the ELLIOTT WAVE lives on
Market analysis using proprietary Objective Elliott Wave techniques
April 04
weekend update
REVIEW
G-20 concludes with the announcement of the New World Order. For decades western governments denied the existence, the agenda, and the goal of creating a one world government. The debunkers have been silenced and the so called "conspiracy nuts" have been spot on. The NWO has been announced and their agenda will be unfolding in the months and years ahead. The time has arrived to get informed, declare your free will and empower yourself. This week economic reports continued to display declines but at a slowing rate of descent. Case-Shiller reported housing prices have declined 19% over the past twelve months, and the Unemployment rate is now at 8.5%. For the week the SPX/DOW were +3.2%, the NDX/NAZ +5.1%, Asian markets +2.1%, Europe +3.9% and Commodity equities +4.4%.
LONG TERM: bear market
There has been some discussion about the wave structure of the bear market, thus far, from the October 2007 high. We can assure you that it has not been a completed five-wave decline. OEW quantifies every significant wave as it unfolds. The decline, thus far, has been two sets of five waves. The first set of five concluded in Mar 08. There was a counter rally into May 08, and then another set of five waves into the March 2009 low. Naturally this could be counted as a 1-2-3 decline, with waves 4 and 5 yet to come. That scenario does have some possibilities. If it were to unfold this way it would then suggest a much larger bear market. Since bear markets are three-wave events, and not five. A five-wave decline would suggest another five-wave decline ahead: 5-3-5 zigzag. We prefer to be a bit more optimistic longer term, and have been counting the bear market as an unfolding three-wave structure.
Since this is a Cyclical bear market the three waves should consist of three Primary waves ABC. Therefore Primary wave A should have concluded with three Major waves down at the recent SPX 667 low: Major A Mar 08, Major B May 08 and Major C Mar 09. Typically, after a completion of Primary wave A a 50% retracement rally occurs to create Primary wave B. Then Primary wave C declines into the eventual bear market low. The total decline at the recent low was from SPX 1576 to 667. Therefore we'd expect Primary wave B to retrace back to about SPX 1122. There is a long term OEW pivot at SPX 1107, and this is our target for Primary wave B.
MEDIUM TERM: uptrend
While the Eastern world markets were already in confirmed OEW uptrends, we awaited confirmation in the Western world markets. The wait ended this week when both Europe and the U.S. confirmed OEW uptrends. Now that the world markets have confirmed, that Primary wave B should be underway. It's a good time to anticipate how such a poweful rally (from SPX 667 to 1107) could unfold. First, the wave structure should also take the form of three Major waves, an ABC. Each Major wave is likely to subdivide into three Intermediate waves as well, or another abc. Since the entire Primary wave needs to travel 440 SPX points, then it would make sense that Major wave A travel at least half of that rise (220 points or to SPX 887) before Major wave B takes place.
Since there are OEW pivots at 848 and 912, it would appear that the 912 pivot would be the most likely target for Major wave A. If you recall SPX 944 was the high of the last uptrend in January. So SPX 900+ should certainly provide some resistance. Then after Major wave B retraces between 38.2% and 50.0% of Major A, then Major wave C should carry the SPX to the 1107 target. Since we are basing this 50% bear market retracement scenario on historical price action. There are no guarantees that the past will be reflected in the future. However, this is the most probable outcome at this moment in time.
SHORT TERM
Support for the SPX remains at 789 and 768, with resistance at 848 and then 912. Short term momentum was slightly overbought as the market closed on friday. The initial rally from the SPX 667 low was quite impulsive. At first we counted five waves up into the Mar 19th high of SPX 803. Then the market pulled back to 766, and again started to rally. However, after the SPX hit 823 on Mar 23rd it was quite choppy for the rest of the week, despite reaching 833. We have labeled the high at SPX 833 as the end of Intermediate wave A, and the subsequent pullback to 780 on Mar 30th as the end of Intermediate B. The market is now rising in Intermediate wave C of Major wave A. From the SPX 780 Intermediate wave B low, it looks like we rallied with wave 1 on tuesday to 810, and then a wave 2 to 784 on wednesday. The rally to new uptrend highs at SPX 846 on thursday should part of wave 3.
FOREIGN MARKETS
The Asian markets continue their uptrends gaining 2.1% on the week. China (+48%) continues to lead the way with India (+28%) a distant second.
The European markets confirmed uptrends this week gaining 3.9%. The more volatile DAX is +24% verses a 20% rise in the FTSE.
The Commodity equity markets are also in uptrends. Brazil leads with a 52% gain from its low, and Canada is +22%.
COMMODITIES
Bonds sold off 1.1% this week and their uptrend is now in jeopardy.
Crude gained 0.3% in its continuing uptrend, with a potential target of around $60.
Gold dropped 3.3% for the week as its downtrend continues. Still expecting $800 - $840.
The Euro gained 1.4% this week as its uptrend continues. The USD was -1.1% and the Yen -2.5% as they remain in downtrends.
NEXT WEEK
Economic reports this week are light. Tuesday we have Consumer credit, and then Wednesday Wholesale inventories. Thursday weekly Jobless claims, the Import price index and the Trade deficit. Then Friday the Budget deficit. As for the FED. On Monday FED governor Warsh gives a speech, and then the FOMC minutes will be released on Wednesday. Best to your week and upcoming holidays.
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
=============
The above are Tony Caldaro's public weekly update comments, not any recommendations for purchase or sale of any investments; and his site is always included in the "other sites of interest" at the right side of the page here. His comments parsing the Elliott Wave structure will be particularly interesting to EW analysts, but his trading commentaries and perspectives are of interest to everyone. Personally, I really appreciate his remarks about the 887 level - it fits with some of the main things I'm looking at also. Worth considering, whether or not you're into Elliott Wave (of either the "original" or the OEW variety).
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment