Andre Gratian had been stating in his weekend comments posted here, to set aside and not focus on the head-and-shoulders bearish view, and he was pointing to cycles and projections that could take the market higher. That point of view certainly bore fruit this week. So we should note that, and if you haven't already been reading up on his weekend comments here then you'll want to pay good attention to what he provides tomorrow. (He does also have a daily/intraday service with analysis and comments that he emails to subscribers. You can find his prior weekend reports using the "Turning Points by Andre Gratian" label here.) The big questions will be two-fold:
(1) did the pop up this week have staying power, or is it just a relic of the cycle from the Bradley model's turn window that may have run its course?
(2) if the market does turn down from here, will it be a simple pullback that leads to another rally leg higher?
Tony Caldaro has been maintaining an alternative count on his Dow Jones Industrial Average charts for weeks now, suggesting that the June highs were simply the first rally wave up, and that a pullback would ultimately point the markets back up again for the second part of the bear market rally. My understanding is that his primary count has not yet been invalidated - it would take the S&P 500 rising above the June highs to seal that deal - and he may be commenting on the primary vs. alternative counts in his updates at his OEW site, the Elliott Wave Lives On, as well (we carry his weekend updates (under the "Elliott Wave/Caldaro's OEW" label), and his daily and weekend updates appear through the feed at right and on his site in the links at right). The movements since the June highs have been a real whipsaw, unless you're basically daytrading ... but that doesn't mean that Elliott Wave isn't valuable - to the contrary, Tony's analysis continues to be very important in navigating this bear-market rally.
Terry Laundry has been talking for some weeks now about a new bullish "T" at his T Theory website (included in the links at right). As of last weekend, it was looking like a failure there, but then a few days ago he actually posted a mid-week update showing the breakout in his oscillator (very like the McClellan Oscillator breakout I posted a few days ago here as well). So if you check out his T Theory site, you'll see and hear (with his charts, and audio comments) what he's talking about.
Raymond Merriman commented some weeks ago that since the rally had already lasted to that point (if my memory is right, as of the Tuesday after the 5th week from the March lows), he predicted it would last much longer; although he didn't state an exact length of time or price for that prediction. I don't see that he gives more specific time/price forecasts in his public weekly comments, and his analysis to subscribers (incorporating cycles analysis of course) is reserved for those subscribers.
Andy Askey has made various posts at his PTV-Investing blog that suggested more bullish scenarios. I don't always have time to post his charts, but they obviously deserve attention, whether or not you understand everything about Gann analysis. You can always find his site in the list at right, too.
There are long some big-picture views, including one that goes along with Jeremy Grantham's long-term chart (which I posted and have commented on at my UBTNB3 site, see links at right), that go along with the idea of much higher levels. These can be consistent with either a 5th wave up, or a much higher "B" wave up, or even with Bob Prechter's suggestions of a large wave 2 up to much higher Fibonacci retrace levels (although there are problems with the ideas about what would happen after that - but, that's another story). These ideas even can go along with one concept that I've discussed with a couple of trading buddies, about the markets marching up into the year 2012, and thinking about R.N. Elliott's idea that the supercycle would be done by then - so maybe would suggest a final high into that year, as well. Frankly, I would have much preferred to see the SPX land on 600 (or a bit lower) to lay the foundation for that - but I don't know that I can absolutely rule it out either, especially since the market may indeed have tested some very long-term trendlines at the lows. (You can even see the xTrends' website big-picture charts showing those long-term trendlines in this area, as well as Jeremy Grantham's very long-term trendlines.) As I've mentioned - I'll pay more attention to these ideas, if the Dow Industrials better their January highs, preferably accompanied by the Dow Transports doing the same.
