The clock is ticking on the U.S. debt situation and the crisis is escalating fast...
If you have been following the market since 2008, you know that all the stimulus plans, bank bailouts and the Federal Reserve's Quantitative Easing Programs (QE) haven't turned the economy around and the financial crisis is still with us.
The data released on Friday showed that the Consumer Confidence Report Fell to 63.7 in July from 71.5 in June... and the government's first estimate of second quarter GDP, advanced at a weaker-than-expected 1.3 percent rate. Growth in the fourth quarter of last year was 2.3 percent annual rate, not the 3.1 percent that our government wanted us to believe. The first quarter was also revised lower.
That doesn't sound like an economy that is humming along or recovering. Does it?
The final straw may be the ongoing soap opera bickering between Congress and President Obama. No wonder why investors are selling!
Should We Take This Recent Sell Signal Seriously...
or
... Is This A Wall Street Debt Ceiling Head Fake?
In this weeks edition of Heard on the Street, you'll learn about:
#1: The 2007-2011 Analogy: A Fractal Comparison
1. This one bearish chart could be the most important charts you look at all year.
2. Based upon my original published research on July 17 and current price action.... next week could bring a tidal wave of selling into the markets.
3. From my review of the S&P futures, this market could drop to 1166!
#2: A Review of Elliott Wave Counts:
1. I'll revisit all the counts and let you know which ones remain viable alternate counts and or why they have been eliminated. I'll even cover some counts that I'm certain readers are working that should be eliminated immediately.
2. I'll provide an outline for you to know where the battle will be won or lost, what the wave patterns will look like and the levels of demarcation where turning points may occur.
What if My Bearish Forecast is Wrong ?
Unfortunately, I can't tell which scenario will play out. As you know, trading is a game of probability. All I can do is provide you with the information to make an informed decision of how to trade this market. What I hope to convey to you in this video is that an enormous opportunity exists whether the outcome is bullish or bearish. Proper identification and knowing where to act will be the difference.
So please watch it today.
Best of Trading
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Hello Mike....I do appreciate your clear reasoned analysis. I understand your position on the various counts and key levels but I am unsure as to how a symmetrical triangle is a final (terminal) wave under your primary bearish count. My understanding of EW was that symmetrical triangles were always a precursor to final waves and therefore only occur at waves 4, B or X and only ending diagonal triangles could occur as terminal waves 5, C, Y or as in the present case Z? I would welcome any clarification you could provide. Thanks. Jim
ReplyDeleteJim - thanks for the comment. Symmetrical triangles are a precursor to final fifth waves, hence the bullish count in the video targeting 1398- 1402. I think I mentioned during last week’s video that EWI doesn't recognize this pattern i.e. because it slopes against the trend. EWI recognizes "a triple combination or triple three" but it is more of a sideways affair. Their analysts would most likely prefer to adopt the truncated w.5 interpretation to explain the pattern's termination.
ReplyDeleteYou'll find this pattern within Elliott's original work.
Another way to look at whether this pattern is relevant to explaining topping patterns is to look at it as a Head & Shoulders top. The investment community fully embraces this technical pattern and the ending triangle within the triple combination is Elliott's way of explaining the modern era pattern. Also note that the truncated w.5 interpretation is another way to describe the H&S pattern. W.3 red in that chart would be the right shoulder.
The bearish downside target of 1166 is derived from the same measurement standards of a H&S. Should the bearish view prevail; the Elliott pattern should produce similar targets.
Hope this helps. Hit me back if you have more questions.
Best of Trading
Very helpful video, Mike!
ReplyDeleteI favor bullish view, running flat and now (2).[5].III.
@Anonymous
Triple Combination with Triangle as last structure is complete right. You could read EWP book at Double Threes section.
Theoretically, triangle appears as wave 4,B,X as precursor to final waves, however you could find out it commonly as wave 2 in Gold Market.
Hello Mike
ReplyDeleteThanks for the detailed response. I was confused about the symmetrical triangle in your bearish count (wave Z)) but your explanation on triple combinations prompted me to go back to the EW bible and I found triangles as the final waves in combinations. I either forgot this fact or more likely never picked up on it before but thanks for the clarification.
Jim (Wolfhound on Twitter)
anytime and thanks for reading my work.
ReplyDelete