the 2127 neckline, and it sold off again to 2107...

A lot of "false starts." Frustrating!     

BTW, if I understood fous correctly (please confirm if you read this, fous), we got the bullish "Hound of the Baskervilles" signal on Monday (June 19).  I'll post that next.

Bullish "Hound of the Baskervilles" signal, or just another annoying, yappy puppy?

"Elementary, my dear Watson!"  Easy for Sherlock Holmes to say... 

In either case,  I think we've got...



WOOF!...WOOF!....WOOF!

Quote from: Melf Elf on June 21, 2006, 03:36:24 AM
Frederick,

Yesterday was a Bullish Doji Star Hammer, the low of which (1544.30) was just about smack on the bottom of the channel.  If this has been a 3-day consolidation of last Thursday's big gain, and also a re-test of the bottom of the channel which so far is successful, that looks fine, as long as we move higher and take out your 1576. 

So far, that scenario is playing out nicely.  We've been trading steadily above Frederick's 1576.

If we can hold these gains today, allowing for some backing and filling, this nice action ought to get us at least to that 1628-1635 resistance area.

Quote
BTW, if I understood fous correctly (please confirm if you read this, fous), we got the bullish "Hound of the Baskervilles" signal on Monday (June 19).   I'll post that next.

Love that doggy! 




WOOF!...WOOF!...WOOF!...

$COMPX, $NDX, and $NDX and $DJI ALL forming a Bullish Rising Three Methods continuation pattern today.  Usually most helpful in indicating the continuation of a bullish trend, though clearly for us that is only just getting started a week ago, so I dont know how to interpret it fully.

However, if the volume is strong by end of day, I believe this may be the follow through day the market needed to be a confirmed rally.  If nothing else, it would be nice if this harkened even a flat market for awhile, because I think we can all still make money in that, just somebody please stop those bears!

Hey guys,

first applaud to all for your outstanding work. Second I want to share something I received today. it's about Elliot Wave Theory and we talking about long term. Since I only know the basis of Elliot Wave  I can't comment that statement but I'm sure there are people here who can and maybe will give their opinion  .


Here is the statement :

[/b]


Despite the optimism expressed by US Federal Reserve Chairman Ben Bernanke, the markets' exuberant response will not last.

Yes, we might have a bit more oomph left in the hot air balloon of Fed-hyped expectations, but the larger picture is not pretty and you'd better buckle up and hold on to your seats.

A severe decline is on the horizon.

Employing the power of the Refined Elliott Trader, the most significant advance in Elliott Wave Theory in over 70 years, here's how we see the six most widely traded currencies and three major US indexes shaping up.

Our analysts at Elliottician.Com caution that the markets could be choppy for a little longer, perhaps until 29th of this month, when another US Fed rate announcement is due.

Over the next few months, maybe the next year, we expect a very bearish outlook for the Dow with significant potential to drop well below 10,000, perhaps, in worst-case-scenario, to nearly half that.

Quote from: tokyopua on June 21, 2006, 02:29:12 PM
However, if the volume is strong by end of day,

tokyopua,

Yeah, Art Cashin (sp?) just was on CNBC, talking about the low volume.  He said, "We need players to vote with their wallets, to have a good election."  I like that, and I agree.

Quote
I believe this may be the follow through day the market needed to be a confirmed rally.

So far, the break of the channel...Thursday's rally...the selloff that successfully re-tested the bottom of the broken channel yesterday...and, today's upside follow-thru rally all smacks of a Bear Trap short-squeeze today.

Short-term, a lot of downside targets in stocks MADE, and the Bears risked "staying too long at the fair," not covering.  Bullish sentiment currently is the lowest since the major October, 2002 low, so that's also supportive of more rally.  

QuoteIf nothing else, it would be nice if this harkened even a flat market for awhile, because I think we can all still make money in that, just somebody please stop those bears!

Agreed.  Some money on the upside can be made here even in a flat market.

What I'd like to see is something like:

1. More follow-thru to that 1628-1635 resistance area with good volume coming in,
2. Not too much give-back
3. A Right Shoulder of a Bullish Inverse H&S with the neckline at that 1628-1635, per the arrows on the chart below.  

That would give us a more sustainable summer rally.

That's getting well ahead of ourselves, of course, but we want to try to anticipate some kind of scenario that we would need to negate the current bearish-looking chart in what also normally is a bearish phase of the 4-year cycle.

 

"There must be some way out of here." said the joker to the thief. - Bob Dylan "All Along The Watchtower

 

EDIT: Sorry, I label my shoulders backwards in the chart.  Dummy. 

Quote from: Jimbo on June 21, 2006, 02:58:40 PM

Hey guys,

first applaud to all for your outstanding work. Second I want to share something I received today. it's about Elliot Wave Theory and we talking about long term. Since I only know the basis of Elliot Wave  I can't comment that statement but I'm sure there are people here who can and maybe will give their opinion  .


Here is the statement :

Elliottician Alert: Buckle Up

[/b]


Despite the optimism expressed by US Federal Reserve Chairman Ben Bernanke, the markets' exuberant response will not last.

Yes, we might have a bit more oomph left in the hot air balloon of Fed-hyped expectations, but the larger picture is not pretty and you'd better buckle up and hold on to your seats.

A severe decline is on the horizon.

Employing the power of the Refined Elliott Trader, the most significant advance in Elliott Wave Theory in over 70 years, here's how we see the six most widely traded currencies and three major US indexes shaping up.

Our analysts at Elliottician.Com caution that the markets could be choppy for a little longer, perhaps until 29th of this month, when another US Fed rate announcement is due.

Over the next few months, maybe the next year, we expect a very bearish outlook for the Dow with significant potential to drop well below 10,000, perhaps, in worst-case-scenario, to nearly half that.

Jimbo,

Thanks for the sobering alert, its good to think about both sides.  I dont know much at all about Elliot Wave theory, but I am curious to know if you have some sort of a subscription to these alerts, and if so, did they predict the current decline before May 11th?  

I ask in part because I recall seeing an Elliot Wave prognostication of major bear market activity that was supposed to begin with a crash on October 31st last year.  This article was featured a few days before that on the main page of investors.com and had me pretty worried back then, though it never panned out.  

That said, with the way things have happened recently, I am quite willing to listen to the bearish case, whatever the source.  Hope somebody here knows more about Elliot Wave theory and can offer and educated opinion, as I cannot.

Quote from: Jimbo on June 21, 2006, 02:58:40 PM
Since I only know the basis of Elliot Wave  I can't comment that statement but I'm sure there are people here who can and maybe will give their opinion 

Hey, Jimbo!

I have only a rudimentary understanding of Elliott Wave Theory as well, but those guys, as a group, have lost a lot of credibility with me over the years.  That's unfair of me to lump them all together, and I don't, but I mean "as a group."

As I remember, led by Robert Prechter, they came into prominence making a good bear call on the 1987 crash.  For many years after that, it seemed that EVERY interpreation of the market was bearish, bearish and MORE bearish, and incorrectly so.

Most indices have scored new all-time highs over the years.  But, the NDX, as I mentioned earlier in this thread,  barely has had  a 23.6% retracement of its 83%  2000-2002 decline.  The Elliott Wave crowd seems to like to point to that kind of exception to justify their bearishness, rather than consider how well the general market has done over the years.

Again, that's unfair of me to a degree, but I've run into a number of those guys who have seemed determined to have Bear Markets.  Did you ever know anyone like that?  That clings to anything that supports their opinion, no matter how much evidence there is to the contrary? 

That's just overall impression.  I'm not real fond of Elliott Wave Theory, obviously.  It seems like a very tortured way of analyzing the market.  A lot of "re-labeling" of the waves to support one's biased point of view, if you know what I mean.

In fairness, I'm sure that there are some good E-Wave analysts out there, and the guy you quoted certainly could be one of them.  If you follow him (or anyone else) try to observe how objective they seem.

One guy I read for a long time would write things like, "I can't wait to see the Bulls get totally screwed, like they deserve!  This market is going to CRASH..CRASH..CRASH!"

Um-mm.mm...having a problem with objectivity?     

There seems always to be dire, crash predicitons.  Frankly, I've wondered if a lot of those guys are chronically depressed.

Just my opinion, of course.

Quote from: tokyopua on June 21, 2006, 02:29:12 PM
$COMPX, $NDX, and $NDX and $DJI ALL forming a Bullish Rising Three Methods continuation pattern today.  Usually most helpful in indicating the continuation of a bullish trend, though clearly for us that is only just getting started a week ago, so I dont know how to interpret it fully.

However, if the volume is strong by end of day, I believe this may be the follow through day the market needed to be a confirmed rally.  If nothing else, it would be nice if this harkened even a flat market for awhile, because I think we can all still make money in that, just somebody please stop those bears!

Um, like Melf Elf said they were saying on CNBC, volume just wasnt big enough today to make this the follow through day.  IBD Big Picture analysis today also said there wasnt enough volume.  And the Bullish Rising Three Methods patterns I was talking about look kind of weak now at the end of the day because of the sellers that came in and reduced the size of the todays candlestick.  Ugh...

Quote from: tokyopua on June 21, 2006, 03:16:50 PM
Thanks for the sobering alert, its good to think about both sides.  I don't know much at all about Elliot Wave theory, but I am curious to know if you have some sort of a subscription to these alerts, and if so, did they predict the current decline before May 11th? 

Tokyopua,

I'm sorry for my late reply but I was away. No, I don't have a subscription to these alerts and I can't say anything about previous predictions. It was a friend of mine who sent it to me as an interesting reading. I thought it's good idea to share a different opinion. Although I don't think we'll see a dip well bellow 10.000 on the Dow I believe we're not done going south. IMHO

Quote from: Melf Elf on June 21, 2006, 03:39:42 PM
That's just overall impression.  I'm not real fond of Elliott Wave Theory, obviously.  It seems like a very tortured way of analyzing the market.  A lot of "re-labeling" of the waves to support one's biased point of view, if you know what I mean.

Melf Elf,

you are absolutely right. A second your opinion as I tried labeling and counting the wave before and every time there was someone else ( more experienced of course ) with a different point of view. One thing I like about Elliot theory though is identifying the impulse and corrective waves. It really helps a lot when combined with other technical analysis like the ones you're doing. The higher the probability the better for proving you are right. Just my 2 cents.

Basis the weekly chart (this is a daily chart), the bottom rail of the channel came in last week at 1544.85.  Friday's low was 1544.11, and the daily candle was a Bullish Doji Star Hammer.  Not much upside follow-thru today, but the NDX is hanging on.  As long as it does, I think we've got a decent chance for a rally to that 1630-ish resistance, at least.

We have to raise the bar for this week for the bottom of the channel, to 1547.35.  The NDX currently is at 1555.

Quote from: Jimbo on June 24, 2006, 02:15:18 PM
  One thing I like about Elliot theory though is identifying the impulse and corrective waves. It really helps a lot when combined with other technical analysis like the ones you're doing. The higher the probability the better for proving you are right. Just my 2 cents.

Jimbo,

Yeah, it's especially nice if you can correctly identify a Wave 3.  Those usually are the strongest moves, as you know.