If you read Tim Wood's article at FinancialSense.com which I gave the link for last night (or wat it early this morning?!), then you know his views. I also keep Tim's Cycles News & Views website in the list at right, but his detailed analyses are reserved for subscribers too. In this public article yesterday, Tim discusses the idea that a bear market typically takes about 1/3 the length of the bull market that preceded it. Well, if you count a bull market as the March 2003 to October 2007 time frame, that's 55 months (nice Fib.-based number), and 1/3 of that time frame points to 18 months. So, okay, that suggests that a correction of that range can have bottomed in March. What if you count from the 2002 lows? If you take that as 60 months, then 1/3 points to 19.8 months, which gets us to May 2009 - I'm not sure how that helps, but maybe it suggests that there can be a secondary low to consider following the March lows, that's been dampening the bear-market rally until now ... perhaps. Candidly I am not a cycles expert! Just trying to wend my way through some of the conclusions. His real point is, we are correcting a much longer bull market, from 1974. Even if you think the bull market started in 1982, the bear market low is still a long way off (about 2015)! If you take the 1974 lows as Tim Wood does, then the bear market would be expected to complete around the year 2018.
Still, that obviously leaves some time for a bear market rally to extend further. As I said at the top of this post - I would absolutely love to spend a great deal more time analyzing and charting all this out. But I'm multi-tasking to my absolute limit, and actually beyond. So I'm going to have to be very, very focused about the analyses and posts that I'll be making. What that means for readers is - definitely make good use of the labels here for specific markets. For example, with gold, I've extensively analyzezd and charted out and commented on the likely direction of gold. The incremental comments I can make on it, outweigh the time of charting and posting out its short-term movements; so, I'll just be posting if and when I see something significant in gold. Same goes for bonds, oil, etc. And, that's also going to be the approach for equities.
Think of it this way - it's the idea of "quality time" versus "quantity of time" - I'll be more strategic in terms of what I focus on for charts analysis as we go. Not much difference for the swing trading focus, really.
Of course, that's just from me - and certainly, we benefit from a lot of very talented analysts here! No change there.
Speaking of drawing on others, let's take a look for what it's worth at the "Chart of the Day" from yesterday. Of course, we've got to remember that their work doesn't play out for trading recommendations - for that matter, their charts have been quite bearish-looking for a while, yet the markets continued edging up. So let's take this as we always should from this source - it's informational and interesting but not necessarily for trading recommendations! For example, looking at their chart today, one could think that instead of this suggesting the FXI marches higher from here, that perhaps it's due for a pullback. So, there's MUCH more to it than just looking at one chart.
So, here we go, their chart and comments for this week's view are below, for informational purposes only:
Chart of the Day
With much of the global economy under severe stress, today's chart focuses on one pocket of strength – China. In the midst of what is one of the most severe economic downturns of the past century, China's economy managed to grow by 7.9% for the year ending in Q2 2009. For some perspective, today's chart focuses on Chinese stocks and presents the current trend of the iShares FTSE/Xinhua China 25 Index (FXI). As today's chart illustrates, Chinese stocks have endured what amounts to an extremely wild ride since 2005. The FXI trended upward at an ever accelerating rate (i.e. parabolic) from 2005 to Q4 2007. As the credit bubble began to unravel, so too did Chinese stocks with the FXI trending downward at an ever accelerating rate from Q4 2007 to Q4 2008. However, Chinese stocks found their footing and have surged over 100% since their 2008 trough (8% GDP growth will do that for you) and are currently trading near the upper end of a nine-month trend channel.Chart of the Day provides this without warranty of any kind and accepts no responsibility for its accuracy or for any consequences of its use. Journalists and bloggers may post the above free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at http://www.chartoftheday.com/.
Looking at that, I get the impression that FXI may have broken above a downtrend line from its peak, and this can be consistent with the ideas of many that China may have bottomed a second wave and be due for a third wave up. I think that's an interesting view but have no opinion on that one way or the other. For myself, I would want to check on the Fibonacci retracement levels, and look at the technical indicators, before wading it; especially if and when FXI might want to test the lower channel trendline that Chart of the Day has placed onto that chart.
Sorry I don't have time to do that chart work myself, folks! But if you are trading FXI, those are the types of analysis you'll want to do.
It's very similar to the SPX in that sense - I've shown for a long time, that the SPX has a Fibonacci level at the 961/963 area, and if we see the SPX get there, we'll want to keep a real eye on it then. I know many are also talking about levels at or above 1000, and I've got interest in the 1050/1060 area if we see that as well ... but as always, first things first!
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